How Gene Prescott Saved the Biltmore Hotel, Maintaining the City’s Most Important Landmark
By J.P. Faber
It is Saturday night and Gene Prescott is having dinner at the Biltmore Hotel. He is at his favorite table, in the courtyard of the Fontana Restaurant. It is the table that faces the glass doors where the help enters and leaves with the food. It is the perfect place to watch the restaurant operate. A few minutes after he is seated, the chef comes out. While Gene Prescott, owner of the Biltmore, no longer micromanages this vast, elegant hotel, he stays in close touch with his team of lieutenants, one of whom is the Fontana chef. Prescott wants to know what the specials are this evening; he orders several to taste.
Technically speaking, Gene Prescott is not the owner of the Biltmore Hotel. It is actually owned by the City of Coral Gables and leased to Prescott’s Seaway Corporation. But that is really a technicality, when you consider that the lease is for 99 years. Prescott is, de facto, the man who possesses what is arguably the most important building in Coral Gables, as iconic to the city as the Empire State Building is to New York.
The stewardship of the Biltmore Hotel has not been a light task. It is a classic case of ‘be careful what you wish for’ writ large. Others before him failed at the job of making it work as a hotel. But not Prescott. From the moment he laid eyes on the building that Gables founding father George Merrick considered his greatest achievement, Prescott was in love. Since the Idaho native took over the reins nearly 28 years ago, the Biltmore has become such an absorbing passion that even his son – heir apparent Tom Prescott – says he can’t help feeling jealous at times over the attention his father pays to the grand dame of South Florida hotels.
“From the moment I first saw the hotel I realized there was nothing like it anywhere in the world,” says Prescott. “I knew that it was the opportunity of a lifetime; the promise that it held, what could be, all of the opportunities that we have since realized.” What he did not know was how quickly his skills as a successful entrepreneur in real estate and hospitality services would be put to the test.
The Biltmore is such an integral part of the social fabric of Coral Gables today that it is hard to imagine the city without it. It is where the civic organizations hold their meetings. It is a coveted location for weddings, even if you are not a member of Coral Gables society. It is where international dignitaries are feted. It is where the area’s most powerful politicians hold their fundraisers – and their victory celebrations. It is where celebrities who are sick of South Beach stay. It is where you take your out-of-town friends to impress them.
But the Biltmore’s fate as a hotel and social center (and home to a PGA-level golf course) was by no means certain when Prescott arrived in 1991. Except for a three-year stint from 1987 to 1990, the building had not functioned as a hotel for half a century, not since the U.S. Army commandeered it as a military hospital during World War II. Two years after the war, the Veterans Administration took over, and UM started their medical school here in 1952. Both left when the General Services Administration (GSA) took over in 1968.
By the time the City of Coral Gables bought the Biltmore for $3 million in 1973, it had been sitting idle for five years. Plans for its destiny included making it a housing complex, with adjacent apartment buildings, or turning it into a campus for FIU. In the end, after bringing the golf course and country club back to life, the city agreed to a proposal by a development team headed by Earl Worsham to restore the Biltmore to a 266-suite hotel for $40 million. It took three years to restore and three years more to go bust; in 1990, Barnett Bank foreclosed on a $27 million loan to Worsham et. al. and turned off the lights (thought kept the air conditioning going to prevent mold). Enter Prescott’s Seaway Corporation.
In many ways, Gene Prescott’s career perfectly prepared him for the Biltmore. Raised on a cattle ranch in Idaho, he got his MBA at the University of Idaho and then got an M.S. in finance at Carnegie Mellon in Pittsburgh. He took more finance classes at Case Western in Cleveland while working for accounting giant Touche Ross, but soon departed for the opportunity to work for the Olivetti corporation in Italy, where they were transitioning from making typewriters to producing office computers. “They wanted to bring American management techniques to Italy,” says Prescott. “I went thinking it would be a year and ended up staying for three years.”
While at Olivetti, where he worked on production schedules, Prescott learned two key lessons: Be very careful who you hire (Italian companies were not allowed to fire people at the time) and be very careful with your financial forecasts (since hiring was directly tied to them). He also learned Italian (though he says poorly) and married an Italian woman. The couple later divorced, but not before having two children.
Prescott’s next stop was at Applied Devices, a software company based in Connecticut, as their comptroller. “This was another great experience for me. One week after I got there, we were de-listed from the American Stock exchange, the bank called our loan and they bounced the payroll checks,” he says. The electrical equipment company survived by downsizing; one of Prescott’s more painful experiences was having to fire almost 500 employees at a factory in Muncie, Indiana. “After that I had a very tough skin,” he says.
