|By Doreen Hemlock, Sun Sentinel, Fort
Lauderdale, Fla.McClatchy-Tribune Regional News
May 14, 2009--The much-touted and long-delayed Trump International Hotel & Tower on Fort Lauderdale beach might not open.
Developers of the 298-unit condo-hotel informed investors in a May 13 letter that they must close on their units this month and unless half do, "we do not envision that the hotel will open."
Furthermore, the letter said buyers likely can't occupy their units until the hotel opens, and a Trump group may pull its celebrity name from the property, claiming developers have defaulted on their obligations.
Neither the developer, SB Hotel Associates LLC, nor the Trump Organization in New York could be reached to comment Thursday despite repeated messages.
The woes are the latest in a series for a $200 million venture that was supposed to bring cachet to Broward County and open in 2007. The 24-story project features some of the area's most expensive condos, with studios and one- and two-bedroom units priced from about $500,000 to more than $3 million each.
Several lawsuits are pending from unhappy investors who want refunds of their 20 percent deposits. Allegations include misleading advertising and breach of contract for failing to finish the project on time -- no later than December 2008.
Fort Lauderdale attorney Joseph E. Altschul, who represents investors in more than two dozen units, said investors have little incentive to close on units this month when developers can't assure them that the hotel will open or that the Trump label will remain.
"Talk about a risk," Altschul said. "They're asking people to say, "Here's the other 80 percent of my money, and maybe I can move in someday."
Jared Beck, a Miami lawyer representing other investors in the property, also questioned why buyers would close on their units when the project faces serious financial woes.
Developers pre-sold most units in 2005 and 2006 when condo values were far higher. And the lender for the venture, Chicago-based Corus Bank, is teetering, ordered by federal authorities to raise $390 million by July or face receivership.
"The implications for this project could be devastating if Corus goes under," Beck said, urging developers to refund deposits to investors.
The condo-hotel at 551 N. Fort Lauderdale Beach Blvd., just north of Las Olas Blvd., is one of several Trump-brand projects in South Florida. The real estate mogul also has invested or licensed his name to unrelated properties in Hollywood and Sunny Isles Beach.
A Trump condo-hotel project recently collapsed in Mexico, just south of California, with investors losing their deposits.
Doreen Hemlock can be reached at dhemlock@SunSentinel.com or 305-810-5009.
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