By Mary Hladky
In yet another sign of trouble for the Mandarin Oriental project in downtown Boca Raton, affiliates of developer Penn-Florida Companies filed for Chapter 11 bankruptcy protection on Dec. 23 after they were unable to repay lenders about $210 million at loan maturity.
The affiliates, Via Mizner Owner II and Via Mizner Pledgor II, are building the 164-room Mandarin Oriental hotel on Federal Highway to the north of Camino Real.
The hotel and adjacent branded condo residences were to be completed in 2017. But construction has proceeded very slowly with long periods of no activity. Many Boca Raton residents complain that the construction site is an eyesore.
A summary of the bankruptcy case states that the Penn-Florida affiliates and secured lenders “seek to engage in a consensual chapter 11 process for the reorganization of their businesses and to protect the high market valuation of the property for the benefit of all parties of interest.”
They estimate the value of the building upon completion at more than $450 million.
They have asked to file the case under seal because public disclosure of certain information could chill interest in the property and could be used for negotiating leverage.
One year ago, another affiliate of Boca Raton-based Penn-Florida filed for Chapter 11 bankruptcy protection to head off an auction of its 101 Via Mizner luxury apartment building located immediately south of the condos and hotel.
Penn-Florida faced losing that 366-unit building because it failed to pay off a $195 million senior loan provided by an affiliate of Blackstone Mortgage Trust in 2022.
That problem was resolved in July when Cardone Real Estate Acquisitions — led by real estate investor and social media celebrity Grant Cardone — purchased the building for $235 million and creditors were repaid.
A number of would-be condo owners who had placed large deposits on units, and were tired of waiting for the building to be completed, have filed lawsuits seeking return of their money.
Contractors also have filed suits, claiming they had not been paid for completed work.
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