Hotel Online 
News for the Hospitality Executive

Nicky Hilton's Would-be Miami South Beach Condo-Hotel Set for Auction Block;
Lendors Are Seeking $60 million for the 95 room Complex

By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

Oct. 29, 2007 - The saga of Nicky Hilton's would-be South Beach hotel continues, with its bankrupt owners set to auction off the Ocean Drive property under court order.

After a failed condo conversion, the combined Breakwater and Edison property will be sold to the highest bidder under the supervision of a federal bankruptcy judge. Construction has stopped midway through completion of a rooftop penthouse, and a lawyer close to the case expects debts to far exceed what the hotel can command on the real estate market.

"It's such an awesome piece of property," said Michael Ehrenstein, a lawyer for co-owner Jonas Mimoun. "But it's been so thoroughly mismanaged."

The bankruptcy-court auction marks a dramatic turn of events for a property that only a year ago won favorable mentions by David Letterman and from writers in People and Vanity Fair magazines.

Hilton -- a 24-year-old socialite with a fashion accessories line and a famous older sister, Paris -- signed a licensing deal with developer Robert Falor to brand the two properties the Nicky O. She was promoted as the guiding force in designing the condo-hotel, and her tabloid cachet brought waves of publicity to the project.

But the partnership dissolved into litigation, just one in a string of disputes involving Falor's once formidable portfolio of condo-hotel projects. He ceded control at South Beach's Royal Palm hotel earlier this year amid a dispute with a partner there, and also faced litigation linked to conversions at Coconut Grove's Mayfair Hotel.

Construction stopped at the Breakwater and Edison this summer; Miami Beach declared the tarp-draped hotel at 940 Ocean Dr. abandoned on Sept. 17 and issued a stop-work order at the construction site.

Mimoun sued Falor in 2005, alleging violations of their partnership agreement, which gave Falor authority to run the hotel and supervise its conversion to a condo-hotel. The suit is still making its way through Miami-Dade Circuit Court.

Falor did not immediately return a phone message left on his cellphone Monday morning. Entities controlled by Falor and Mimoun filed for bankruptcy protection earlier this year.

Ehrenstein, a lawyer for Mimoun, said the $60 million in mortgage and penalty interest sought by lenders is more than the parties expect to get for the 95-room hotel complex.

Though an auction is set for Nov. 19, Jones Lang LaSalle Hotels has been hired to find a "stalking horse" buyer ahead of time to buy the property. Bidders then would have to beat that buyer's price.

Jones Lang LaSalle has not set a price for the hotel, but broker Christian Charre said interest has been high. Though construction crews have already done about $5 million in work converting the rooms into condominium units, Charre expects a buyer would probably opt just to operate the property as a traditional hotel.

"It's an A-location in South Beach," Charre said. "You can't replace that."


To see more of The Miami Herald or to subscribe to the newspaper, go to

Copyright (c) 2007, The Miami Herald

Distributed by McClatchy-Tribune Information Services. For reprints, email, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. NYSE:JLL,

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.