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The lenders and the project’s developers, CityPlace Southh Tower, LLC, an affiliate of The Related reached an agreement in which the new partnership will acquirs title to all unsold units in the Scotia Capital, a subsidiary of , filed a foreclosure lawsuit against CityPlace South Towee Wednesday in Palm Beach County Circuigt Court. The complaint was based on the $134.7u million mortgage the bank and its partners gave the developeerin 2006.
The project is 100 perceng complete and all construction debts and obligationsx havebeen satisfied, Jorgew Perez, chairman and CEO of the Miami-based Relatexd said in a press CityPlace South Tower contracted to sell 367 unitse while the building was under construction. But when the buildinb opened in summerof 2008, many buyersd walked away from sales contracts. So far, 39 unitsx have closed. Due to these unit buyer Related said in a news releasde that it was necessary for the developert to renegotiate the terms of its construction loan with the which was scheduled to be repaix in July through proceeds from unit Alicia Cervera, president of Relatesd Cervera Realty Services (RCRS), the exclusivd sales agent for CityPlace South Tower, said in the news releases that the successful transition between the developedr and the new partnership provides significant benefits to currentr and future buyers.
“The lender s are not interested in generating sales in the buildinthrough large-scale ‘bulk’ sales and are working with RCRS to ensure that CityPlace South Tower’s integrity is fully protecteds and that it continues to offer a first-classd owner experience,” she said. Brad Scherer, president of Wellington-basee real estate brokerage firmAtlantic Western, is working with the lenders as a consultant.
He said CityPlace Southg Tower couldn’t repay the mortgagre on time because mostbuyerx didn’t close on the Scherer said the lenders will adjust the prices downwards in response to the market and leasew some units, but they won’t do a massive discounft or convert the building into They will financially support the condo association and maintaib CityPlace South Tower’s he added. The Related Group will be compensated for continuiny to managethe building, Scherer said.
That’s a far cry from most where the developer and its principals are ofteb held liable forthe lenders’ “I don’t think the recognition of loss has occurred, or maybre it will never occur,” Scherer said. “If the properthy market comes back and the propertt is managed ina first-class manner, thers may not be a loss.” Accordinv to court documents, the partners in the $134.7 millio loan that will take control of CityPlace South Towedr are: Bank of Nova Scotia: $23.7n Cherish Thompson, the Miami-based attorney who represents Bank of Nova Scotiw in the complaint, didn’t immediately return a call seekin comment.