The bidding starts at $38.6 million
Potential bidder found for stalled Las Olas Ocean Resort project, currently in bankruptcy.
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