A lender that financed construction of a Hollywood condo-hotel in Hollywood filed a foreclosure lawsuit against the developer claiming $40.06 million of delinquent debt.
Madison Realty Capital loaned $70 million to the developer in 2016 to finance construction of Costa Hollywood Beach Resort at 777 North Ocean Drive in Hollywood, which opened last October.
An affiliate of Madison Realty called 777 N. Ocean Drive LLC filed a foreclosure lawsuit against the developer of Costa Hollywood to seize 52 unsold units and the common area of the condo-hotel.
In its lawsuit, the lender also requests that a court-appointed receiver take over the management of Costa Hollywood, now managed by Evolution Hospitality.
Madison Realty is not trying to seize 274 units sold by the developer since November 2017. The last sale of a Costa Hollywood unit closed last December.
The defendants in the lawsuit include an entity called Costa Hollywood Property Owner and managing member Moses Bensusan, who also has served as loan guarantor.
Also named as defendants in the lawsuit are four general contractors that have filed pending construction liens on the hotel property.
According to the lawsuit, Costa Hollywood Property Owner defaulted on the loan from Madison Realty in April 2017, but the lender entered a forbearance agreement and extended the term of the loan.
Madison Realty claims that the developer defaulted again by failing to fully repay the $40.06 principal balance on the loan by its maturity date on Dec. 20, 2018. [South Florida Business Journal] – Mike Seemuth