Shore Club Dispute Halts Condo-Hotel Sales

A dispute between the owners at the Shore Club has prompted a halt in the sales of condo-hotel units there, just weeks after Ian Schrager quit as head of the company that runs the hip South Beach resort, Schrager said Tuesday.

Schrager said the friction was not related to his resigning earlier this month as chief executive of Morgans Hotel Group, which manages the Shore Club and owns the nearby Delano.

He will remain a consultant and minority owner at the company, but his leaving the top job marks an end to the one-time nightclub impresario’s formal role atop the Delano, whose 1995 opening helped both invent the “boutique hotel” concept and spark South Beach’s rejuvenation as a resort destination.

Schrager took the lead in launching the Shore Club’s push into the condominium market five months ago, and his cachet helped fuel sales. “Ian’s role was definitely important to the sales. . . He is a brand. He’s definitely a brand,” said Carolyn Block, an owner of Premier Sales Group in Fort Lauderdale, the brokerage handling Shore Club condo-hotel sales.

But Block also said the Shore Club’s reputation as a star-friendly, exclusive resort was enough to maintain what she said was a strong sales pace. “The Shore Club as a venue has been a destination for some time and has its established history,” she said. “There will still be celebrities who come and parties will take place.”

Schrager declined to describe the nature of the dispute between Shore Club majority owner Philip Pilevsky and Edward Scheetz, the new chief executive of Morgans Hotel who was previously co-chief executive of North Star Capital Partners, the majority owner of Morgans Hotel Group. Morgans holds a minority interest in the Shore Club, Schrager said.

“I’m optimistic the dispute will be resolved in a week or two. . . . It could just be a hiccup,” Schrager said. “It’s not a dispute that involves me.”

Pilevsky was traveling and couldn’t be reached for comment. His New York office did not respond to requests for interviews with other executives. A Morgans Hotel spokesman confirmed condo-hotel sales have been halted by the owners.

“We’re happy to do whatever the ownership wants to do,” said Gerald McKelvey.

Schrager said stepping down at Morgans, formerly Ian Schrager Hotels, will allow him to pursue more development deals, both for hotels and residential properties. He said he is pursuing buying the Riande hotel chain, which has hotels in Miami Beach and Miami.

At the Shore Club, condo-hotel sales were to fund a $25 million make-over of the 325 rooms, and prices for the units started in the high $400,000’s. Block said buyers had reserved about 60 percent of the units, but sales contracts hadn’t been signed.

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