Holiday Inn to fall for W Hotel
The Holiday Inn will be cleared aside to make way for a swank new W Hotel on Miami Beach's oceanfront, as the affordable goes pricey.
BY DOUGLAS HANKS III
dhanks@herald.com

Miami Beach's oceanfront Holiday Inn will be demolished to make way for a condominium complex and a W Hotel, according to sources familiar with the deal.

David Edelstein, a New York-based real estate investor with retail property on South Beach's Lincoln Road, has signed a contract to purchase the 355-room oceanfront hotel at 22nd Street and Collins Avenue and was in the process of closing the deal Thursday, the sources said. One source placed the purchase price at $77 million -- a sum analysts said could never be justified by merely renting hotel rooms on the site.

''That is not an economic basis for buying that hotel. You are buying land value there,'' said Gregory Rumpel, a hotel broker with Jones Lang LaSalle, who was not involved in the Holiday Inn deal.

All 400 rooms at the W would be sold as condominiums, a source said, but the unit prices could not be learned Thursday. The nearby Setai, another oceanfront hotel-condo hybrid, sells its rooms for between and $550,000 and $750,000, and the new W planned for Fort Lauderdale Beach is getting between $720,000 and $1.3 million for its rooms, executives with both projects said Thursday.

Edelstein declined through a spokeswoman to comment this week on the deal, as did Edelstein broker Francis Clougherty of Majestic Properties. Claire Callen, president of Oceanside Resorts, which owns the Holiday Inn, confirmed recently that the hotel is under contract to be sold, but she has not returned messages this week seeking comment.

Demolishing the Holiday Inn to make way for a swanky hotel-condo project would in many ways capture the evolution of Miami Beach as a tourist destination. Once a winter resting spot for snowbirds seeking beachfront bargains, it has emerged as an expensive and trendy resort city flush with luxury hotels, including a new Ritz-Carlton.

Smith Travel Research puts W in its top tier of hotel rankings, alongside the Four Seasons and the Loews.

''A W where the Holiday Inn is -- it speaks volumes,'' said William Talbert III, president of the Greater Miami Convention & Visitors Bureau, which promotes tourism in Miami-Dade County.

The W, a Starwood Hotels & Resorts brand launched in 1998 that seeks a trendy boutique-ish air in its nearly two dozen locations, has spent years hunting for a South Beach home.

It almost had one at 17th Street and Collins Avenue in a converted Ritz Plaza hotel, but those plans were abandoned when Ian Schrager's Delano hotel and another neighboring property sued over the shadow the planned W would have cast.

The sources said Edelstein has not hired an architect for the project, and that there will be a significant delay between the purchase and the demolition -- perhaps a year or two. It was unclear how long the Holiday Inn would continue to operate there; a spokeswoman could not be reached late Thursday.

Developers typically hire hotel chains to run the operation for a portion of revenues, but it was not known if W would join the project as an investor or if Edelstein has other partners. A Starwood spokeswoman did not respond to an inquiry about the deal this week.