City Not Investing in the Biltmore’s Preservation. Taxpayers Take Another Hit.

Thanks to the article by Tania Aldemoro of the Miami Herald:

Seaway cited a May 12 letter from Daniel Wenk, deputy director for the U.S. Department of the Interior, which oversees the Biltmore because it is a national landmark. The federal government deeded the property to Coral Gables in 1973 to preserve it.

“Expenses related to the hotel’s repair, rehabilitation, restoration and recurring maintenance requirements should be paid before any excess income is realized,” the letter stated.

The Biltmore contends its rent is “excess income.”

The city disagrees.

Coral Gables City Attorney Elizabeth Hernandez wrote the National Park Service in June, saying the city “used the excess rental receipts from the Biltmore for public historic preservation, park or recreational purposes.”

The city spent $11.6 million in 2008 and $13.4 million in 2009 for those purposes, according to a June 2010 report from the city’s independent auditors, McGladrey & Pullen.

On Wednesday, Hernandez said she could not say how much of that money went to the hotel.

The future of the city of Coral Gables earning income from the Biltmore is in question.  It seems that the city should have used its share of the income to maintain the Hotel to high standards.  This means less money for the city’s own public historic preservation according the of City Attorney who states that is where the money went.

It doesn’t seem to make sense that the Federal Government would allow the city to use the hotel’s income to pay for its own “historic preservation, park or recreational purposes” that did not include first fixing the hotel; it should first do the upkeep of the Biltmore and if there is any money left over the Federal Government could care less where the money went.

The city has delayed rental payments owed by the Seaway Biltmore, Inc. until next year and at the same time the city will negotiate a new lease.  The new lease would easily be negotiated in favorable terms to tacitly include these delayed payments.

What we are seeing then is that the city is in fact forgiving millions of dollars in rent due under the formula (now being covered by the taxpayers), with a more favorable contract for the Biltmore later this year and a new formula that will de facto dispense with the old payments due by the hotel.

All of this suggests that neither the Biltmore Hotel management nor the city of Coral Gables believes much in the future of the Hotel.

About Stephen E. McGaughey
International consultant in economic development programs and projects

One Response to City Not Investing in the Biltmore’s Preservation. Taxpayers Take Another Hit.

  1. The Biltmore management does in fact believe in the future of the Hotel, but we recognize that after 18 years of continued operation (longer that any previous operator, including George Merrick) that preservation in perpetuity requires that the Federal Statutes are adhered to. In a letter to the City dated, May 12, 2010, the Department of the Interior has stated that “expenses relating to the property’s repair, rehabilitation, restoration, and recurring maintenance requirements should be paid before any excess income is realized” bringing into question our rent obligations.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: