South Beach hotel closes after not paying months of bills

The Z Ocean Hotel in South Beach shut down on Wednesday after failing to pay its electricity bills to Florida Power & Light for most of this year, according to the city of Miami Beach.

The Miami Beach Fire Department arrived Wednesday morning at the condo-hotel to evacuate anyone who remained in the building.

“I can confirm the building has been closed and there are no occupants,” Melissa Berthier, director of marketing and communication for the city of Miami Beach, told the Miami Herald on Wednesday afternoon.

It wasn’t immediately clear if the shutdown was temporary or permanent.

The hotel, 1437 Collins Ave., was originally set to close on Sunday, according to an email sent by Jeremy Bloomfield, fire prevention captain for Miami Beach, to hotel representatives. But the shutdown was delayed several times. First, the date was pushed back to Tuesday, Sept. 9.

“Please make sure that all of your guests have made arrangements to check out by [Sept. 9] as they will be knocking on all the doors,” according to one internal email from a hotel worker.

Then that was delayed another day, giving the hotel 24 more hours to pay its debt.

“We have been told FPL has notified the property that power would be discontinued by tomorrow,” Berthier, the city of Miami Beach spokesperson, told the Miami Herald on Tuesday.

“The city of Miami Beach received notification from FPL that the Z Ocean Hotel has not paid their electric bill for the past six months,” Berthier, said earlier this week. If the power is turned off, Miami Beach Fire “will ensure the building is safely evacuated,” she said.

Financial and legal difficulties have hit the hotel in recent months, including several foreclosure lawsuits. The property also has been affected by recent changes to Florida condominium laws and the following disputes over how they should be applied to mixed-use properties.

The Z Ocean Hotel, a 80-room condo-hotel, was originally set up as a mixed-use building with vertical subdivisions. That means the property was divided into separate sections with different owners: a commercial ground floor, a garage and four floor of condo units, said Mark Grant, a real estate lawyer with Greenspoon Marder LLP in Fort Lauderdale.

One master board was created to administer the building with power over the condo board, said Grant, who formerly worked for the hotel and created the legal structure. That included collecting assessments and fees and paying for shared areas. And from 2006 on, it did that.

But in recent years, the condo board got new leadership and has asserted more power. And it stopped sending the master board payments and assessments, the hotel owners and Grant allege, including power, water and insurance. And it hasn’t had elections in about six years, he says.

Stevan Pardo, the attorney for the condo board, didn’t respond Tuesday to the Miami Herald’s request for comment.

The condo board was also buoyed by the 2020 Icon Brickell court ruling that gave condo owners and condo boards more power. But that property is distinct from Z Ocean in how it’s set up, Grant said.

Meanwhile, Z Ocean owners lack the rights to place liens or foreclose individual units for lack of payment.

“The building is going to be shut down,” said Grant, because a court decided that “the master association does not have the right to collect directly from the unit owners in the condominium parcel, and that the condominium association is the one who is responsible to maintaining the ‘shared facilities’ with the building.”

This story was originally published September 9, 2025 at 5:29 PM.