29 Million Dollar Pompano Beach Foreclosure

GSIG LLC

The site of the delayed Hilton hotel project in Pompano Beach has been targeted by a $28.5 million foreclosure lawsuit filed by Capital Source Finance.

According to Broward County Circuit Court Records, Maryland–based CapitalSource, Inc. (NYSE: CSE) filed the foreclosure action on January 14th, 2010 against Boca Raton-based Ocean Land Financing.

The executive VP of developer affiliate Ocean Land Investments, Mark Issenman, said his company is working with the lender to structure a new partnership to repurchase the land under different terms after they turn over the property.

Ocean Land has built major South Florida projects as the Trump Hollywood and Aquazul in Lauderdale-by-the-Sea. Conversely, several projects planned during the boom never got off the ground. The projects include: the legally blocked 300 Grove Bay condo project, in partnership with the Related Group of Florida, and a failed attempt to purchase and redevelop the entire town of Briny Breezes in Palm Beach County.

The Hilton project was one of those failed projects.

In 2007, with help from a $28.5 million mortgage from CapitalSource, Ocean Land bought the 5.9-acre site on S. Ocean Drive (A1A), for $31.9 million. The property is on both sides of A1A, with 200 feet along the beach and entitlements for a 28-slip marina along the Intracoastal Waterway. The loan was set to mature in October 2008.

With the loan set to mature in October of 2008, Ocean Land demolished a Ramada Inn in that location in 2008, and received zoning approval for a 10-story, 264-room Hilton hotel on the beach. The project’s second phase was an unnamed 317-room hotel with a 910-space parking garage along the Intracoastal.

Nothing was ever constructed.

Miami attorney Cary Lubetsky, who represents CapitalSource in the lawsuit, said Ocean Land has been cooperative in the process and appears willing to transfer the property to the lender. Lubetsky said he did not know what his client would do with the site.

“The economic conditions in South Florida don’t warrant us going forward with this project,” Issenman said. “Both parties are working together to make the foreclosure action as quick and simple as possible so we can go ahead with a purchase deal in the future.”