The $17.5 million sale of a former Location Ventures development site in Miami Beach is moving ahead, but prospective condo buyers won’t be happy.
Proceeds from the sale will pay off a lender with a pending foreclosure complaint, but more than 30 investors under contract to buy co-living condo units in the abandoned project will collectively lose more than $10 million in deposits.
U.S. District Judge Jacqueline Becerra on Nov. 7 authorized Fort Lauderdale-based Pakman Miami Beach’s purchase of the unfinished project site at 1234 and 1260 Washington Avenue, court filings show. The company is led by Prakash Patel, Andrew Beachler and Richard Haestier.
Previously, now-defunct Location Ventures’ subsidiary, Urbin, planned a mixed-use project with 65 co-living condo units, but city of Miami Beach officials shut down construction last year due to unpermitted work.
Construction did not resume as Location Ventures’ imploded from an avalanche of lawsuits and investigations into company founder Rishi Kapoor. He recently agreed to settle a federal civil lawsuit by the U.S. Securities and Exchange Commission accusing him of defrauding more than 50 investors who placed $93 million in his failed real estate projects.
In September, receiver Bernice Lee requested permission to sell the property, primarily to pay off 1234 Washington Acquisition, an affiliate of Coral Gables-based Spectrum Mortgage Group. Lee was appointed in January to manage and sell off Location Ventures’ assets.
The Spectrum affiliate has a pending foreclosure complaint in Miami-Dade Circuit Court against the Location Ventures’ affiliate that owns the Miami Beach site. The lender agreed to accept $16.7 million of the $19.2 million mortgage owed by Location Ventures if the sale goes through.
The rest of the sale proceeds will pay $570,000 in delinquent property taxes, $125,000 in closing costs, $25,000 to Fisher Auction Co. for marketing the site, $15,000 for utilities and a fee for the receiver to be determined at a future hearing, Becerra’s order states.
As a result, no money would be left over for the condo buyers, as well as several contractors who had filed liens totaling more than $11 million for alleged unpaid work.
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