Sep. 1, 2004 - The Roney Palace Hotel and Beach Resort, whose roots date back to 1925, shut down Tuesday, the last workday for nearly 200 employees, and days before its scheduled sale to the Chetrit Group.

Closed are the 585-room hotel, the Roney Pub, the hotel's sushi bar and poolside dining venues, and Breezes, a casual dining restaurant.

The New York developers' $150 million purchase of the Roney hotel and condominium property, which was approved by the U.S. Bankruptcy Court this summer, is expected to be completed by Sept. 10, said Brian Rich, an attorney for Berger Singerman which represents Roney Associates. Roney Associates, the partnership that owned the property, filed for Chapter 11 bankruptcy protection on Feb. 9.

"Roney Associates has made the decision to close down the hotel as of today," Rich said late Tuesday. Roney Associates said it does not know the intention of the buyers, who stipulated that the resort be closed before being handed over. The sale includes the hotel's furniture and fixtures, so the owners could reopen under new management "or pursue another course of action for the property," Rich said.

Roney Palace Oceanfront Condominium, the condo part of the property, remains open.

Nearly 200 resort employees, who were given 60 days notice on July 17, were laid off, but will be paid through Sept. 17, said Bill Mueller, chief executive of Roney Associates. Only a group of about 10 employees, including Mueller, will remain for the next several days or beyond.

No reservations for September had been taken during recent weeks, and any long-standing reservations have been accommodated elsewhere, Mueller said.

The Roney's history dates back to 1925, when the initial, landmark 17-story hotel with its Florentine bell tower and copper dome was built. During World War II, the hotel was used for housing and training Army officers.

Johnny Weismuller, the first movie Tarzan, worked as a cabana boy at the Roney. Florence Chadwick, who swam the English Channel, was once the hotel's aquatic director.

In 1968, the original Roney was demolished and replaced with a 1,162-apartment building. In 1980, the building was sold by Frankel Brothers Construction Co. of Philadelphia to Roney Associates. The consortium operated the Roney as a rental building until 1997, when the conversion began to condominiums.

The Roney property, which extends for an entire block between 23rd and 24th streets on Collins, had been split between the hotel and the condos. The property includes two grand ballrooms, two oceanfront swimming pools and a 10,000-square-foot health club.

At the time of its bankruptcy filing, the Roney was controlled by 11 corporate partners, with the majority interest held by two Canadian groups and three sets of Italian investors. The bankruptcy was forced by upcoming financing needs and a $3.8 million interest payment due in February.

A representative for the Chetrit Group, headed by Joseph Chetrit, and which has a stake in Chicago's Sears Tower, could not be reached for comment late Tuesday.

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