|By Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
May 15, 2009--Donald Trump may not be coming to Fort Lauderdale, after all.
After seeing one hotel project in the resort city fizzle amid a depressed real-estate market, the celebrity mogul has informed developers of another that they can't use his name on their 298-unit property.
Trump claimed the developers of the Trump International Hotel and Tower were in default of a licensing agreement that allowed use of Trump's name on the project, according to a letter the developers sent to buyers this week.
That licensing deal boosted sales at the 24-story tower, where units sold for $600,000 and up. The Trump brand was seen as injecting luxury into a hotel market long known for spring breakers and budget rates.
And while developers plan to fight to keep Trump's name on the front of the building, the conflict adds to the legal fights facing condo-hotels across South Florida as buyers try to escape sales contracts written during the recent real-estate boom.
"It was difficult before this financial crisis to get financing for a condo-hotel. Now it's virtually impossible," said Robert Cooper, a Miami lawyer who represents about 50 condo-hotel buyers in various projects throughout South Florida. "Unless they have cash to close, there's no way they can close on these condo units."
Thirty buyers of Trump International units at 551 N. Fort Lauderdale Beach Blvd. are suing the developers and Trump for allegedly misleading them into thinking the TV star's participation was a sure thing. Though sales contracts identify the project as the SB Fort Lauderdale Hotel & Condominium and state that Trump can withdraw from the licensing deal, the suit claims that marketing materials suggested Trump was on board as a developer.
"Everybody thought they were buying into Trump Tower," said Joseph Altschul, the Fort Lauderdale lawyer who filed the suit in Broward County Circuit Court.
The suit claims plaintiffs "paid a premium for a condominium unit with the Trump name purportedly attached to it," reads the suit filed in Broward County Circuit Court. The project's website described it Thursday as "a signature development by Donald J. Trump."
SB Hotel Associates, the New York company behind the project, and lead developer Roy Stillman did not respond to requests for comment. A spokeswoman for Trump, whose casino company filed for bankruptcy protection in February, issued a statement saying his organization wasn't the developer of the property, adding "for all other inquiries, please contact the owner."
As recently as two years ago, Trump symbolized the transition under way in Fort Lauderdale's hotel industry. The prolific real-estate salesman sold his name to a pair of luxury condo-hotel projects set to rise two miles away from each other on the beach.
In 2007, when developers suspended plans for the Trump Las Olas Beach Resort at 525 S. Fort Lauderdale Beach Blvd, Trump expressed confidence that his other Fort Lauderdale venture would prosper despite the slump.
But this week, SB Hotel Associates sent out a letter hinting at troubles ahead.
The May 13 letter said given the "uncharted economic climate," developers did not expect the hotel to open if fewer than 50 percent of buyers close on their units. But if the hotel doesn't open, the letter said, owners could not occupy their units, given local zoning rules for condo-hotels.
Altschul said buyers hadn't heard from the developers for about a year, before receiving letters announcing closings would be taking place at the end of May. He said that while the units seem mostly finished, the public areas of the hotel need work.
"There's a shell where the restaurant and spa are supposed to be," he said.
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