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Three of Five Bids Rejected to Build Convention Center Hotel in West Palm Beach, Florida;
Financial Information of the Entity Guaranteeing the Project Not Passing Muster

By Alexandra Clough, The Palm Beach Post, Fla.McClatchy-Tribune Regional News

September 9, 2009 - --WEST PALM BEACH -- Only two of five groups vying to build the Palm Beach County Convention Center hotel submitted paperwork that passed muster with county staff. One group includes the Related Cos. of New York, and the other group is Acquest Realty Advisors of Michigan.

Left out are three teams, including a powerful local contender: A group consisting of real estate developer Llywd Ecclestone Jr., FRI Investors of West Palm Beach and Westin Hotels.

The selection will be halted so the rejected teams can file a protest by Sept. 18.

Michael McCloskey a principal with FRI Investors, said the county cut his team based on "a minor technicality, but it's major because it's kicking us out." In doing so, "they handed the deal to Related," said McCloskey.

"It's ridiculous," added Neil Schiller, a Fort Lauderdale attorney representing Rose Development, owner of the Airport Hilton in West Palm Beach. Rose's team included Hyatt Hotels. "When you have five major teams coming into Palm Beach County to do business, and you don't even let some of them in the game, it sets a bad public policy," Schiller said.

The long-awaited hotel is key to the success of the convention center on Okeechobee Boulevard in West Palm Beach. The last attempt to built a hotel resulted in a scandal.

Shannon LaRocque-Bass, assistant county administrator, said a Request for Qualifications from developers required financial information of the entity guaranteeing the project.

Some groups filed paperwork under an entity created for the project, a common move. But the county is rejecting filings by single-purpose entities because they are shell companies with no assets. Everyone had a chance to refile, LaRocque-Bass said.

Related, for instance, provided detailed financial information about its company, LaRocque-Bass said.

Ken Himmel, Related managing partner, was "very pleased" that his team's response was recognized, said company spokeswoman Carey O'Donnell.

But other teams were not recognized. McCloskey and Ecclestone kept the special purpose entity but provided financial information about themselves. This should have sufficed, McCloskey said.

An official with Grove Street Partners, another rejected hotel contender, agreed. "This is not the way business is done," said James Stormont of Grove Street, which teamed with Marriott/Renaissance Hotels.

Grove Street and Rose are considering filing protests. But McCloskey said FRI will not: "If you don't get invited to the party, you don't crash it," he said.


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