Then Prescott got his first taste of the hospitality industry. He was hired as a kind of workout specialist for Italian travel company Pierbusseti, which had offices in Pittsburgh. It had overextended itself with its Club International reward card program that promised vacation packages it couldn’t deliver. Prescott wound down the program, earning sufficient bonuses for a job well done to make his first real estate investment. Again, it was a troubled business that he was able to fix, a cold storage company in New Jersey “that turned out to be a good proposition,” says Prescott. “We ended up going from one to two to four cold storage facilities. We still have two in New Jersey.” The other sites were later developed and sold.
Flash forward to 1994. Prescott is now in his late forties. His Seaway Corporation, with a few bumps along the way and several partners, has done well for itself. Besides its successful refrigerated warehouse business, it owns a wholesale travel business in Chicago; the Sheraton Sand Key Resort in Clearwater, Florida; the Staten Island Hotel in New York; and the Alexander All Suite Hotel on Miami Beach.
While all of these properties are financial successes, none compare with – or hold the attention of Prescott – like the Biltmore Hotel. And now his crown jewel is about to debut on the world stage with something called the Summit of the Americas.
In a bold effort to move his agenda forward for the Western Hemisphere, President Bill Clinton had called for a meeting of all 34 heads of state from Latin America – everyone except for Fidel Castro of Cuba. And his team decided to hold it at the Biltmore Hotel. All at once, the hotel was hosting President Ernesto Zedillo of Mexico, President Carlos Menem of Argentina, President Itamar Franco of Brazil, President Alberto Fujimori of Peru and so on. Talk about upping your game.
“The Summit was a landmark event for us,” says Prescott. “We worked our tail off, with all the political influence we had, to get it here. And it was great.” Prescott was in his glory, hobnobbing with the likes of Menem (“he was a real pistol”) and Zedillo (“he was a little preoccupied with inflation at home”), and getting especially close to Bill Clinton, who returned in 2001 to celebrate the hotel’s 75th Anniversary.
Not only did the Summit help establish the Biltmore’s image as a world class hotel, notes Prescott’s son Tom — and earn the hotel enormous publicity throughout the Americas — “It was also one of the great moments establishing Coral Gables as a gateway to Latin America.”
It was also a far cry from just two years earlier, when Seaway Corporation cut its deal with Barnett Bank to take over the empty hotel. Barnett, Seaway’s Florida bank, had approached them on a bailout of the property. Prescott was busy at the time with plans to upgrade the Sheraton Sand Key Resort in Clearwater and working a new property he was going to launch in Key West. But the Biltmore captured his imagination, as well as the company’s resources earmarked for Florida.
It was not easy whipping the Biltmore into shape. After Seaway secured the lease, Prescott ironically faced the same challenge that derailed the Biltmore’s first rollout as a luxury hotel in the Roaring Twenties: A major hurricane. In 1926 the “Great Miami” hurricane devasted Greater Miami with sustained winds of 150 mph, causing hundreds of deaths. The Biltmore never recovered its swagger.
In 1992, just months after Seaway took over, Miami was hit with Hurricane Andrew. While it did not hit the Gables directly, it was a major blow to the area, and forced Prescott to hire 100 staff overnight, without sufficient time to train, let along vet them, in order to open prematurely. He had no choice; similar to 1926, the Biltmore became a place of refuge in the wake of the hurricane, especially for families of emergency crews working around the clock. Prescott said it took a year to “feather things out” from that peremptory, bumpy beginning, but the hurricane came with a silver lining. “The hurricane became a personal connection to the city as a whole, to the government and the broader community,” says Tom. “We had a real personal connection from that point onward… There were families that came here, and in subsequent years — decades later — came back and talked about that experience of coming for refuge and knowing dad personally.”
After the summit the Biltmore thrived, becoming THE place for the rich, powerful, and famous to stay, especially before the advent of South Beach. The list of celebrities who have visited the Biltmore is nothing less than astonishing, from Muhammad Ali and Lauren Bacall to Cameron Diaz and Woody Harrelson. Not that the Biltmore was a particularly lucrative investment for Seaway. Says John Allen, executive director of the Coral Gables Museum, “Financially it has always been a challenge, but it has been a success in every other way.” In certain years, quips Prescott, his Staten Island Hotel alone made more money than the Biltmore. The challenge? Simply that the hotel was, and remains, an expensive property to maintain. By virtue of its lease, and the covenant that Coral Gables signed with the Federal GSA, the property must be well maintained as a historic landmark.
When times were good, Prescott did not object to funding the restorations and maintenance as needed, putting in some $40 million during the first decade of ownership. But in the second decade, the Great Recession hit the country, and the burden became too much.
“I had felt that the city was not fulfilling their obligation, which was to put money into the property,” says Prescott. “We’d put a lot more money into the building and the city had not participated… I finally said, ‘Enough. I am going to stop paying.’”
The result was a six-month standoff in 2009, during which the Biltmore withheld its rent, a percentage of revenue that equals between $1.7 million and $2.2 million a year. While the move got the attention of the city council, it produced a slew of bad press for the property, which in turn started to cost it clients. “From a business point of view, we had to settle this thing. So, we paid them off, 100 percent of what we owed them,” says Prescott, whose team does not particularly relish talking about those sour years – except to compare them with today, when the relationship between the city and the Biltmore is experiencing a golden era.
“It is a difficult property to manage because of its age and the upkeep,” says Coral Gables Mayor Raúl Valdés-Fauli. “But Gene has made it go and it’s our pride and joy and symbol of the city.” Two years ago, Valdes-Fauli’s administration agreed to help the Biltmore with its latest round of restorations, a $35 million makeover that included replacing more than 1,000 windows.
“The city fathers recognized that it’s a 100-year-old building, with mechanics, plumbing, electrical, and windows that go back many, many years,” says Stanley Friedman, one of Prescott’s inner circle who has worked as a consiglieri advisor to him for three decades. “All the windows had to be replaced. That alone cost $10 million… The city recognized this and they were very gracious in giving us five years, with half the rent that we paid going toward improvements to the building.” Besides a redo of the common areas, including the magnificent central lobby, the golf course was brought back to its 1926 glory and extended to 7,000 yards to qualify for PGA championships.
Today, the Biltmore is on the rise. In the last half of 2019 its occupancy rate exceeded the 65 percent benchmark that defines success in a hotel. It also continues to host some 300 weddings a year. “It’s a national historic landmark, it’s got life and chemistry that other places don’t have,” says Ben Mollere, Corporate VP of Baptist Health Group, who worked for Prescott for more than a dozen years as VP of sales and marketing. “You’ll never find another place like it for people who look for a certain experience.”
That “certain experience” is what current VP of Marketing & Sales Philippe Parodi is banking on for a strong decade ahead. “I think that Miami has re-emerged from many years of being only South Beach and Miami Beach,” he says. “[Travelers today] really look at a destination for what it has to offer, which is authenticity, culture, art, different communities, different kinds of architecture — basically the same values that we keep in preserving the hotel’s history.” Prescott is also keen on keeping up with the times, personally insisting that rooms add numerous outlets for personal electronic devices.
Gene Prescott will meanwhile tell you that the hotel business is all about the numbers. The occupancy rates, the industry trends, the cash flow. He and his inner circle of long-time employees – the controllers, the managers, and especially his son Tom, who now runs much of the daily operations – are already bracing for an influx of new hotel rooms in Miami-Dade. But Prescott knows that while the devil is in the details, a lot of those details are the people.
“In the end, the best part of all this is the people,” says Prescott, and that doesn’t mean just the presidents, senators, celebrities, and community leaders that he has hosted at the Biltmore. It also means the close team that advises him, and the 650 employees of the Biltmore, many of whom have been at the hotel for 10, 20, even 25 years. He is the kind of guy who can visit a president one day (he was invited to the most recent White House Christmas party) and then crack a joke with a groundskeeper the next (“Hey,” he says to a couple of workers who are using a level to check how straight a new sign is. “Can’t you just use your eyes to see if that’s straight? You must be getting old!” They guffaw, because Prescott is now in his mid-70s.)
Prescott is also now the sole owner of the Seaway Corporation, having bought out his partner Robert Kay more than three years ago; at the time, Kay had wanted to sell the Biltmore to a third party and get out of the business altogether. Prescott, predictably, did not want to let go of his crown jewel in Coral Gables, so he agreed to buy out Kay (reported at the time for $28 million). Consequently, Prescott remains the benevolent monarch of the Biltmore. And for those who know and admire and love him — the community, the celebrities, the politicians, the regular guests, the employees, his family — that is how it should be.
“Gene’s restoration of the Biltmore Hotel will go down as one of the classic endeavors of any citizen who loves this city,” says his friend Mike Carricarte, the former chairman of insurance giant Amadex. “He saved it.” Museum director Allen, who authored the monograph “Fate in the Balance,” a history of the Biltmore from 1926 to 1985, puts it this way: “It’s pretty safe to say there wouldn’t be a Biltmore without Gene… The Gables is the Biltmore, and the Biltmore is Gene Prescott.”