The Miami Herald
March 26, 2008
New Hotel Has Posh Trappings, Top-tier Rates
The Gansevoort wants South Beach chic to jump north a few blocks and crown its neighborhood the new hot spot.
By Douglas Hanks
As it readies for its first weekend, the new Gansevoort hotel hopes to stretch South Beach's cachet (and premium room rates) even farther north.
Once known as the Roney Palace, the revamped hotel on the 23rd block of Collins Avenue sees itself as part of a new epicenter in South Beach a few blocks north of current trend setters the Raleigh, the Shore Club and the Delano.
"I think the better end of the beach is now going to be from 20th and up," said Michael Achenbaum, an owner of the 334-room Gansevoort South.
Next to the Collins site, cranes are adding floors to a future W hotel. And two blocks down stands the Setai, a hotel opened in 2005 with a pledge to charge the highest rates in South Beach.
Achenbaum's vision of a new pecking order on South Beach (generally considered to stop at 21st Street, a city spokeswoman said) has limits: "The Delano is still the Delano," he acknowledged. But it reflects the huge bet the Gansevoort means for Achenbaum and his father, William.
They bought the block-long condo and hotel complex at the height of South Florida's real estate boom, only to see their plans roiled by the unraveling of the condo market.
Only about 75 of the 259 residential condos in the complex are sold, and plans to sell off 102 rooms as condo-hotel units were scrapped as the real estate market deteriorated, a spokeswoman said.
That left the Achenbaums, owners of the original Gansevoort in New York, without the millions of dollars in upfront cash they had originally expected.
He thinks sales will get a boost once would-be buyers see the hotel operating and that condo-hotel units will be up for sale again.
"You can't sell the dream in Miami right now," Achenbaum said. "You have to sell the reality."
Reality at the Gansevoort has been hectic. Spackle still covers the ceilings of the hotel's penthouse floor, and Achenbaum said the hotel only received its occupancy permit this week. Most major amenities won't be done until this summer or fall.
Guests this weekend can order room service, but the hotel's main restaurant, the STK steakhouse, doesn't expect to open until the fall, though a haute-Chinese restaurant opens this spring.
The David Barton Gym and Spa, formerly of the Delano, won't be ready before summer. At an open house this week, the playful lobby's 50-foot shark tank was sharkless.
The Gansevoort is counting on its oceanfront location and posh trappings to justify its top-tier rates: A front desk clerk quoted an $870 rate for Friday, along with a two-night minimum stay requirement.
The Roney was known for spacious rooms, and the renovation produced 55 one-bedroom suites. One pool faces the Atlantic, and its edgeless eastern side seems to blend into the blue ocean water. Another pool, on the rooftop, is 110-feet long and forms the centerpiece of an outdoor party spot 18 stories high.
"They've got some good wow factors," said Mark Lunt, a hospitality analyst at Ernst & Young in Miami. "Is this [neighborhood] going to be the new South Beach? Well, probably not."
The Gansevoort's posh setting only offers one more luxurious option in South Beach, where competition for wealthy travelers has heated up in recent years.
This is the Achenbaums' second try for a South Beach hotel. In 2004, William Achenbaum bought the $54 million mortgage on the Royal Palm and tried to foreclose on it. That bid failed, and the Royal Palm's owner, R. Donahue Peebles, accused Achenbaum of defamation in a suit that Peebles said ended with Achenbaum and the bank paying him a settlement.
When the Chetrit Group paid $150 million to buy the Roney complex out of bankruptcy, the Achenbaums emerged as partners in an effort to turn the mid-market hotel into a Gansevoort.
Chetrit and the Achenbaums planned to open a Gansevoort in Los Angeles too, but then parted ways on both projects, Michael Achenbaum said. He said he and his father and their partner, Arik Kislin, are now the Gansevoort South's sole owners.
Without a national brand (or the extensive sales operation a Starwood or Hyatt brings) the Gansevoort must rely on its sister property's reputation and its ability to lure guests away from established properties like the Ritz-Carlton or the Delano.
And with recession worries running high, some industry watchers predict a shrinking pie of wealthy South Beach vacationers.
"That makes me wonder how all these high-end places are going to do," said David Kelsey, president of the South Beach Hotel and Restaurant Association.