Developer Pedro Martin and his son David hoped to acquire 120 acres of prime land in Doral by helping fund the landowner’s bankruptcy reorganization plan. But when their plan fell through, they will have to compete with other developers at a public auction to get the site.
U.S. Bankruptcy Judge Robert Mark in Miami on Thursday allowed the site’s largest creditor to hold a bankruptcy auction June 15 to recover some of the $111.8 million owed by debtor Town Center at Doral.
The creditor is the Landmark at Doral Community Development District, which issued bonds during the housing boom to fund the project’s infrastructure.
The failed development northeast of Northwest 107th Avenue and 58th Street was to include 1,109 homes, 230,000 square feet of light industrial space and 188,000 square feet of retail and office space. Town Center developer Elie Berdugo secured site plan approval for the project before he died in 2008, the same year the real estate and financial markets collapsed. Town Center never materialized, and the site was mostly abandoned.
The Martins were ready to bail Town Center out of bankruptcy in exchange for the land. But the district, together with Florida Prime Holdings, which owns the district bonds, persuaded Mark to allow a bankruptcy auction to open up the sale to all potential bidders.
The district will act as the stalking horse bidder with a bid starting at $67.5 million and will have a maximum credit bid of $79 million.
The auction will be held at the office of Arnstein & Lehr attorney Phillip Hudson III at 200 S. Biscayne Blvd., Suite 3600, Miami. He represents Florida Prime Holdings.
Pedro Martin’s Terra Landmark agreed to help pay Bilzin, Sumberg, Baena, Price & Axelrod attorney Mindy Mora’s fees on behalf of Town Center to fight off the district in court. But faced with some challenges, Terra agreed to the district’s auction in exchange for some benefits.
One of the challenges Terra faced was an accusation that the Martins failed to disclose a success fee they would pay a Town Center representative if Terra took control of the land. The deal between Town Center and Terra became the center of a motion to dismiss the case or convert it to Chapter 7 liquidation. But that won’t happen now. Town Center and Terra “looked at their position and approached us about six weeks ago to have a discussion that resulted in an agreement,” Hudson said after Thursday’s court hearing.
Terra will be allowed to participate in the auction and receive up to $500,000 from the district to cover administrative expenses that Terra funded on behalf of Town Center during the bankruptcy litigation, according to court documents. The district also agreed to withdraw its motion to convert the case to Chapter 7.
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