April 15, 2021

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Ruling Allows Miami Beach to Fine Owners for Failing to Maintain Historic Deauville Hotel

6 min read
The City of Miami Beach can fine the owners of the Deauville Hotel $5,000 a day for failing to maintain the property resulting in the deterioration of the historic structure until actions are taken to bring it into compliance with City Code, according to a ruling by the City’s Special Master. Chief Special Master Enrique Zamora stated, “The City of Miami Beach has proven by clear and convincing evidence” that the hotel’s owners have “failed to take prompt and corrective action to secure the building’s historic, architectural, and structural integrity as required by [City Code].” Fines were permitted to commence as of March 1.

The historic hotel has been closed since an electrical fire in July 2017. The damage was compounded by Hurricane Irma two months later. In an effort to force the owners of the iconic hotel to make the necessary repairs, the City filed suit in February 2019.  Last fall, then City Attorney, now Interim City Manager, Raul Aguila told City Commissioners that the lawsuit for demolition by neglect is “litigation that we will likely be into for the long term and will most likely be adversarial.” At the time, Commissioners directed the Administration to pursue “any and all aggressive remedies” to get a resolution.

In addition to that litigation, the City went to the Special Master seeking fines as one more avenue to compel repairs. Deputy City Attorney Steven Rothstein told Zamora that building and fire code violations at the Deauville date back to 2010. By 2014, failure to correct the violations resulted in $1,000 in fines per day. Between 2010 and 2017, Rothstein said the City and the Deauville’s owners had been before the Special master 17 times to try to resolve the issues, the last appearance coming shortly after the fire. “The fire violations had never been brought into compliance,” he noted. At that point, the fines stopped “because of the fire and it was a vacant and abandoned building.”

Since then, Rothstein said, there has been a “complete lack of maintenance,” no life safety system, no water, no power, and no plans submitted to reopen the building.

“This is a serious condition,” he said, citing life safety issues for any first responders who would have to enter the building and for members of the homeless population who have been seen from the windows of the abandoned building.  

“There must be a million dollars in fines,” Zamora said in response to the City’s request for reinstatement of the fines. “What are we going to accomplish by having more fines?”

Rothstein said based on representations from the owners “that these matters would be taken care of… fines were stopped. In retrospect they should not have been stopped.”

Deauville attorney, Jose Chanfrau, says his clients, the Meruelo family which owns the Deauville, were in process of obtaining the permit to correct the violations when the fire occurred. Now, he said, they are caught in pending litigation with FP&L to restore power to the building as well as with their insurance carriers to make the necessary repairs. “Until there is permanent electric power, you cannot go in there and test the Life Safety System to determine if its operational or needs some repair.”

Separate from the necessary repairs and maintenance, Rothstein said the City was concerned that the property was not being properly secured, allowing unauthorized entry. “We’re not talking about a three-story hotel. We’re talking about in excess of 16 stories in the tower, two sublevels, boiler rooms downstairs. This is an extremely dangerous condition once somebody gets into the property.” 

Chanfrau accused the City of seeking the fines as a way of “try[ing] to squeeze the Deauville in this courtroom to gain an advantage in the other” court case which seeks a receiver for the Deauville and a ruling of demolition by neglect. He said the Deauville was providing security at the Deauville but will address any issues with regard to missing reports from the required “fire watch.”

“A fine is supposed to provide, if you want to call it, a lever to someone to do something they can do,” he argued. “The Deauville cannot reenergize the building right now. We’re spending a lot of money litigating with FP&L and insurance carriers so we can put the building back into service.”

“The whole purpose of a fine,” he reiterated, “is to encourage someone to do something it should be doing and have the power to do. We do not.”

“I believe something should have been done to secure the building,” Zamora said, “You don’t need power to secure the entrances… Right now, I am concerned the building is not secure and that creates a tremendous life safety problem.” Based on that, he restarted the $1,000 a day fines until the building is secured. 

The $5,000 a day fines were related to a second action by the City charging the Deauville’s owners “failed to preserve against decay, deterioration and demolition” by neglect of the historic structure. 

The Miami-Dade County Unsafe Structures Board issued an order in January 2019 which required, among other things, that a temporary electrical permit be applied for within 30 days and that once the permit application had been made, power would be restored within 60 days so that repairs could commence.

The City stated no such permit has been applied for. In the meantime, Rothstein said the building has continued to deteriorate. While the City’s Building Department has not had access to the building’s interior, exposed and rusted rebar, missing windows, and spalling concrete can be observed from the outside. Recently, chunks of concrete fell from the building’s east façade onto the public beachwalk. 

The deterioration, Rothstein argued, has occurred for “over a decade” and, based on that, “this would fit within the definition of demolition by neglect” in the City Code which allows for a maximum of $5,000 a day in fines.  

City Preservation Manager Debbie Tackett testifying about the condition of the hotel said, “The hope is… that we can retain this building that is a really important part of [the City’s] heritage. It’s also an important part of the heritage of the nation which not every building in Miami Beach you can say that about.” The 538-room oceanfront hotel was designed by architect Melvin Grossman and constructed in 1957. It is noted for being a favored location for entertainers such as Frank Sinatra, Sammy Davis, Jr, Dean Martin, Tony Bennett, and others but it is best known for hosting the Beatles’ February 1964 performance on The Ed Sullivan Show. 
 
“Because of the condition,” she said, “we’re in jeopardy of not being able to retain as much of the architectural fabric as we would like.”

“This is a highly unique, really celebrated piece of architecture,” she added.

In closing, Rothstein emphasized the Deauville’s “historic architectural and cultural value to, not only the North Beach community but the City of Miami Beach.” 

“Dating back to 2014, well before the fire,” Rothstein said, there has been a “public safety issue” with the owners “not maintaining [the building] to minimum standards in a historic district. Further neglect can only risk damage, not only to the property, but to life.”

“Nobody’s saying it’s falling down or in imminent danger of collapse,” he said. The City’s goal is “to protect this collateral under the City Code to prevent any further decay or deterioration.”

Chanfrau continued to assert the lack of electrical power created a situation where the owners could not take any action. “We spent over a million dollars in trying to reconnect electrical power… until, literally, Florida Power and Light said they would not turn on the switch. They wanted us to relocate the vault because they said it was below grade” though, he said, “The building was built in 1957 under different standards.”

Again, noting the ongoing litigation with FP&L and the insurance carriers, he said, “The Deauville is doing everything it can to try to repair and put the building back into service. This is not a case where the Deauville is just sitting back allowing the building to decay. It was an active, usable hotel until the fire.”

“This is clearly, in my opinion, at this juncture a method for basically getting [an] advantage in the other litigation,” Chanfrau said.

Zamora responded, “I don’t doubt that your client is spending a lot of money in litigation, but litigation doesn’t help the building.” Noting the fire occurred in 2017, he added, “Here we are in 2021 and I haven’t seen any evidence of anything substantial that your client has done other than litigation… Some of the money should be used to try to save the building. I’m not here to give advice, I’m just telling you the way I’m hearing the evidence.”