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Coral Gables, Florida City Attorney Indicates Plan for Resolution
on Biltmore Hotel Dispute in the Works

Arrears for Rent to City Currently Stands at $5.6 million

By Tania Valdemoro Longest, The Miami HeraldMcClatchy-Tribune Regional News

Aug. 26, 2011--Coral Gables City Attorney Craig Leen told commissioners that staff is working on a plan to resolve the ongoing rent dispute between the Biltmore Hotel and Coral Gables.

"We are in the process of making a recommendation now," Leen told commissioners at their meeting on Tuesday. "It is my understanding we will be coming to you soon."

Since April 2009, Seaway Corp., the company that operates the historic hotel since 1992, has not paid its rent to the city, which owns the property. Earlier this month, Leen said the arrears stand at $5.6 million.

Seaway officials say Coral Gables should have reinvested the rent into the preservation of the hotel in accordance with federal law. City officials disagree.

The company has spent millions of dollars to preserve and maintain the property.

Leen's announcement was a small nugget of new information that emerged from a discussion initiated by Commissioner Ralph Cabrera.

Cabrera said he raised the Biltmore issue -- which has not been discussed in substantial detail since last July, when commissioners approved an interim agreement and repayment plan with the hotel, which they later rescinded after Seaway got private financing -- because he hoped it would stimulate some thoughts on "taking this in a new direction."

"This problem continues to linger," Cabrera said. "It's been on my lap for 36 months."

Though Seaway stopped paying rent in April 2009, according to Cabrera, both parties started having disagreements in 2008 about golf management fees that Seaway owed to the city under a separate agreement.

"I look at two roads," Cabrera said. "One road where we are spinning our wheels gradually to nowhere. Another road where we are rapidly gaining traction on the road to the courthouse."

Commissioners have yet to vote on a course of action over the unpaid rent. They could approve or deny new terms to the hotel's 99-year lease, if a contract has been renegotiated. They could determine Seaway has defaulted on its lease and find a new hotel operator. They could decide to sue Seaway for breach of contract.

But until city officials present their plan, no one is saying what they will do.

Neither the city attorney nor City Manager Patrick Salerno offered many details about their ongoing negotiations with Seaway.

"At this point, over the summer, there have been several meetings with the Biltmore," Leen told commissioners. "Since they involve settlement discussions and strategy, I prefer not to discuss them."

Salerno said he, Leen and Biltmore officials are due to meet on Sept. 15 for another round of talks.

Afterwards, Leen expects to brief commissioners about the Biltmore.

Mayor Jim Cason told Cabrera he shared his frustration, but did not have the sense that negotiations between the city and Seaway were at a dead end.

"We need to wait a little longer," Cason said. "We are not going to wait forever."


(c)2011 The Miami Herald

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