|By Doreen Hemlock, Sun Sentinel, Fort
Lauderdale, Fla.McClatchy-Tribune Regional News
March 15, 2012--The unfinished condo-hotel on Fort Lauderdale beach that was to carry the name of real estate mogul Donald J. Trump was sold Wednesday in a foreclosure auction.
The final price tag: $100 -- plus its $165.6 million debt.
The only bidder was the group that holds the property loan, Corus Construction Venture LLC. It bought the loan at a deep discount from a Chicago bank that failed during the real-estate slump.
Corus Construction asked for bids starting at $165.6 million, the full value of the foreclosure judgment.
But experts say it found no takers for two reasons: That price is too rich for the shuttered 24-story tower in today's real-estate market, and there are too many lawsuits pending to make it attractive to buy.
"To make it into a hotel at that (face value) price, you'd be paying more than $500,000 a room, And that would make for a very, very expensive hotel," said Mark Ellert, president of Fort Lauderdale-based real estate company IAG Florida.
Many developers now spend less than $200,000 per room for South Florida hotels. And Corus Construction won't spend $500,000 per room either, since it bought the property loan at a bargain sale, Ellert said.
A new buyer also would have faced pending lawsuits from buyers who made deposits on luxury condo-hotel units that they never received. A trial is set for October next year in Broward County for some of those cases, said attorney Joseph Altschul of Fort Lauderdale, who represents buyers of 52 units.
"It doesn't help draw bidders when you have the title clouded by so many claims," Altschul said.
The beach-side property at 551 N. Fort Lauderdale Beach Blvd. was first envisioned as the Trump International Hotel & Tower, a $200 million project that was supposed to bring cachet to Fort Lauderdale.
More than 100 people plunked down 20 percent deposits to reserve condos, with studios and one- and two-bedroom units priced from about $500,000 to more than $3 million each.
But developers, SB Associates, never finished the 298-unit project scheduled for completion in 2009. Trump distanced himself, saying the builders had failed to meet conditions to license the use of his name.
The bank that made the initial $139 million building loan, CorusBankshares of Chicago, failed in 2009. Federal authorities sold the loan and other assets to a new investor group, Corus Construction led by Starwood Capital.
Investors started their foreclosure action against developers in March 2010. It took two years to hold the auction, because lawyers needed time to try to reach all the buyers with lawsuits and because Broward courts were clogged with foreclosure cases, attorneys said.
The question now is what will happen to the 24-story tower on prime beach real estate.
Corus Construction has not finalized a plan, said the firm's Miami attorney David W. Trench of Bilzin Sumberg.
The company is unlikely to revive a condo-hotel, because buyers no longer can get loans easily for condo-hotel units after the 2008 financial crisis, Ellert said.
Two other options are more probable: upgrading to a traditional hotel or turning it into residences, now that Fort Lauderdale has changed zoning rules to allow beach condos, said Ellert.
Corus Construction will soon be able to start work on what has become an eyesore, said its lawyer Trench. "Everyone wants to get that building back in circulation, instead of having it sit there being boarded up."
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