Condo-Hotel Converter Sued by Real Estate Broker
By Douglas Hanks III, The Miami Herald
Knight Ridder/Tribune Business News
MIAMI, FL, December 7, 2005. Prolific condo-hotel converter Robert Falor borrowed $500,000 from his real estate broker to close his most celebrated deal, the purchase of South Beach's Royal Palm Crowne Plaza, according to a recent lawsuit.
Commercial broker Dianna Cheng claims Falor and a partner still owe her $300,000 from the six-week loan she made last February out of her $600,000 real estate commission from the $128 million purchase. In court papers, Falor counters Cheng reneged on a pledge to bring Hard Rock Hotels to the Royal Palm, and that he withheld part of her fee because of the broken promise.
The litigation reveals the latest dispute between Falor and his partners in South Florida hotel ventures. If true, Cheng's allegations would suggest a cash-flow crunch for a developer who made a big splash in the condo-hotel market with a string of high-profile acquisitions.
Her suit in Miami-Dade County civil court includes a copy of the loan document, and it does not mention a requirement that Cheng deliver Hard Rock to the Falors.
But it said Falor and partner Geoffrey Hockman needed Cheng to swap the $500,000 loan for her commission in order to complete the Royal Palm purchase.
That sale was delayed several times, which lawyers for then-owner R. Donahue Peebles blamed on the Falor team's difficulty in finalizing a purchase loan. Then, in a surprise, Peebles announced he would keep a small ownership stake in the hotel once Falor's team purchased it.
Cheng declined to comment on the lawsuit. Her lawyer, Harris Buchbinder of Miami's Buchbinder & Elegant, called the Falor side's version of events "pure bull." In a telephone interview Tuesday, Falor said his team paid Cheng "what we thought was appropriate."
When his partners had the Royal Palm under contract, Falor said he hoped to sign Hard Rock to run the hotel. But Sol Melia ended up running the 417-room oceanfront resort.
Falor has earned a reputation as the most aggressive of South Florida's condo-hotel converters by acquiring small stakes in properties alongside larger equity investors. Since 2003 his family's Chicago-based company, the Falor Cos., helped acquire Cheeca Lodge in Islamorada, Coconut Grove's Mayfair Hotel, South Beach's Breakwater and Edison, as well as the Royal Palm.
In May, the Falor-controlled holding companies that own the Breakwater and Edison filed for bankruptcy protection in the midst of foreclosure proceedings, and Falor was sued by his partner in the venture for $1 million in sales proceeds.
The companies emerged from Chapter 11 in June and refinanced the loans on the hotels.
---|--
To see more of The Miami Herald -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.herald.com.
Copyright (c) 2005, The Miami Herald
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
