Deal for land on Key Biscayne expected to be completed soon
By Suzy Valentine
A deal between operators of Sonesta Beach Resort and Fortune International to transfer ownership of the Key Biscayne property for conversion to a condo hotel is set to be completed within a week.
"We're supposed to close with Edgardo Defortuna on April 18," said Stephen Sonnabend, director of Sonesta International Hotels Corp. in Boston.
On announcing the deal Jan. 18, the group's board anticipated netting $650 million from sales of the units.
Fortune is to pay Sonesta $30 million in cash and discharge a mortgage of the same value as part of the transaction. A 50-50 partnership with the parties is to be created.
"We've still not received any plans," said Jud Kurlancheek, director of building, planning and zoning for the Village of Key Biscayne. "From what I hear, they're still searching for an architect."
Permitting will follow closing, said Peter Sonnabend, CEO and vice chairman of the hotel group. "Once we close," he said, "we'll start hiring the architect, instructing designers and developing concepts."
The hotel is to remain open until August 2006, he said, while permitting and planning is completed. If plans would affect the environment, permission would be required from state agencies.
Two years of construction are to follow.
"A lot of people will be sad to see the hotel go," said Mr. Sonnabend, "me included."
The intention had been to retain the existing 1969 structure and build condo-hotel units on an adjoining tennis courts.
"We decided against it," he said, "when we realized there wouldn't be unimpeded views. But this is a business opportunity. The property's star rating will improve."
Sonesta Beach Resort is recognized by AAA as a Four Diamond site.
Hard construction costs are estimated to be $250 million, of which $2 million to $3 million is to be spent on art for common areas.
"The focus will be on existing works from international artists and those associated with the South Florida market," said Mr. Sonnabend, "but there will be some commissioned pieces like the Catherine Porter ceramic fountain that's a centerpiece of the hotel."
The 10.5-acre site includes 700,000 to 900,000 square feet for construction, some of which Mr. Sonnabend said would be used for support space. Thirty to 50 permanent homes are planned for the site, and room sizes in the hotel are to double from about 330 square feet to 500 to 600 square feet.