UPDATED 4/19: An earlier version of this story reported the sale amount as $127 million.
KSL Capital Partners, LLC (KSL), a Denver-based private equity firm specializing in travel and leisure investments, has acquired the Margaritaville Hollywood Beach Resort, for $126.5 million according to county property records.
Characterized as a fairly complex deal, the sale closed on April 16 and was announced at the April 18 commission meeting. During the meeting, city leadership stated that the sale price was about $190 million according to the closing statement and SEC filings. No further information was provided on what that $190 million includes or how the additional $63.5 factored into the sale price. According to the South Florida Business Journal, a statement from KSL Capital said the full price was $190 million, adding that it was likely for the non-real estate assets of the business.
Commissioner Traci Callari said she was disappointed in the deal and Commissioner Peter Hernandez also indicated he believed the city did not benefit from the new arrangement.
The five-acre site between Johnson and Michigan streets where Margaritaville stands is owned by the City and was leased in 2013 for $20,000 a month, with a 15 percent increase every five years. At the time, the city projected that Hollywood will receive $1.9 billion from the resort over the span of the 99-year lease. According to Hollywood Mayor Josh Levy, the new holding company will assume all the obligations of the lease.
Davidson Hotels & Resorts has been named to manage the resort and has worked side-by-side with KSL through the acquisition process.
“We have confidence that Davidson’s team culture, brand knowledge, and unmatched support services are the key ingredients to driving investment value and improving operational performance,” said Bernard Siegel, a partner at KSL. “Further, we are thrilled to be in business with Margaritaville, a true lifestyle hospitality brand, delivering an authentic and unique resort experience.
“The Margaritaville Hollywood Beach Resort is a tremendous opportunity to continue leveraging our expertise in brand building and resort operations,” said Davidson’s chief executive officer John Belden. “This will be our 4th destination resort in Florida, joining the iconic Don CeSar and Beach House Suites by The Don CeSar in St. Pete Beach and the naturally luxurious Baker’s Cay Resort in Key Largo, set to open later this year.”
The 349 guest room and suite flagship property for the Margaritaville brand offers an abundance of live entertainment in an oceanfront setting and features eight diverse restaurant and bar concepts, a full-service spa and three pools providing the ideal venue for guests to kick back and enjoy the unmistakable Jimmy Buffett state of mind that embodies Margaritaville.
“We are excited to welcome both a best-in-class sponsor like KSL and a proven operator like Davidson Hotels & Resorts to our flagship resort,” said John Cohlan, the chief executive officer of Margaritaville. “Together we look forward to continuing to provide a unique vacation ‘state of mind’ experience for all our guests.”