|By Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
Jun. 5, 2008 - The company behind Jordache jeans has bought the shuttered South Beach hotel once slated for a redo by celebrity socialite Nicky Hilton.
The $25 million purchase of the Breakwater and Edison hotels in a bankruptcy auction has bolstered hopes of a new life for Ocean Drive's biggest eyesore. The pair of hotels on the 900 block of the popular street have been draped in a black construction shroud for about a year amid a failed condo-hotel conversion.
New owner Nakash Holdings, a subsidiary of Jordache Enterprises in New York, also owns the Hotel Ocean three blocks away and is planning a new hotel on South Beach's Espanola Way. The Daily Business Review first reported on Nakash's purchase, which was given final approval last month after a February auction.
"We're trying to take nice buildings and bring them back to their old glory," said Emzon Shung, the Jordache executive who oversees the company's real estate division.
Jordache Enterprises still makes jeans -- Heidi Klum has signed on for a new line -- but also invests in real estate and aviation ventures. It began buying commercial properties in South Beach about four years ago, Shung said.
The Breakwater and Edison once were the most celebrated hotel project in South Beach. In 2006 then-owner Robert Falor signed Hilton, younger sister to reality-TV star Paris, in a licensing deal that would have renamed the 95-room complex as Nicky O.
A flood of national publicity followed. But the deal fell apart a year later amid disputes with Falor and his lender, and slow sales for the condo-hotel units.
The Falor entity that purchased the buildings for about $17 million in 2004, filed for bankruptcy protection in early 2007. Court filings show that Falor's South Beach Hotel Investors owed lender Oaktree Capital about $60 million.
Barry Mukamal, the bankruptcy trustee brought on to sell the hotel, said about $15 million was spent renovating the hotel and that the stalled project left the Breakwater without a roof. "The aesthetic value of that building will increase because it went to a buyer with very deep pockets," Mukamal said.
Shung said the hotel probably will reopen as the Breakwater in two stages.
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