Buyers hope Boca Raton project takes on new life
Construction picks up on Mandarin Oriental hotel
The developer of the Mandarin Oriental hotel and condominium in Boca Raton recently closed on a $302.5 million loan, marking another milestone for the unfinished project.
Does this mean the downtown complex, under construction for years, is on its way toward completion?
Buyers said they hope so.
More workers have been on site than they've ever seen, up to about 40 people at times, one buyer said. And windows on the 12-story condo and hotel building shells also are being installed at a more rapid clip.
But an accurate finish date still is anyone's guess.
Buyers said they've been told late 2024 or early 2025, even though in June, a top official at the project's developer, Penn-Florida Companies of Boca Raton, said the project was “in the homestretch” and set for completion by year-end, despite having few windows installed.
Recently, Penn-Florida backed away from its rosy December completion date. The company acknowledged that completion won't happen until an unspecified time next year.
Buyers hopeful and wary at the same time
Restless buyers said they're pleased to see the progress, but they remain wary about the project. This is especially the case because concerns about the building's glacial construction progress were pooh-poohed by development officials in the past.
“Trust but verify,” one buyer said. “We're not taking anything at face value.”
The $302.5 million loan by Madison Capital Partners is a refinance of a $225 million loan made in 2019 to Penn-Florida.
It comes after Penn-Florida President Mark Gensheimer said in court documents that a long-running lawsuit with a partner had made raising capital to complete the project “a struggle.”
The lawsuit was settled a year ago, but the settlement would not be finalized until the completion of an unspecified transaction this summer, court records said. Buyers of the Mandarin
Oriental condo tower said they believe this transaction is the Madison Capital refinance, although the lawsuit still remains open. It’s not clear why.
When asked if the Madison Capital loan provides enough money to complete the project, or if Penn-Florida needed to tap another lender for additional construction financing, a Penn-Florida spokesman simply replied: “We are well-capitalized.”
The refinance comes after The Palm Beach Post reported in June that Penn-Florida has been mired in yearslong litigation with a partner, and that legal battle was an impediment to obtaining financing from outside sources, court records show.
In an interview that month, David Warne, Penn-Florida’s chief operating officer, wouldn’t comment on the lawsuit, which remains pending. But in that interview, Warne blamed the pandemic, supply-chain delays and the project’s complexity for the slow pace of construction.
The long-running lawsuit in Palm Beach County Circuit Court blamed other factors: the Great Recession in the late 2000s, a management dispute that dried up investment by one investor and the lawsuit itself, which scared off potential lenders.
Bold plans for Boca Raton’s once-sleepy downtown
In 2015, Penn-Florida’s Gensheimer announced plans for a mixed-use complex known as Via Mizner, which he called a “five-star urban resort.”
The property is at a key location at the northeast corner of Federal Highway and Camino Real in the heart of Boca’s downtown.
Via Mizner would consist of a luxury apartment complex, the boutique Mandarin Oriental hotel and the Mandarin Oriental Residences, a rare condo branding for the global hotel company.
At the time, the site was slated to be only the ninth Mandarin Oriental Residence in the world. Today, there are 21 built or planned.
In June, Warne said the 85 condo units are “substantially” sold out, with prices ranging from $2 million to about $23 million.
The prospect of the luxury Mandarin Oriental in the heart of downtown Boca Raton was, and still is, a big win for the city.
The 162-suite hotel will feature two rooftop pools, a rooftop restaurant, a spa and a private club for members and condo residents.
At first, the entire Via Mizner project was slated to be completed in 2017. Then the timeline moved to 2018, then 2019, 2020 and 2021.
The 366-unit apartment building, known as 101 Via Mizner, was finished in 2016. But work on the Mandarin Oriental condo and hotel buildings didn’t begin until 2019, after a redo of the plans was approved by city officials.
Today, the partly built complex remains an unfinished eyesore eight years after the $1.5 billion project was initially announced in 2015, and four years after construction began on the hotel and condo towers.
During the past several years, construction has been on and off at the site.
A Penn-Florida spokesman said a redesign of the rooftop pool and amenity decks at the hotel and condo towers are the reason for the delay in completion this year.
“This redesign warranted structural modifications which are just now being completed. While these components were being modified, construction efforts were redirected towards progress on the project’s interior work,” spokesman Chuck Smith said.
Alexandra Clough is a business writer and columnist at The Palm Beach Post. You can reach her at aclough@pbpost.com. Twitter: @acloughpbp.
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