Faced with the loss of their project to a foreclosure auction, the developers of the Artecity project on South Beach have filed for
bankruptcy. Seven entities related to the project made filings
in bankruptcy court Tuesday, with liabilities ranging from $10
million to $50 million. The filings were made in an effort to stop the
foreclosure lawsuit filed in March by Corus Construction Venture, which
is a partnership between the FDIC and Starwood Capital Group. Artecity was intended as
a 202-unit project, divided between a new building and a renovation of
the Governor Hotel. Of the 60 completed units, 41 have been sold, but
just one of those has sold since the beginning of 2009. [SFBJ]

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The sprawling, overextended empire of Corus Bancshares loans, many of
them in Florida, is attracting interest from major distressed debt
investors. Thomas Barrack, who first made his fortune in the aftermath
of the savings and loan crisis; Barry Sternlicht, the man behind the
Starwood empire; Jay Sugarman of iStar Financial, the public real
estate giant; and New York developer Stephen Ross, sometimes called the
King of Columbus Circle, in league with Lubert-Adler, a big property
investor in Philadelphia, are all mentioned as possible buyers of these
troubled loans and tattered projects. Early this year, federal
regulators ordered Corus to raise capital or put itself up for sale. It
was unable to do either. In late June, the bank reported that its
entire capital base had been wiped out. Auditors Ernst & Young have
walked away, and the stock faces delisting from the Nasdaq exchange. [more]