Fort Lauderdale beach unfinished hotel files Chapter 11 to halt $37M foreclosure
March 1, 2018
The developer of the unfinished Las Olas Ocean Resort filed Chapter 11 reorganization to halt a foreclosure lawsuit and deal with dozens of Chinese immigrant investors in the EB-5 visa program.
The company, 550 Seabreeze Development LLC, filed a Chapter 11 petition in the U.S. Bankruptcy Court.
550 Seabreeze is the developer of Las Olas Ocean Resort, designed as a 12-story hotel with 136 rooms plus a four-story parking garage with 268 spaces and a restaurant measuring 12,000 square feet.
The development’s construction manager, Straticon, stopped building the hotel and filed liens against 550 Seabreeze in Broward County Circuit Court, alleging that the company stopped paying contractors.
In January, Bancorp Bank filed a foreclosure suit against 550 Seabreeze and another limited liability company, JAWOF 515 Seabreeze LLC, alleging default on a mortgage loan with an unpaid principal balance of $36.9 million.
The bank claims in its suit that the mortgage loan is secured by the hotel development site at 550 Seabreeze Boulevard in Fort Lauderdale, which spans 34,299 square feet, and parking lot across the street at 515 Seabreeze Boulevard, which measures 18,8732 square feet.
JAWOF 515 Seabreeze LLC, the owner of the parking lot, has not filed for bankruptcy.
Jeffrey C. Schneider, a Miami attorney, filed a motion to intervene in the foreclosure suit on behalf of Chinese investors who provided financing for the Las Olas Ocean Resort development.
The Chinese investors provided the financing through the EB-5 visa program, which permits foreign nationals to apply for permanent residency in the United States by investing at least $500,000 in an employment-generating project.
Schnieder said in his motion that his Chinese clients could lose their eligibility for permanent U.S. residency if 550 Seabreeze fails to finish construction of Las Olas Ocean Resort, sells the development or surrenders ownership due to foreclosure.
Source Info: The Real Deal South Miami