Harvey Hernandez’s condo company files for bankruptcy to stave off foreclosure
Lender PS Funding won $3.1M foreclosure judgment against Centro NGD Holdings
Facing the threat of a foreclosure auction, Harvey Hernandez’s condo company filed for bankruptcy protection to save nine units at Centro Miami, a downtown Miami tower the developer built.
Last month, Centro NGD Holdings submitted a Chapter 11 bankruptcy petition in Miami Federal Bankruptcy Court, two days before the nine units were scheduled to be sold at a Feb. 8 auction. In January, lender PS Funding won a $3.1 million judgment in Miami-Dade Circuit Court against Centro NGD, two years after suing Hernandez’s company for allegedly defaulting on a $2 million mortgage. The bankruptcy filing put the sale on hold.
Hernandez did not respond to a phone message and an email requesting comment. Catherine Kretzschmar, an attorney representing Centro NGD in bankruptcy court, declined comment.
Hernandez’s other company, Newgard Development Group, developed Centro Miami, a 37-story, 352-unit condo building at 151 Southeast First Street. The building doesn’t have an attached parking garage. Centro NGD bought the nine units as investment properties available for rent.
According to Centro NGD’s bankruptcy filings, four of the nine condo units are currently leased and generate a combined $9,725 a month in rent. The nine units pay a combined $6,373 a month in combined condo association fees, the filings show.
Centro NGD filed for Chapter 11 to “maximize the value of Centro’s units through a structured sale process negotiated with Centro’s secured and unsecured creditors,” a case summary states. “Centro also seeks to explore the increased rental value of Centro’s units in the context of maximizing the recovery to all creditors.”
According to the bankruptcy petition, PS Funding is Centro NGD’s largest creditor. The company’s other debts include $142,393 to Newgard Development Group, $110,000 to Hernandez personally, $165,600 in property taxes and $74,874 to the Centro Downtown Condominium Association, the bankruptcy filings show.
Miami-based Hernandez and his companies have faced several legal battles in recent years, including lawsuits involving home-sharing platform Airbnb. In January, a Miami-Dade judge ordered his firm NGD Homesharing to pay minority partner Cindy Diffenderfer a $963,000 judgment. According to the ruling, NGD Homesharing failed to pay her more than half of a $1.05 million settlement stemming from a lawsuit she had filed against the company.
Hernandez’s legal troubles have not stopped him from launching new projects. In September, an affiliate of Newgard paid $50.5 million for a riverfront site near Miami’s Brickell City Centre, where Hernandez plans to build a three-tower residential and marina project.