A new team is heading the upscale Setai hotel in Miami Beach, even as the former management company alleges breach of contract in court.
The courtyard area at the Setai Miami Beach on Wednesday May 16, 2012, where the owners recently kicked out the former management company and installed new operators headed by managing director, Guenter Richter.
When Guenter Richter walks the grounds of the luxury Setai hotel in Miami Beach, he sees potential everywhere: in the paths that lead to the three pools, in the entrances that could use some sprucing up, in the cozy restaurant used only for private functions.
“I have to be careful not to run but walk,” said Richter, a veteran of luxury hotels in Miami-Dade and New York City. “It can only get better — not to say it wasn’t good.”
Richter, managing director of the property at 2001 Collins Ave. for the past month, won’t say a negative word about his predecessors.
He doesn’t have to. Accusations of mismanagement and breach of contract have been flying since the beginning of April, after the owner, a subsidiary of Lehman Brothers Holdings, staged a middle-of-the-night takeover on March 31 and ousted Singapore-based General Hotel Management.
The owner blamed GHM — which was involved in the hotel’s design and managed it from the beginning — for poor performance and brought in a new operator, Trevi Luxury Hospitality Group.
“Setai was created by GHM,” said former general manager Hansjoerg Meier, a current GHM executive. “It is a very unique hotel that took a lot of effort, a lot of touches, a lot of hard work.”
Meier remembers wondering if someone was playing an April Fools’ Day prank when he saw the missed calls from 2:30 a.m.
“We were completely surprised,” he said.
In a lawsuit filed earlier this month, GHM accuses the owner of breaking the 15-year management contract by not giving the company written notice of a problem or a chance to correct any issues.
William A. Brewer III, a partner at the Dallas law firm of Bickel & Brewer who is representing the owner, said the owner believed there was no choice but to change management.
“The owner believes it appropriately terminated the relationship with GHM in full accordance with the management agreement,” Brewer wrote in an email.
GHM, chaired by luxury hotel legend Adrian Zecha, said its reputation has suffered and future business could be at risk. The lawsuit doesn’t name an amount, but an attorney representing GHM says the damage is steep.
“Although GHM is still adding up its total damages, we expect the final judgment against Lehman will be in the many tens of millions and may well exceed the value of the hotel,” said attorney Daniel F. Benavides of Coral Gables firm Kozyak Tropin & Throckmorton, who filed the suit in Miami-Dade on behalf of GHM.
Meier said the company’s first choice would be to take over operations of the hotel again — an option Benavides said GHM reserves the right to request from the court.
The Lehman Brothers affiliate, Setai Owners LLC,started legal proceedings at the time of the takeover, filing a request for arbitration that seeks tens of millions of dollars in compensation from GHM.
Leaving the legal wrangling to the lawyers, Richter, the new managing director, is concentrating on bringing in staffers to replace those who left or were let go, improving the guest experience and coming up with a wish list for the owner’s representatives.
He’s got a new executive chef in place with a new menu to follow, and plans to relaunch the small restaurant with a still-to-be-determined concept. In the meantime, he wants to institute a visiting chefs program.
Richter, who previously worked at the Grand Bay hotel in Coconut Grove and the former Regent Bal Harbour (now One Bal Harbour), also wants to drive more locals to the hotel restaurant with a better value proposition. He’s got plans for a brand new beachside restaurant, better service on the beach and upgraded room service options.
“We do have the opportunity to be in the forefront of all luxury hotels,” Richter said. “Do I have the desire to be the best? Yes. It has to be the service, the amenities and the attention to details.”
He also wants to improve the hotel’s curb appeal, institute butler service for penthouse guests and start a more proactive concierge program. Sales and marketing staffers are more aggressively targeting travelers from Brazil and the Middle East and small group business.
Suites at the Asian-themed property, which opened in late 2004, are priced between $575-$2,500 a night for a mid-June weekend. The property includes 251 units, 126 of which can be booked for hotel stays and 125 of which are private apartments.
Richter said he’s committed to being accessible, which the manager of the Setai Resort & Residences Condominium Association said has been important during the transition.
The new operators held weekly sessions with owners throughout April, association manager Martin Scasserra said, and any issues were mostly limited to the first week. The condo-hotel has about 175 owners.
“Everyone recognizes that there’s always an opportunity to improve and to pay new attention to different areas,” Scasserra said. “I think that people are interested and excited to see the extent that this property can be improved even more than it already was.”
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