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Palm House Hotel finally sells for $40M
The Palm Beach condo-hotel was previously engulfed in one of the biggest EB-5 frauds in South Florida
UPDATED May 17, 12:45 p.m.: The saga of one of the most troubled EB-5 projects in South Florida moves to a new chapter.
The Palm House Hotel at 160 Royal Palm Way in Palm Beach finally sold to a U.S. affiliate of the private real estate investment firm London + Regional Properties for $39.6 million.
The sale comes just weeks after the former developer of the property, Robert Matthews, pleaded guilty to money laundering and fraud charges over the luxury condo-hotel project. He is currently awaiting sentencing along with his wife Mia Matthews, who pleaded guilty to tax evasion.
The receiver of the 160 Royal Palm LLC, Carey Glickstein, sold the property, records show.
The sale of the property will result in about 80 investors and creditors – including the town of Palm Beach – receiving a substantial portion of the money they are owed through the bankruptcy court-ordered sale of the company’s primary asset, said Glickstein, court-appointed manager and former court-appointed receiver for 160 Royal Palm LLC, in a statement.
Marci H. Langley, a shareholder in the Boca Raton office of Greenberg Traurig, represented 160 Royal Palm LLC
The 54,038-square-foot hotel was built in 1961, but has been in disrepair and needs substantial improvements. It represents one of the few opportunities to bring a new hotel to the wealthy town of Palm Beach.
A bankruptcy judge previously approved the sale to London + Regional Properties in March. The London-based firm has almost $12 billion in assets, according to its website. It owns the 453-room London Hilton on Park Lane in London’s Mayfair neighborhood.
The judge declined to accept a last minute bid by Wellington developer Glenn Straub, whose lawyer said the developer was prepared to pay $40.6 million for the property. Related Companies also made a $32 million bid for the property in October.
The project first started soliciting EB-5 investment in 2012.
EB-5 is a federal program that allows investors to get a green card in exchange for investing at least $500,000 in a U.S. enterprise and creating at least 10 jobs. The development group was able to solicit more than $40 million of EB-5 money for the Palm House development. Almost none of the money went into the project and instead was siphoned off by Matthews and the EB-5 regional center developer, Joseph Walsh, according to a complaint by the Securities and Exchange Commission. Some of the money also went to pay for Matthews’ 151-foot yacht named Alibi, federal prosecutors said.