Once a local powerhouse, Dan Catalfumo’s construction empire is toppling.
Banks are breathing down Catalfumo’s neck, a consequence of the real estate recession: His holdings have been slammed in the past two years by lender suits seeking $100 million-plus, several of them naming the high-flying multimillionaire builder personally.
Longtime employees have left, and sources close to the developer say the company is down to fewer than 50 full-time workers, a far cry from the reported 300-worker, $300 million enterprise of a few years ago.
Catalfumo is hardly the only local builder to stumble over a tanking real estate market. But he was among the biggest in South Florida, and he is almost certainly the most controversial. With his rags-to-riches success story, his well-known penchant for lawsuits and sometimes lurid court battles with ex-girlfriends, Catalfumo always has cut a larger-than-life profile.
“You rise hard and fast, you fall hard and fast,” said one industry observer. Still, he added, ” it’s kind of amazing” that Catalfumo has dropped off the industry radar so quickly.
Catalfumo is launching new ventures, but they are far removed from building: a chicken de-boning business – EZ Wings – and a recreational scooter business with his children that faces a 54-page lawsuit.
Efforts to reinvent himself come as he faces other symptoms of financial stress. Catalfumo returned his Viking yacht to a lender. The Daniel S. Catalfumo Family Foundation, which received more than a $200,000 contribution from Catalfumo-related enterprises in 2007 and 2008, received $19,880 in 2009 contributions.
The Paragon Foundation, a local economic development nonprofit to which a Catalfumo company pledged $250,000, says it has not received any money. “The reason they have given is they don’t have the money,” said a lawyer for the group.
Catalfumo, meanwhile, is building a lakeside home near Greenville, S.C., but said he has no intention of leaving Palm Beach County – or getting out of the local construction business. “Building is in my blood,” he wrote, “and it is my passion to build things and when the market returns to health I fully expect to be involved as I have been in the past.”
Interestingly, despite his sprawling construction and development interests, records show he’s never been a state-licensed general contractor.
That didn’t bar him from plum building deals. West Palm Beach’s new city hall, library and waterfront; Legacy Place in Palm Beach Gardens; the Port of Palm Beach cruise terminal; a Palm Beach County government building at Vista Center: All made it into the portfolio of Catalfumo companies.
The real coup came in 1999, when Catalfumo spent an estimated $41 million for 231 acres of prime undeveloped land owned by the John D. and Catherine T. MacArthur Foundation. That includes high-profile acreage at PGA Boulevard and Interstate 95 near The Gardens Mall, some of it now home to Catalfumo headquarters, and chunks of it involved in lender lawsuits.
But if the deals fell smoothly into place, business relationships haven’t always followed suit.
Take Stephen Fisher. In 2001, Fisher sold his Fisher-Clark Construction to Catalfumo Construction & Development. Fisher, named Catalfumo’s senior vice president, eventually left. Catalfumo responded by filing five lawsuits against him. At one point, Catalfumo Construction filed a legal action seeking to make sure four construction companies and four men – three of them former Catalfumo employees – never received any kind of work on Catalfumo’s prime northern properties, even if Catalfumo sold the land.
Then there were the girlfriends.
In 1997, he sued Barbie Catalfumo, whom he would later marry, for the return of a 5.3-carat diamond engagement ring. He was arrested following a fight with her; misdemeanor battery charges were dropped. He later sued ex-fiancée Franchezka Niewiadomski for the return of a $22,000 engagement ring. She returned it. Another girlfriend accused him of beating her; no charges were filed. In 2001, he sued Sandy McKenzie for the return of a $95,000 engagement ring. He won that ring back, too.
In 2003, he was arrested in an alleged fight with then-fiancée Heather Hill. Catalfumo said Hill fell into a picture frame. He was acquitted on aggravated battery and felony battery charges. Hill, who needed 53 stitches and five scalp staples, dropped a civil lawsuit against her former fiancé following a sealed settlement deal.
All of that was behind him by July 2009, when the legal focus started turning to loans.
Today, even by slumping commercial real estate standards, the crop of lender lawsuits is breathtaking: a $30 million Bank of America-filed foreclosure on one side of PGA Boulevard; a $32.5 million Seacoast National Bank judgment and foreclosure on the opposite side of the street; $48.5 million sought by BankAtlantic in four suits; another $8.7 million sought by Iberiabank. The seven lawsuits name Catalfumo individually, putting his personal assets at risk.
And he does have assets, according to court records: boats; two convertible Mercedes-Benzes worth $133,000; two Harley-Davidson motorcycles ; part interest in a jet. His five-bedroom waterfront home is valued at more than $3.8 million. But that pales compared with the millions being sought by banks from Stuart to Louisiana.
Seacoast has pursued him into every nook and cranny of his finances to satisfy its judgment, including looking for assets that could be tucked away overseas, a notion the bank emphasizes in italics and boldface lettering on its court documents. The search extends to retirement funds and information on credit card statements, canceled checks and financial dealings of intertwined corporations and partnerships.
Perhaps most important to creditors, Catalfumo has land: Corporations linked to him own those two MacArthur parcels on both sides of the highly visible intersection of PGA and I-95 in Palm Beach Gardens. Seacoast moved to seize a portion of the land by filing a foreclosure.
But Catalfumo may come out from under the $32.5 million judgment: Florida Power & Light has bought most of the undeveloped parcel once owned by Catalfumo’s PGA North II of Florida for $24 million, just shy of Seacoast’s original $25 million loan. Seacoast National Bank President Jean Strickland declined to comment on whether the bank will pursue Catalfumo for the remainder of the judgment.
Another come-from-behind deal is believed to have netted Catalfumo $25 million: last year’s bulk sale of unsold luxury condos at 2700 N. Ocean Blvd. in Riviera Beach, twin resort towers developed and built by Catalfumo.
Given the upscale condos’ sluggish sales, that would seem to be a real estate coup. But he might have received much more early on. That’s because pre-construction, during the real estate boom, developers were interested in buying the property as soon as a resort condominium was permitted. By some estimates, that would have put $50 million or more into Catalfumo’s pocket.
Catalfumo went his own way, though, sources said, determined to develop the building himself and sell condos in what was a white-hot condo market. He poured tens of millions of his own money into the luxury development, the sources said.
The result was a stunningly beautiful building on the Singer Island oceanfront – and by 2007, when the market stalled, lawsuits to recoup deposits as prospective buyers tried to walk away from their purchases and new buyers failed to materialize. It was a $100 million blow.
“The 160-plus buyers turned into over 100 defaulting buyer lawsuits instead of closings for in excess of $100 million,” Catalfumo told The Post.
Despite the slew of troubles, few are counting Catalfumo out. “I don’t think anybody really cares ” about the cluster of lender lawsuits, said Neil Merin, chairman of the West Palm Beach commercial real estate investment firm Merin Hunter Codman Inc. “We just know this is how Dan does business. When times are good, he’s here ; when times are bad, he’s gone.”
And Catalfumo has come from behind before. He managed his way out from under a cluster of foreclosures in 1998. He has a $10 million county library contract. A deal with BankAtlantic may be in the offing. And he has his attitude: Fresh from a 2001 lawsuit victory, Catalfumo once exulted, “I always win.”
Source: Palm Beach Post
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