The Palm House has been closed for 14 years but the new owner has won key approvals from town officials to begin working on renovations.
| Palm Beach Daily News
The long-dormant Palm House hotel — closed for 14 years on one of Palm Beach main streets — could reopen by Thanksgiving 2022, a representative of the new owner has told the Town Council.
And that came as welcome news to officials this month as they considered approving agreements needed before renovations could begin at the eyesore at 160 Royal Palm Way.
Palm Beach residents have been waiting a long time to see progress at the property, council members agreed.
Getting the hotel reopened has been “14 years in the making, so it can’t come soon enough,” Councilwoman Danielle Moore said at the council’s meeting March 3.
Mark Banfield, representing hotel owner LR Palm House LLC, assured the council that the hotel’s owner was ready to begin preliminary construction work as soon as the council gave the go-ahead.
“It should take us 14 months to build it, so, hopefully, that pain will be over fairly shortly for you,” Banfield said.
The owner is an affiliate of London + Regional Properties, an international hospitality and real estate firm. During the meeting, Mayor Gail Coniglio described the company as a “first-class“ hotelier.
In 2007, under the previous owner — a company controlled by since-convicted felon Robert V. Matthews — renovations began and proceeded in fits and starts amid ownership changes before finally grinding to a halt in 2014. The property ended up in bankruptcy amid a swirl of civil and criminal fraud charges before the hotel finally sold in May 2019 for nearly $40 million to the company Banfield represents.
Weddings are key
The hotel will have 79 guest rooms — but those rooms won’t alone make the property financially successful, Banfield told the council. Instead, he said, hosting money-making wedding celebrations and other events on site will be the key to the property’s long-term viability.
A critical part of that mission, Banfield told the council, was to have enough seats in the ballroom, which he and others involved in the project refer to as a “function room.”
Those seats were among dozens of items the council considered before giving its unanimous approval to the so-called “declaration of use” agreement that will govern the hotel’s operations. Council members also unanimously approved an agreement to let the owner start the pre-construction phase of the renovation.
The “amended and restated” declaration of use agreement reconciled differences between the plans authorized under the previous ownership — in 2007, 2012 and 2013 — and revisions requested by the new owner. Banfield said the latest changes would make the hotel operations more efficient and financially viable.
Several times during their hour-and-a-half discussion, council members said they wanted to do what they could to help ensure the hotel’s success.
Council President Maggie Zeidman cautioned at one point against “restricting them so much that they won’t get the wedding (bookings)” during the hotel’s first season.
Traffic, parking worries
But council members didn’t hesitate to air concerns about possible traffic congestion around the hotel and how employee and valet guest parking would be handled. More seating, council members said, could lead to more traffic in the neighborhood, especially during the high season when diners would visit the hotel’s restaurant at the same time an event was taking place in the function room.
Under the plan they approved, council members agreed the hotel could have 175 seats in the function room — 25 fewer than the owner hoped to get in its original proposal, but 25 more than approved under the previous ownership.
The council also agreed that once the hotel is open for three months, the owner can request 25 additional function-room seats if traffic proves manageable and there are no other problems. In the same way, should problems become apparent, the council could scale back the number of seats to 150.
In addition to the function room’s seats, 88 seats will be allowed in the restaurant and another 36 in a poolside loggia.
Council members noted that the area around the Palm House had become busier over the past decade and mentioned the Carriage House private club under construction nearby on South County Road, which might add to traffic woes.
“This area of town has grown in terms of restaurants and activities,” said Councilwoman Bobbie Lindsay.
Banfield said employees of the hotel would ride shuttles to and from the property, with pickups and drop-offs at the West Palm Beach Marriott near the Kravis Center. That hotel also is owned by the North American affiliate of London + Regional Properties.
The operations document presented to the council had already been negotiated among the hotel owner and owners of three properties directly behind the hotel. The neighbors endorsed the document, their attorneys told the council.
Those neighbors had previously negotiated changes to the building’s architecture to address their concerns about noise, privacy and light spillage. Before their vote, the council addressed similar concerns, demanding language be clarified to prevent people from gathering on the roofs of buildings and limiting the type of live music outdoor to “acoustic” background music.
The main construction-management agreement must still be approved by the council, and the neighbors must also endorse it, officials agreed.
Robert Matthews, using an ownership company, bought the hotel property in 2006 and began renovations. In 2009, Wellington developer and private lender Glenn Straub bought the property in foreclosure from Matthews through the same company and carried out renovations. Straub transferred ownership back to the control of Matthews in 2013, court testimony shows.
Matthews is awaiting sentencing on Palm House-related charges of wire and bank fraud, conspiracy and tax evasion. Matthews pleaded guilty in April 2019 in a U.S. District Court in Connecticut after prosecutors said he and others defrauded foreign investors and redirected some of that money for his personal use.
Matthews’ wife, Mia, also has pleaded guilty to a single count of tax evasion and is awaiting sentencing.
Matthews’ brother Gerry Matthews and contractor Nicholas Laudano have pleaded guilty in the money-laundering scheme and are scheduled for sentencing in Connecticut on April 29 and Oct. 27, respectively, the court docket shows. Gerry Matthews’ attorney has asked for a six-month delay in his sentencing.
Attorney Leslie R. Evans is awaiting trial in his Palm House-related criminal case, which has been delayed by coronavirus-pandemic judicial orders that have postponed federal trials and hearings in Connecticut. Jury selection in Evans’ trial is set to begin Oct. 4, according to court filings.