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Plaza Construction Negotiating Pay Settlement for Florida Ritz-Carlton Renovation
A photo taken in 2010 of the Ritz-Carlton in Miami Beach. Photo by Infrogmation of New Orleans via Wikimedia Commons.
Lionstone Development, owner of the Ritz-Carlton hotel in Miami Beach's South Beach section, began a $90-million renovation in 2017 after damage by Hurricane Irma forced the property's closing. The company reopened the hotel this past January to considerable acclaim in the hospitality industry press.
Then COVID-19 hit, devastating South Florida’s previously booming hotel industry and triggering thousands of layoffs.
In April, Plaza Construction Group placed a $7.7-million construction lien on the hotel, claiming that what it is owed is the last piece of a $40.8-million contract. The amount does not include change orders, according to the lien filed with the Miami-Dade County clerk’s office.
Plaza says it is negotiating with Lionstone and cited the hardships created by the pandemic. “Plaza Construction and the project owner are working together to try to resolve this matter amicably," the company said in a statement. "Plaza and the project owner have a strong relationship and are proud of the product that the project yielded."
The project's completion just prior to the start of the pandemic and the resulting "shut down'" enacted by the City of Miami Beach were unfortunate for all, the company added.
Officials of Lionstone Group could not be reached for comment.
The construction lien filed against the developer and hotel operator first became apparent on the website of Levelset, a payment services software company that earlier this year unveiled a pay practice rating system.
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Since the pandemic began, payments to contractors slowed as developers and project owners faced a cash crunch in the wake of the virus-triggered economic downturn. The number of liens filed by construction companies jumped 40% in March compared to January, Levelset noted in a first quarter report published this spring.
In its lien filing, Plaza Construction said it began work in late September 2017. That was just a few weeks after the prominent hotel had been forced to shut down and lay off nearly 300 workers after sustaining damage from Hurricane Irma.
Plaza said it finished work on March 18, roughly one month before filing the lien.
The hotel reopened on Jan. 27, just five weeks before the virus crisis hit the U.S. in full force, with its general manager, Sase Gjorsovski, looking forward to a busy year ahead. “Given the tremendous thought that has gone into this $90-million renaissance, I’m confident that leisure travelers, business travelers, and groups alike will find our ‘big reveal’ well worth the wait,” he said in a press release.
