The Mandarin Oriental hotel and condominiums on Aug. 31. Not much has changed in its exterior appearance in the past two years. The attorney for the developer says the condo units continue to attract buyers. Jerry Lower/The Coastal Star
By Mary Hladky
As the completion date for the Mandarin Oriental luxury condos and hotel in Boca Raton continues to be pushed back, four couples and an individual who placed deposits on units have filed lawsuits seeking the return of their money.
Developer Penn-Florida Companies either did not respond to their requests for reimbursement, refused to return the money or said they were not entitled to get it, according to five complaints filed over the past two months in Palm Beach County Circuit Court. Two of the complaints have been settled.
Penn-Florida announced it would build a 164-room Mandarin Oriental hotel and 85 branded residences in 2015, saying the project would be completed in 2017. Since then, the completion date has been delayed five times and now is slated for the end of 2025.
Boca Raton officials and residents initially were thrilled that Mandarin Oriental, renowned for its elegance and sophistication and operating in cities such as Paris, London and Geneva, would come to their mid-size city.
But construction has proceeded at a snail’s pace, with seemingly little progress made in the last year even as rumors swirled about reasons for the delay. Many residents regard the unfinished buildings just north of the intersection of Camino Real and Federal Highway as an eyesore.
“In fact, as of the date of this complaint, the entire structure of the (Mandarin Oriental) condominium is still just a few steps beyond a concrete shell and a closing is far off into the future,” several of the lawsuits state.
All along, Penn-Florida officials have insisted nothing is amiss. Speaking to The Coastal Star in 2023, Penn-Florida Chief Operating Officer David Warne said the COVID-19 pandemic did cause some disruption, but completion was only a few months behind schedule. Company officials also have said they have adequate financing.
Suits seek deposit refunds
Michael and Elyse Filon of Highland Beach filed suit on July 8 to recoup $697,500 in deposit money. They subsequently resolved the matter and voluntarily dismissed their suit on July 31.
Trisha and Michael Polk, also of Highland Beach, filed suit on July 29 to get back nearly $2.3 million in deposit money. They voluntarily dismissed their case on Aug. 19.
Attorneys for both couples did not provide specifics on how much compensation they received. Adrian Alvarez, who represented the Polks, said the settlement agreement was confidential.
Three cases remained open as of Aug. 29:
• Frank and Nancy Scala, now renting an apartment in Boca Raton, placed deposits totaling nearly $1.3 million and sued on Aug. 13.
• Robert and Brenda Needleman of Boca Raton filed suit on Aug. 22 to recoup nearly $1.8 million.
• Erinn Starcher, who placed deposits on two units totaling over $1.3 million, sued on Aug. 23.
More lawsuits may be in the offing.
James Ferrara, a former Palm Beach County Circuit Court judge who represented the Filons and continues to represent the Scalas, said he has additional clients who are attempting to get their money back. If that fails, he anticipated litigation.
After speaking with The Coastal Star on Aug. 16, he filed suit on behalf of the Needlemans and Starcher.
The defendant in each of the cases is Via Mizner Owner III LLC, which is Penn-Florida’s project name for the condo building.
Penn-Florida said in a statement that it cannot comment on pending litigation, but the company honored the terms of purchase agreements.
“The overwhelming majority of our future Residents are excited to be a part of this exceptional development,” the statement said. “However, we understand that, over time, circumstances may change for a small percentage of Residents. In such cases, we will continue to not only honor our agreements, but endeavor to be as flexible as possible in accommodating their needs, just as we have done thus far.”
Scale of complaints unclear
Because of its stance that it can’t comment on pending litigation, the company did not answer questions such as whether it had fully reimbursed buyers who had voluntarily dismissed their cases and how many other buyers have requested and received reimbursement without resorting to litigation.
Ferrara and Alvarez said they did not know how many other would-be owners sought and received reimbursement without filing suit.
But Ferrara has heard that other people did get their money back.
“I have been told through the grapevine it is very haphazard as far as who gets their money back. There was a couple that just got $2 million back yesterday,” he said on Aug. 16. “Their situation is no different” than that of the Scalas.
“Certain people get their funds back and others don’t,” he said. “That seems a little unfair.”
The lawsuits state that the purchase agreements the buyers signed specify that their units “shall be” completed and delivered within three years after the estimated completion date.
Failure to do so would place Penn-Florida in default of the agreements. The deadlines had passed before the lawsuits were filed.
The Filons signed a purchase agreement in 2018, with an estimated completion date in November 2020. The Scalas signed in April 2021 with an estimated completion date that June. The Polks signed in March 2021 with an estimated completion date that June.
The Needlemans signed a purchase agreement in August 2019 with the unit to be completed in June 2021. Starcher signed purchase agreements in June and September 2020 with completion dates in June 2021.
When Penn-Florida’s closing deadline passed for the Scalas on June 30, Ferrara sent a demand letter to Penn-Florida’s attorney. After getting no response, he asked when the money would be forthcoming.
In an email, that lawyer said, “We spoke to the client. They do not agree the buyer is entitled to the return of his deposits and are prepared to contest any legal action.” Ferrara asked the legal basis for that decision. When two weeks passed without a response, the Scalas authorized Ferrara to file the lawsuit, he said.
Anticipating they would be moving, the Scalas had sold their home and moved into a two-bedroom rental near the Mandarin Oriental project site. They can’t buy somewhere else without getting their deposits back, Ferrara said.
In the Polks’ case, their closing also was to take place no later than June 30. Their closing attorney made inquiries about getting the money back, but did not get a response. So litigator Alvarez took over, sending two demand letters on June 17 and July 1 asking for the money but also hearing nothing.
“We were left with no other option but to file a lawsuit,” Alvarez said. “My clients are simply enforcing their contract rights because they are no longer willing to wait.”
But it’s not just the long wait time, he said. “They had no idea when (the condo building) was going to be done.”
Company ‘confident’
Partially addressing why the condo building is taking so long to complete, Penn-Florida’s statement cited the complexity of the very large project encompassing more than 2 million square feet and “a variety of outside influences since COVID.”
Boca Raton attorney Robert Sweetapple, who represents Penn-Florida, said a clause in the purchase contracts allows for project completion delays that result from bad weather and difficulty getting construction materials such as cement and windows.
The pandemic caused supply disruptions and the huge size of the project necessitated more materials than suppliers could provide, he said.
If the case goes to trial, “our expert will establish June 30 was not the contract closing date,” he said, adding that he is “very confident” Penn-Florida will prevail in court.
The project continues to attract buyers, he said. For those who no longer want to complete their purchase, “the irony is these units are going to sell now for more” than the original purchase price.
“We have had limited requests to back out on the contract,” Sweetapple said.
Litigation against Penn-Florida is not limited to would-be condo owners.
In its Aug. 13 lawsuit, Areda Construction of Miami Lakes said it had not been paid $1.8 million for concrete work it started in 2021 and finished in 2023 on the Mandarin Oriental hotel building.
Strategic Group Builders of Miami, which was engaged to provide construction management services for the hotel and the condo building, filed its lawsuit on Aug. 23. The company said it has not been paid nearly $1.7 million for its work.
Both of those lawsuits were voluntarily dismissed on Aug. 29.
Alex Barthet, the Miami attorney representing Areda, said the company and Penn-Florida had reached an agreement “that is satisfactory to both sides.”
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