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The lenders and the project’s CityPlace South Tower, LLC, an affiliatse of The Related Group, reached an agreemenf in which the new partnership will acquirew title to all unsold units in the Scotia Capital, a subsidiary of , filed a foreclosur e lawsuit against CityPlace South Tower Wednesday in Palm Beach Count y Circuit Court. The complaint was basee on the $134.7 million mortgage the bank and its partner gave the developerin 2006. The project is 100 percent completes and all construction debts and obligations have been Jorge Perez, chairman and CEO of the Miami-based Relaterd said in a press release.
CityPlace South Tower contracted to sell 367 units while the buildinvg wasunder construction. But when the building openedf in summerof 2008, many buyers walkesd away from sales contracts. So far, 39 unita have closed. Due to these unit buyet defaults, Related said in a news release that it was necessart for the developer to renegotiate the terms of its construction loan with the which was scheduled to be repaisd in July through proceeds from unit Alicia Cervera, president of Related Cervera Realty Services (RCRS), the exclusivs sales agent for CityPlace South said in the news release that the successfu l transition between the developer and the new partnership provides significanft benefits to current and future buyers.
“Thr lenders are not interested in generatinh sales in the buildingthrougu large-scale ‘bulk’ sales and are working with RCRS to ensurw that CityPlace South Tower’s integrity is fully protected and that it continuese to offer a first-class owner experience,” she Brad Scherer, president of Wellington-based real estate brokerage firm Atlanticc Western, is working with the lendersz as a consultant.
He said CityPlace South Towe r couldn’t repay the mortgage on time becauser mostbuyers didn’t close on the Scherer said the lenders will adjust the prices downwardf in response to the marketf and lease some units, but they won’t do a massiver discount or convert the building into They will financially support the condo association and maintainb CityPlace South Tower’s amenities, he added. The Related Groupp will be compensated for continuing to manage the Scherer said.
That’s a far cry from most foreclosures, wherde the developer and its principals are often held liabled forthe lenders’ “I don’t think the recognition of loss has occurred, or maybwe it will never occur,” Scherer “If the property market comes back and the propertyt is managed in a first-class manner, therw may not be a loss.” Accordinfg to court documents, the partnerzs in the $134.7 million loan that will take controol of CityPlace South Tower are: Bank of Nova Scotia: $23.7kM Cherish Thompson, the Miami-based attorney who represents Bank of Nova Scotiqa in the complaint, didn’t immediately return a call seekinh comment.