|By Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
December 11, 2008 - --A hostile credit market killed a planned Ritz-Carlton timeshare and condominium resort slated for Miami Beach, developers said Wednesday.
"There's no debt for development," said Diego Lowenstein, a partner in the deal that would have transformed the old Seville hotel into a luxury resort. "Lenders across the board are not doing anything."
Announced at the peak of the housing boom, the Ritz-Carlton Club and Residences offered luxury timeshare units (known as fractionals) and traditional condominiums selling for $900,000 and up.
It would have been the fifth Ritz-Carlton property in South Florida, but as a residential resort, the only one not to accommodate transient guests.
The news comes a day after the chief financial officer of Marriott, which owns Ritz-Carlton, said the company was scaling back timeshare developments around the world to meet contracting demand for the product.
Lowenstein, CEO of Lionstone Development, which owns South Beach's Ritz-Carlton hotel, said sales were strong enough to support the project. But he and partner Fortune International couldn't find a lender willing to back the $200 million construction tab.
"We came to market in a very difficult time," he said. Fortune issued a statement Wednesday confirming the project was canceled, a decision Lowenstein said was reached in the last several weeks.
The sudden demise of the Ritz-Carlton Club reflects the dire landscape facing developers.
Island Gardens, a planned $640 million hotel and retail complex on Miami's Watson Island that includes fractional units, has delayed the launch of construction while it seeks financing.
Scott Berman, head of PricewaterhouseCooper's lodging division, said few developers can get the cash they need to build, writing in an e-mail that "99 percent of all new development in the leisure sector is in paralysis due to a lack of access to capital."
In May 2005, an entity backed by Fortune and Lionstone paid $25 million for former site of the Seville hotel, five-acres of oceanfront land at 29th street and Collins Avenue. As they unravel plans for the Ritz-Carlton Club, the partners will be pursuing a new hotel there, Lowenstein said.
"The numbers work for a hotel," he said. "It's the last remaining large property in South Beach."
Lowenstein said there are no lenders willing to back a hotel venture on the property, either. He's counting on the credit crisis easing in the first half of 2009 to allow for the development process to begin again.
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