Miami Merchandise Mart Enters Foreclosure Auction

Most of the Miami Merchandise Mart, South Florida’s largest wholesale trading center, is slated for foreclosure auction over a $15.7 million judgment.
The beleaguered property has been facing foreclosure proceedings since 2009 when Miami-based Republic Federal Bank filed a lawsuit against South Florida Hotel and managing member Georgi Zaczac. The case stalled after the bank failed. Cayman Islands-based Banif Finance, which was a participant in the mortgage, then bought out the rest of the loan from the Federal Deposit Insurance Corp. However, bankruptcy filings by both the property owner and Zaczac further slowed the proceedings.
NAI Miami President Jeremy Larkin got involved in the Miami Merchandise Mart’s problems back in 2009 and has been the receiver on behalf of its condominium association for several years.
Larkin said he asked Banif to move forward on the foreclosure lawsuit but it refused to take any action because it didn’t want to start paying association fees. The property also has delinquent property taxes backed up through the year the foreclosure started, according to county records. The foreclosure will not wipe away the tax liens.
“I never thought it would take this long,” Larkin said. “I want a well-capitalized group to come in, take the asset and start helping to turn the mart around.”
Larkin had the association petition the bankruptcy court to purchase the stock of South Florida Hotel in order to get control of the borrower. That allowed him to secure the foreclosure judgment uncontested.
“There are 75 third parties [tenants] here plus their employees plus their families who are relying on this for their livelihood and you can’t just sit here and not do anything and let them lose everything,” Larkin said. “That’s why I took control of the developer’s units so we can foreclosure and give it to someone who does care.”
The online foreclosure auction concerns a mortgage with $7.4 million in principal outstanding, plus interest, that covers 268 booths in the trading center at 777 N.W. 72ndAvenue. That represents about 70 percent of its booths and they are 25 to 30 percent occupied, Larkin said.
“I’m forcing the bank to take it or to give it to someone who will take it and do something with it,” Larkin said. “The bank said they wouldn’t bid on it. The association can bid on it with a deposit in case no one else bids.”
Banif previously foreclosed on the parking lot across the street that was also owned by South Florida Hotel. Larkin said Banif has closed off that parking lot, which poses a problem for the Merchandise Mart because that parking space is required under its site plan with the county. There’s also litigation between the Merchandise Mart and the New York-based owner of the attached Doubletree Hotel and Miami Airport Convention Center that must be resolved, Larkin said.
“This is for a sophisticated investor who has deep pockets and can grind it out,” Larkin said. “It’s a five- to 10-year plan you’ve got to execute but if you do, you can be successful.”
 
Source:  SFBJ
 

 

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