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Ritz-Carlton Fort Lauderdale sold after years of litigation

The Ritz-Carlton Fort Lauderdale is a showpiece of a hotel, resplendent with ocean front views, an 8,500-square-foot spa, and four restaurants. Guests can enjoy lounging in private cabanas by the pool enjoying the warm Florida sun under the gentle sway of palm trees. In fact, the six-year old luxury hotel, which spent years mired in commercial litigation, was just purchased for nearly $66 million dollars by a company called RCFL Investor LLC. The transaction represents South Florida’s most expensive hotel purchase in the last four months.  

The sale of the hotel is certainly happy news for the developer of the property, Castillo Grand LLC of Clearwater. Castillo purchased the development site in 2000, and it teamed with St. Regis to build the hotel. However, the parties soon became locked in arguments over construction plans, the design of the hotel, and the turnover of St. Regis management. The project could not be completed on time, leading to unexpected costs. 

Eventually, St. Regis’ parent company, Starwood Hotels & Resorts Worldwide, Inc., ended its management contract with Castillo. In 2009, Starwood’s affiliate filed a breach of contract lawsuit against Castillo. Castillo successfully defended the lawsuit, and it emerged the victor, winning a $44 million dollar judgment.

Real estate transactions are not always for the faint of heart; there can certainly be many starts, stops, and glitches along the way. One of the best ways to protect against unexpected surprises is to work with attorneys. Experienced legal counsel can draft and review comprehensive business and construction management contracts in hopes of preventing as many problems as possible. 

Source: Daily Business Review, “Ritz-Carlton Fort Lauderdale Sells For Nearly $66 Million,” Eric Kalis, July 23, 2013

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