CIM Hits Celebrity-Backed Goodtime Hotel With $150M Foreclosure Suit
The developers of The Goodtime Hotel aren't in a partying mood, as the lender on the Miami Beach property sued to foreclose on the property's mortgage.
An affiliate of Los Angeles-based CIM Group filed a $150M foreclosure suit in January against the 5-year-old hotel, claiming its owner, Washington Squared Owner LLC, failed to pay off the loan on the property.
The seven-story hotel, developed by Eric Birnbaum and Michael Fascitelli's Imperial Cos., opened in 2021 — a tough time for the hospitality industry following the pandemic. But while many luxury hotels in Miami have flourished since, The Goodtime, known for its rooftop pool parties, never met expectations.
The 266-key Goodtime Hotel was developed in a partnership with musician Pharrell Williams and hospitality investor David Grutman, who founded the Liv nightclub, although the pair hasn't been involved in the project since 2024, according to the Miami Herald, which first reported the suit.
Birnbaum and Fascitelli landed a $164M loan, later reduced to $152M, from CIM in 2021 to refinance the hotel's construction loan. The suit claims the developers defaulted on the loan two years later.
The foreclosure suit, filed Jan. 27 in Miami-Dade County Circuit Court, is an escalation in a legal battle between CIM and Birnbaum and Fascitelli in Manhattan court over the same loan.
CIM in July sued the loan guarantors — Birnbaum, who is CEO of Dreamscape Hospitality, and Fascitelli, former CEO of Vornado Realty Trust — alleging they are personally liable for more than $40M in guarantees tied to the struggling property.
Birnbaum and Fascitelli filed a countersuit in December, alleging that CIM inserted language into a guarantee that they would have never agreed to. The developers had agreed to a term sheet with JPMorgan Chase on a loan — the bank was identified as the lender in media reports at the time.
In the final loan, CIM changed language that the developers claim was a drafting error that essentially keeps them on the hook for the hotel at 601 Washington Ave., potentially forever via a carry guarantee.
While the attorneys admitted to the mistake and asked CIM to correct it, the lender is looking to enforce the signed guarantee.
CIM, which controls about $30B of real estate assets, responded to the counterclaim at the end of January, denying the developers' allegations and claiming it is now owed $49.9M, plus interest and attorney fees.
The lender's “intent was as written in the fully integrated Carry Guaranty and Loan Agreement,” the response says.
“There was no mutual mistake.”
Birnbaum declined to comment. Attorneys for King & Spalding, representing the developers, didn't respond to a request for comment. CIM's attorney, Greenspoon Marder partner Jeffrey Gilbert, declined to comment.
