Miami Boutique Hotel, GMAC At Odds Over Foreclosure

MIAMI BEACH— The Hotel Impala in South Beach is facing the first foreclosure to hit the Miami Beach resort industry since Sept. 11, adding to worries over a possible shakeout of the citys roster of boutique hotels, reported The Miami Herald. The 17-room Impala hasnt made a loan payment since before the Sept. 11 attacks, which prompted 80% of its October guests to cancel their reservations. In December, owner Angela Randall secured a $396,000 emergency federal loan for businesses hurt by Sept. 11, but mortgage-holder GMAC wouldnt accept the money, saying it doubted the Impala could survive. “Market conditions in Miami Beach do not bode well for small hotels, off the beach, with few amenities,” GMAC executive John Maute wrote in a May 7 letter on the matter. Revenue is off almost 20% this year for the Miami areas larger boutique hotels, compared with a 16% drop for the rest of the industry here, according to Smith Travel Research. Fortunes were reversed two years ago, reported the Herald: in 2000, the boutiques here saw revenues rise 7%, while the rest of the industry saw a 5% increase. GMAC said Randall never got approval for adding more debt to the hotel by accepting a small business association (SBA) loan, and said the extra mortgage— the third on the property— could hurt dividends flowing from the larger pool of loans GMAC is charged with protecting. GMAC filed suit in January to foreclose. The hotel has taken its case to local members of Congress, who have written letters on the Impalas behalf. U.S. Rep. Carrie Meek, D-Miami, has asked the SBA to investigate the matter. SOURCE: The Miami Herald