Hollywood to Margaritaville developer: You owe us $1.7M
HOLLYWOOD – You’ve got 30 days to pay us $1.7 million. That’s the message from Hollywood to the developer of Margaritaville.
The demand came in a certified letter sent Monday.
Lon Tabatchnick, who built the 349-room resort on beachfront land owned by Hollywood, declined to comment, saying he had not yet seen the letter.
When the 17-story resort was sold to a private equity firm in April, Tabatchnick told Hollywood officials he did not owe the city any money because he did not make a profit from the sale. Under the terms of his deal with the city, Tabatchnick had agreed to pay 5 percent of the profit of any sale.
He later told the South Florida Sun Sentinel he did make a profit, but declined to say how much.
“The city is, without question, entitled to … $1,719,962.41,” City Attorney Doug Gonzales wrote in the letter to Tabatchnick.
Margaritaville opened in fall 2015, transforming a 5-acre city-owned parcel at Johnson Street and A1A into a lively entertainment spot.
The property sold for $190 million on April 12.
On June 11, Hollywood told Tabatchnick and his partner Starwood Capital that the city planned to conduct an audit to see whether Hollywood was owed any money from the sale.
Hollywood Commissioner Peter Hernandez, who cast the lone vote against the project five years ago and pushed for the audit, said Tuesday he was happy with the outcome.
“I knew there was going to be money coming to us,” Hernandez said. “I was hoping it would be more like $3 million, but we’ll take the $1.7 million. The city should be paid its fair share. And let’s move on.”
Commissioner Kevin Biederman said he’s glad the city took the time to analyze the transaction, but doesn’t think Tabatchnick will be quick to write a check.
“I’m sure he’s going to challenge it,” Biederman said. “It’s an interpretation of the contract language.”
After the resort was sold, several Hollywood commis sioners said they were surprised to learn that the $23 million in taxpayer money that helped bring Margaritaville to town was a grant and not a loan.
Because the developer received another $5 million to make improvements to Johnson and Michigan streets, critics claim the grant was actually $28 million.