Steven Michael and his company, developer Hudson Holdings, are officially out of the $65 million Gulfstream Hotel renovation project.
“I’m emotionally attached to hoping this becomes a successful hotel in Lake Worth,” Michael told The Palm Beach Post Monday morning. “Anything we can do to help them get to that end we’ll be there to do.”
In late March, CDS Gulfstream, the company that owns 51 percent of the historic hotel, sued partner HH Gulfstream, run by Michael, saying company owners for years engaged in racketeering activities to lure investors into the multi-million project.
“We believe this is not an isolated event and it’s a pattern of behavior that has been ongoing for some time,” said Stuart Kaplan, a managing partner at Kaplan & Parker, the Palm Beach Gardens law firm that applied the suit.
Last week, CDS Gulfstream and HH Gulfstream came to a mutually satisfying deal in which all lawsuits were dismissed.
Neither Michael or Kaplan would discuss the terms of the deal, which took about a week to hammer out.
“We’re satisfied, and I’m assuming they’re satisfied and that we’re all going our own ways,” Michael said. “I hope they do really well.”
Kaplan said The Gulfstream Hotel is now fully owned and operated by his clients, south county developer Bill Milmoe and vitamin kingpin Carl DeSantis. “My clients are scheduling with Lake Worth, and they’re interested in moving the project forward,” Kaplan said. “They are going to try to accelerate and fast-track the project to where it should have been a long time ago.”
City Manager Michael Bornstein did not respond to a request for comment.
The Gulfstream Hotel project would transform the 106-room downtown hotel, built in 1925, into an 87-room hotel with a downstairs restaurant, a champagne room and a rooftop sky bar while also building a five-story hotel annex to be branded by the Curio Collection, an upscale Hilton Hotel brand.
CDS Gulfstream had owned 51 percent of the project and was starting to arrange financing for it last year. It sued HH Gulfstream on Dec. 22, claiming a breach of the operating agreement.
In a Palm Beach County Circuit Court filing, CDS said HH failed to meet obligations to close on the deal to buy the site on Dec. 20 and that HH had more than $2.9 million available to do it.
CDS said HH was either unwilling or unable to buy CDS’ interest in the project.
HH filed a counter-suit in early January, saying HH had an operating agreement with CDS for a buy/sell provision.
CDS filed another lawsuit in March, saying Michael and south Florida developer Andrew Greenbaum used a variety of legal entities to commit fraud. The suit said both have run a business that affects interstate commerce through racketeering.
Michael, last month, said the filing was a litigation strategy to get them to the negotiating table. “Were we to defend against these salacious allegations, we have no doubt we would prevail,” he said.
The hotel has been the target of numerous lawsuits and complaints the past few years.
A suit was filed in 2016 over building heights by former City Commissioner Jo-Ann Golden and two others.
In January 2017, Michael said he was considering selling the site, claiming city officials weren’t doing enough to attract more investment in the city. “I’m a long-term investor, and we want to be part of a city that is moving forward,” Michael said at the time. “It’s not just about our investment. It’s important that investors follow us, and I feel that Lake Worth isn’t promoting that.”
As for why the project didn’t work out for Michael, he declined to give a reason. “It was delayed, but I’m confident it will work out and it will be built. I want to see this hotel open because it’s important for Lake Worth.”