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From: J [jeeyacation@gmail.com]
Sent: 10/12/2018 7:27:19 PM
To: Anthony
Subject: Re: Deal info
funn, but quite a mess
On Fri, Oct 12, 2018 at 2:55 PM A Barrett <
Hi jeffrey,
Cam across this...perhaps you have some interest?
I> wrote:
Related Companies affiliate bids $32M for
embattled Palm House Hotel
The New York company, led by Stephen Ross, made a stalking horse bid for the Palm
Beach condo-hotel project that is heading to auction
By Keith Larsen October 11, 2018 06:15PM
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Palm House Hotel, Related Companies Stephen Ross600
An affiliate of the Related Companies has emerged as the initial bidder for
the Palm House Hotel as the failed condo-hotel project heads to a
bankruptcy auction.
The stalking horse bidder, RREF II PALM HOUSE LLC, has the same
address as Related Companies in New York and is led by Related
Companies Managing Principal Justin Metz, according to a filing in U.S.
Bankruptcy Court. The company is offering $32 million for the property,
which will set the floor price for a bankruptcy auction scheduled for next
month. Bids at the auction will start at $32.5 million.
The 79-unit condo-hotel project on Palm Beach Island stalled in 2014 and
its former developer now faces allegations of fraud by the Securities and
Exchange Commission and a group of EB-5 investors. In August, the
property filed for bankruptcy under its court appointed receiver with
creditors claims totaling $115 million.
Cushman & Wakefield's Robert Given, Errol Blumer, Michael Mulkern and
Robert Kaplan are the exclusive marketing advisers for the property. The
auction is scheduled for 10 a.m. on November 16, 2018 in West Palm
Beach.
Given said he expects the property to sell for up to $40 million and it could
be the last opportunity for a developer to own a hotel in the wealthy enclave
of Palm Beach. He said the next owner will likely not redevelop the
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property. Instead, the best option would be to continue renovating the
existing project which could take more than a year to complete, Given said.
By auctioning the project through a bankruptcy sale, it will be offered free
and clear from any liens. The bankruptcy also means that the new owner
will not have any responsibility for the issues stemming from EB-5
investors who had invested in the property.
The 82,648-square-foot project was first developed in 1961 and expanded in
1981. The property was set to be renovated by a group led by developer
Robert Matthews.
Matthews then raised $44 million from EB-5 investors, according to a
complaint by the Securities and Exchange Commission. EB-5 is a federal
program that allows foreign investors the chance to gain a green card if they
invest at least $500,000 into certain projects that create at least 10 jobs.
The SEC's complaint said, however, that much of this money was
misallocated to pay for Matthews' personal expenses. Some of the funds
allegedly went to pay for Mathews' Connecticut home, his 151-foot mega
yacht, as well as to save his Palm Beach mansion from foreclosure,
according to the complaint.
In a separate lawsuit filed by a group of EB-5 investors, the development
group claimed that famous celebrities and politicians such as Bill Clinton,
Donald Trump, Celine Dion and Bill Koch — would serve on the Palm
House's advisory board when, in fact, they did not.
Related Companies, led by Miami Dolphins owner Stephen Ross,
developed CityPlace West Palm Beach. The company is also proposing to
build a 25-story office project called One Flagler in downtown West Palm
Beach.
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