Miami Beach Files Suit Against Deauville Beach Resort

Susan Askew
Susan Askew

Miami Beach Files Suit Against Deauville Beach Resort:

Historic structure has been closed since electrical fire in July 2017

The City of Miami Beach has filed suit against the owners of the Deauville Beach Resort and Ocean Bank seeking an injunction to avoid demolition by neglect, collection of $91,000 in unpaid taxes, and for the appointment of a receiver to oversee the necessary repairs.
 
The Deauville Beach Resort, located at 6701 Collins Avenue in the North Beach Resort Local Historic District, has been closed since a fire in July 2017. It sustained further damage from Hurricane Irma that September. The property has been the topic of much concern at the City’s Historic Preservation Board and Commission meetings and among local businesses who say they are suffering as a result of the hotel’s closure.

After multiple attempts to force the owners to make repairs, the City filed its suit in the Eleventh Circuit Court of Miami-Dade County against Deauville Associates, LLC (Deauville) and mortgage holder Ocean Bank.
 
The 538-room ocean front hotel was designed by architect Melvin Grossman and constructed in 1957. 
 
Citing its iconic MiMo architectural style, the suit says, “The Deauville Beach Resort was a favored venue for many notable entertainers of the 1950s and 1960s, including Frank Sinatra, Sammy Davis, Jr., Dean Martin, Joey Bishop, Tony Bennett, Bing Crosby, Judy Garland, Sophie Tucker, Henny Youngman, Milton Berle and Jerry Lewis.”
 
“Notably, the Deauville Beach Resort is iconic for hosting one of the most significant events in the history of popular music: The Beatles’ performance on The Ed Sullivan Show on February 16, 1964.”
 
The suit claims the owners have allowed the property to fall into disrepair and have “no intention of voluntarily undertaking the repairs necessary to bring the Property into compliance with the City Code and the City’s Historic Preservation Board, and Deauville is hedging its bets that the City will eventually allow the demolition of the structure.”
 
The timeline outlined in the court filing states the building was rendered uninhabitable following the July 2017 electrical fire. Two months later, the property sustained wind and water damage from Irma “which damages were later amplified by certain illegal work performed on the Property without a permit.”
 
“Since the Property’s closing in July 2017, the Deauville has not undertaken any substantial remedial measures at the Property, causing the Property to deteriorate which is jeopardizing the structural integrity of the historic ‘Contributing’ structure,” the filing states.
 
The City issued an unsafe structure violation on July 25, 2017 which gave the owners 15 days to obtain an engineering report regarding the cause of the fire, the extent of the damage, and necessary repairs. The violation notice also required Deauville Associates to obtain the necessary approvals for reconnecting power to the building. The lack of power is one factor that has been noted for the inability to mitigate the water damage and subsequent mold caused by the hurricane that occurred two months after the fire.
 
According to the suit, “Deauville failed to timely comply” with the violation notice.
 
City Code requires buildings located within local historic districts be properly maintained according to minimum standards as defined in the code. Demolition by neglect is defined by any failure to comply with those minimum standards “whether deliberately or inadvertently,” the filing says.
 
The City says Planning Director Tom Mooney and Building Official Ana Salguero inspected the property on October 8 and confirmed the property does not meet the required minimum maintenance standards in the Code citing: “Deteriorated or decayed facades or façade elements, including but not limited to, facades which may structurally fail and collapse entirely or partially; deteriorated or inadequate foundations; deteriorated or ineffective waterproofing of exterior walls, roofs, foundations or floors, including broken or missing windows or doors; defective or insufficient weather protection which jeopardizes the integrity of exterior or interior walls, roofs or foundation, including lack of paint or weathering due to lack of paint or other protective covering; any structure which is not properly secured and is accessible to the general public; any fault or defect in the property that renders it structurally unsafe or not properly watertight; the spalling of the concrete of any portion of the interior or exterior of the building.”
 
According to the filing, the City notified the owners on October 11, 2018 of its intent to take action to avoid demolition by neglect “unless the Deauville undertook meaningful action to place the Property in compliance with the established maintenance standard…”
 
“To date, Deauville has failed to perform any substantial work at the Property,” the City says.
 
In addition, according to the filing, the Deauville’s contractor “placed the City on notice of his intent to withdraw as the Contractor of Record.”
 
“Deauville’s continuing failures to perform the required repair and remediation work to the Property is resulting in the ongoing deterioration of the structure, which unless resolved, will deteriorate beyond repair requiring the demolition of the historic Property,” the suit states.
 
In December, the Miami-Dade County Unsafe Structures Board ruled in favor of the City and entered the following ruling according to the City's filing:
  1. The structure(s) are to be maintained secure, clean and sanitary, free of debris, overgrown grass or weeds and free of discoloration or graffiti.
  2. A temporary electrical power permit must be applied for within thirty (30) days of the date of the ruling. The temporary electrical permit shall be obtained within sixty (60) days from the date of the ruling. The building permit(s) to repair windows and for concrete spalding must be applied for within sixty (60) days after obtaining the temporary electrical permit, with the understanding that no work can be performed until the temporary power permit is issued.
  3. A 40-Year Recertification Report shall be submitted within one hundred twenty (120) days from obtaining the temporary electrical permit to the City of Miami Beach Building Official as required… and to obtain all necessary permits to repair and restore said structure.
 
“The Deauville has not applied for temporary power within thirty (30) days of the Unsafe Structures Case ruling, and the Deauville has not undertaken any meaningful steps necessary to comply with any other ruling from the Unsafe Structures Board Order,” the filing states.
 
On January 24, 2018, the City again issued a violation to comply with the minimum required maintenance standards.
 
“In fact, it is clear that the Deauville has no intention of voluntarily undertaking the repairs necessary to bring the Property into compliance with the City Code and the City’s Historic Preservation Board, and Deauville is hedging its bets that the City will eventually allow the demolition of the structure,” according to the filing.
 
Quoting the transcript of the Unsafe Structures Board Hearing, the suit states owner Homero Meruelo said at the hearing, “It would be a favor that they demolish the [Property] and I get rid of this nightmare that I have. That’s the truth.”
 
“So, the building is full of water, full of mold and mildew. We have no power. I mean, what do we do? We have no money,” the suit quotes Meruelo.
 
“Incredibly, the only work that the Deauville has performed on the Property since the Deauville Beach Resort closed its doors to the public was the illegal work Deauville performed on the roof without any construction permit, which Deauville officials freely admitted under oath at the Unsafe Structures Case hearing,” the City claims.
 
The City also says it is owed $91,129 in resort and food and beverage sales taxes based on its audit of Deauville Associates. On Sept 19, 2018, the City filed a lien for the unpaid taxes.
 
“The City seeks the appointment of a receiver to: (1) ensure the collection of all resort taxes owed to the City by Deauville Associates, LLC; (2) manage the Property; (3) oversee all repair and remediation work required for the Property to comply with… City Code; (4) take all required measures to rectify all outstanding City violations related to the Property; (5) collect and remit all outstanding taxes related to the Property; and (6) collect and remit to the City all civil penalties or fines against the Property or Deauville,” according to the filing

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