The Goodtime Hotel could be set for a fresh start this summer after its owner and lender agreed to proceed with a foreclosure auction.
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Miami-Dade County Circuit Court Judge Thomas Rebull scheduled an auction of the Miami Beach hotel at 601 Washington Ave. for July 1 after ruling that an affiliate of Los Angeles-based CIM Group could foreclose on the property to collect a judgment of $204M.
The lender filed a foreclosure suit in January, claiming it was owed $150M.
Eric Birnbaum and Michael Fascitelli’s Imperial Cos. developed and owns the hotel but fell behind on its loan, which has a principal balance of $149M, $32M in interest, $21M in default interest and $1.5M in late fees, according to the filing.
The foreclosure sale is happening amid settlement talks in a yearlong legal dispute between the developers and lender concerning who is liable for losses at the struggling hotel.
The tussle started over a $152M loan that CIM's affiliate provided when the hotel opened in 2021 to refinance its construction loan.
The seven-story, 266-key hotel was developed in partnership with musician Pharrell Williams and David Grutman, a hospitality investor who founded the LIV nightclub. The pair hasn’t been involved in the project since 2024, a spokesperson for Grutman told the Miami Herald.
The hotel has a massive rooftop bar and was built to bring life back to the Washington Avenue strip of South Beach. But its opening on the heels of a global pandemic put a wrench in its tropical party vibes as the broader hospitality market softened.
In court filings, the owners said the hotel “was not performing as expected” by spring 2023, and “the Property and Loan were suffering distress.” That July, Birnbaum and Fascitelli offered to hand the keys to the property to CIM.
That same month, CIM's affiliate sued Birnbaum and Fascitelli in New York State Supreme Court, claiming they were on the hook for at least $40M tied to personal guarantees they agreed to when negotiating the loan.
Birnbaum and Fascitelli claimed in a countersuit filed in December that CIM was exploiting an error made by their lawyers — who allegedly missed new language the lender inserted into the final loan documents that held them personally responsible for the hotel's operating losses in perpetuity via a carry guarantee.
The lender has continued to seek enforcement of the guarantee and claimed in a January response to the countersuit that Birnbaum and Fascitelli's personal debt had grown to nearly $50M, plus interest and attorney's fees.
The lender and borrower "have been in serious discussion concerning ways to settle the claims and counterclaims asserted in this action and in a parallel mortgage foreclosure action," according to a filing in the New York dispute by both parties.
CIM asked to pause litigation with the developers, which agreed to the foreclosure action, until after the sale.
Birnbaum declined to comment. Attorneys for King & Spalding representing Imperial Cos. didn't respond to a request for comment.
CIM's attorney, Greenspoon Marder partner Jeffrey Gilbert, declined to comment. CIM did not respond to a request for comment.
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