The bid­ding starts at $38.6 mil­lion

Po­ten­tial bid­der found for stalled Las Olas Ocean Re­sort project, cur­rently in bank­ruptcy.

Sun Sentinel Broward Edition - - Local - By David Lyons Staff writer David Lyons can be reached at 954-356-4340, dv­lyons@sun-sen­tinel.com twit­ter: @david­v­lyons

FORT LAUDERDALE — The stalled Las Olas Ocean Re­sort project across from Fort Lauderdale beach is close to be­ing auc­tioned off af­ter bank­ruptcy lawyers found an open­ing bid­der to kick off a sale.

An af­fil­i­ate of Magna Hospi­tal­ity Group has agreed to place the first bid at an auc­tion set for Aug. 15, said Glenn Moses, a bank­ruptcy at­tor­ney at the Mi­ami law firm of Gen­ovese Joblove & Bat­tista P.A., which rep­re­sents the de­vel­oper, 550 Seabreeze De­vel­op­ment LLC.

Based in War­wick, R.I., Magna is a pri­vately held ho­tel real es­tate in­vest­ment firm that fo­cuses on hospi­tal­ity in­vest­ment, de­vel­op­ment and man­age­ment. It owns or op­er­ates more than 20 ho­tels in the United States and Canada.

Seabreeze en­tered Ch. 11 bank­ruptcy pro­ceed­ings ear­lier this year af­ter its prin­ci­pal lender, Ban­corp Bank, filed a fore­clo­sure ac­tion al­leg­ing de­fault on an un­paid loan bal­ance of $36.9 mil­lion. In its bank­ruptcy fil­ing, the com­pany blamed Hur­ri­cane Irma for dam­ag­ing the project.

“Hur­ri­cane Irma had a sig­nif­i­cant im­pact on the project, which caused a good amount of de­lays and costs,” Moses said in an in­ter­view. “The bank com­menced a fore­clo­sure as a re­sult. We filed a Ch. 11 to stay the fore­clo­sure process so we can max­i­mize the value of the project.”

The high-rise project — which at 12 sto­ries is de­signed for 136 rooms, with a res­tau­rant and four-story park­ing garage — is 70 per­cent com­plete, ac­cord­ing to court pa­pers.

Since the bank­ruptcy fil­ing, Seabreeze re­ceived court au­tho­riza­tion to bor­row money to pre­serve the prop­erty pend­ing a sale.

“We’re pay­ing for the main­te­nance, se­cu­rity and gen­eral up­keep,” Moses said. “Ob­vi­ously, we are not con­tin­u­ing to build or de­velop.” He said the es­tate bor­rowed $560,000 to fund the prop­erty’s preser­va­tion and move for­ward with a sale.

He said Magna will start the bid­ding at $38.6 mil­lion. The next bid­der must of­fer a min­i­mum of $39.2 mil­lion. All bid­ders are re­quired to post a 5 per­cent de­posit and show they have the where­withal to pay.

Af­ter the auc­tion, 550 Seabreeze will ask U.S. Bank­ruptcy Judge Ray­mond B. Ray in Fort Lauderdale to ap­prove the sale at a hear­ing next month. Moses said he hopes the sale will raise as much money as pos­si­ble for cred­i­tors.

Moses said he has re­ceived in­quiries from a num­ber of in­ter­ested par­ties.

“You gen­er­ally can’t go wrong with it,” he said of the beach area prop­erty. “It cer­tainly is an op­por­tu­nity for the right de­vel­oper.”

“Hur­ri­cane Irma had a sig­nif­i­cant im­pact on the project, which caused a good amount of de­lays and costs. The bank com­menced a fore­clo­sure as a re­sult.”

Glenn Moses, bank­ruptcy at­tor­ney

DAVID LYONS/STAFF

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