The developers of Margaritaville Hollywood Beach Resort will not be able to meet their April 10 deadline to begin construction on the long-awaited 350-room hotel and restaurant complex, according Hollywood City Manager Cathy Swanson-Rivenbark.
But Swanson-Rivenbark said Monday that the developers were able to show that they were “making significant progress,” and will be asking for one more extension from the commission.
“We have been very clear about the deadline, but they have shown us how close they are to making this project happen,” she said, adding they purposely called the meeting before the deadline. “So we have told them they have to bring their case to the commission and it will be up to the commission to decide.”
On Wednesday, the developers – a joint venture between Maragaritaville and The Lojeta Group - will ask the Hollywood Commission, who will also be acting as the Community Redevelopment Agency Board, for an additional 60 days to complete a funding plan and take possession of the property from the city.
After Lon Tabatchnick, the president of The Lojeta Group, presented a new funding plan for the $130 million project in September, the city drew a “line in the sand,” giving the developers until April 10 to take possession of the land and begin building.
That was not the first time the project had hit a snag.
In April 2012 the city gave the developer more time, because he was having trouble securing funding. Originally, the developers planned on using
EB-5 funding – which allowed foreign investors to get U.S. residency in exchange for putting in $500,000.
But getting the funding proved difficult.
So the commission in September agreed to some changes and set the time clock.
At the time the commission agreed to invest $23 million in the project, rather than the $10 million originally agreed upon from the CRA. The increased investment meant more money for the city over time, commissioners said.
Instead of receiving $500,000 rent payments, the developer would pay $1 million rent to the city for the first year and then it would increase by 3 percent annually.
Tabatchnick said in September that he had a letter of intent from Starwood Capital – that once financed high-end hotels including St. Regis, W, Westin and Sheratons globally – to invest in the project. Tabatchnick did not return calls Monday night.
Starwood Capital would then become a partner in Margaritaville Hollywood Beach Resort LLC.
She said it is taking the developers longer than expected to fill out all of the paperwork, but once the joint venture between Margaritaville Hollywood Beach Resort and Starwood Capital is signed “everything should fall into place quickly.”
“Starwood’s interest in the project has made for a much better project,” she said.
Mayor Peter Bober said Monday he didn’t “love” the idea that they were coming back, but he was willing to listen.
“I think it’s important to not be impulsive and to have some knee jerk reaction and throw out years of work because they need more time,” he said. “It’s a balancing act between protecting the city’s businesss interest and giving them a small amount of extra time.”
Commissioner Patricia Asseff also said she wanted to give the developers a chance to present their case.
“I am not going to throw the baby out with the bath water at this point,” she said. “I want to hear all the facts so I can make an evaluation.”
The Joint Special City Commission/CRA Board meeting will be at 5 p.m. Wednesday at Hollywood City Hall, 2600 Hollywood Blvd.