The Biltmore Hotel: Too Big To Fail?
July 21, 2010 Leave a comment
I refer to the excellent note by Richard Namon on the the Biltmore Hotel matter and its financial connections, or lack thereof, to the budget of the City of Coral Gables. The position of the City of Coral Gables vis-a-vis the the Biltmore Hotel (Seaway Biltmore, Inc.) appears to be a case of “Too Big to Fail”. Our city authorities, City Manager and Commissioners alike, all seem to have a deep fear that the hotel will fail and drag down the whole city or darken the city’s image.
The Namon Report is sufficiently complex that it is worth re-reading but he raises several serious issues about the City’s oversight of the Biltmore Hotel management company that should be answered by the City.
- Did Seaway Biltmore use federal grant funds in lieu of insurance payments to repair the hotel, and did it actually perform the total repairs of about $2.0 million (federal grant monies) plus $8.2 million (insurance payments)? Did the City know how the funds were used or should the City have shared in the unused funds, or not? Why didn’t the City supervise (sign off) on the repairs?
- Did the City overlook, or write off, a deferred rent payment of $500,000 with no real evidence of promised infrastructure investments or even double counting the repair monies, federal grant and the rent credit?
- Why doesn’t the City have records on the various transactions, agreements and repairs at the hotel?
It would be a great time for the city authorities to clarify these questions now that we are in a budget cycle in which taxpayers will have to pick up the Biltmore’s rent due the City this year and in the coming years.