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Foreclosure notice served on Holiday Isle(The Reporter Via Acquire Media NewsEdge) Feb. 6--Holiday Isle Resort and Marina, a major hotel resort in Islamorada, is in foreclosure after lenders filed to recover $77 million loaned on an aborted condotel conversion. VII Holiday Isle Funding LLC, a subsidiary of Connecticut-based Starwood Capital Group, filed against several companies affiliated with West Palm Beach developer Adam Schlesinger, and his company, Ceebraid Signal. It's unclear how the filing will impact operations at the property, located at mile marker 84.5. But news of the legal action brought reaction from Islamorada's Mayor Cathi Hill. "In conjunction with the events at Cheeca, this could not have come at a worse time," Hill said. A New Year's eve fire closed down Cheeca Resort and Islamorada officials and business leaders are still are unsure when the tony oceanfront resort will reopen. Holiday Isle is also well-know for its charter boat row, where deep sea fishing boats line up for guests drawn from Holiday Isle and other resort properties throughout the Upper Keys. Charter captains, already on edge over an uncertain future for the resort and marina, talked Friday about their concerns with a weak economy and fewer people willing to shell out hundreds of dollars for a day of fishing. "I don't know what our future is right now," said Capt. J.R. Rudzin of the Captain JR charter boat. Ceebraid paid $98 million for Holiday Isle in 2006 with plans to raze the famous party spot and its numerous onsite bars and erect an ancient-Greek-themed, 151-unit ultra-luxury resort called Ocanos. Starting prices were advertised at $1.2 million for a one-bedroom unit. That was in March 2007 and within months of buying the oceanfront property at mile marker 84.5, Schlesinger issued a press release saying 25 percent of the units were under contract to be sold. But under Florida law, buyers have 15 days to back out of pre-sale contracts, and that's exactly what most of Ocanos' initial investors did. Schlesinger, who, along with other Holiday Isle representatives, did not return phone calls for this report, moved on to plan B. In April 2007, he announced plans to knock down Holiday Isle and replace it with a "five-star" hotel. That never happened either and on Jan. 28 a company that lent money for Ocanos to Schlesinger, his partners and up to six limited-liability corporations filed the foreclosure notice. VII Holiday Isle Funding, LLC, is the plaintiff in the foreclosure filing. It's a subsidiary of the global investment firm Starwood Capital. James Robinson, the plaintiff's attorney, said he isn't authorized by his client to comment on the case. It's not clear how many people work at the Holiday Isle complex on Windley Key, but the resort's bars, restaurants and hotels form a major business hub in the village of Islamorada. Capt. Rudzin has been renting a slip at the marina for 11 years. He pays about $875 a month, which he says is a good price, and a rate he's not sure he'll be offered if he has to move to another marina. "I don't know where we turn from here," Rudzin said. Mayor Hill said she remains optimistic someone else may come along when the economy gets better to not only preserve the resort, which is said to have originated the iconic Rum Runner cocktail, but also to improve it. "Economic conditions are cyclical, and I have no doubt Holiday Isle and Cheeca will come back better than ever," Hill said. When Schlesinger first announced his plans for Ocanos, condotels were the hot real estate investment. The concept was that resort hotels would sell condominium units, purchased by investors, and then rent those out to paying guests. The hotel management company and the investor owners would share the rental income. In the Keys, many landmark properties were sold to deep-pocket developers who hoped to redevelop dated hotels and motels into condotels. One of the most ambitious projects targeted Holiday Isle, and the $98 million paid set a record at the time. The foreclosure notice lists VII Holiday Isle Funding as owed "$77 million in principal and other sums due, plus accrued interest, reasonable attorney fees, costs and other expenses." To see more of The Reporter or to subscribe to the newspaper, go to http://www.keysnet.com/. Copyright (c) 2009, The Reporter, Tavernier, Fla. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |