Witkoff and Len Blavatnik’s Access Real Estate have taken over ownership of the troubled Banyan Cay Resort & Golf Club project in West Palm Beach, and landed a $75 million loan from the seller.
Three entities managed by New York and Miami-Beach-based Witkoff’s co-CEOs Steve and Alex Witkoff obtained the mortgage from an affiliate of Los Angeles-based Calmwater Capital, records show. The entities, previously managed by Calmwater, now own the 200-acre mixed-use development site at 200 Banyan Way.
In August, Calmwater took title of the assemblage after winning an auction in West Palm Beach federal bankruptcy court. Calmwater won based on a $96.9 million credit bid that represented the debt the previous developer owed its affiliate, which was the largest creditor in the Banyan Cay bankruptcy case.
This month, management of the three entities was transferred from Calmwater to the Witkoffs, corporate records show. The deal was not recorded via a public deed that requires a buyer to pay documentary stamp taxes. Witkoff and Access, a New York-based real estate investment firm, paid about $100 million, according to a source familiar with the deal.
Calmwater managing principal Larry Grantham declined comment about his dealings with Witkoff. And Witkoff executives did not respond to requests for comment about their plans for Banyan Cay.
Witkoff had reportedly been eyeing Banyan Cay before the bankruptcy when the previous developer, Domenic Gatto Jr., was seeking a buyer for the mixed-use project. Gatto Jr.’s development entities completed and opened a new golf course, and nearly finished a 150-room hotel. The project also included plans for a high-rise condominium, 33 single-family homes and 20 villas.
But under Gatto Jr.’s ownership, the project faced delays due to litigation from contractors alleging nonpayment of work and services at Banyan Cay. In 2022, Calmwater’s affiliate sued Gatto’s development entity for allegedly defaulting on a $61 million construction loan for the hotel. The same lender also provided a $19 million construction loan for the villas that was increased to $33 million.
Last year, the Calmwater affiliate won a $94.1 million foreclosure judgment in Palm Beach County Circuit Court. Shortly thereafter, Gatto Jr.’s Banyan Cay entities filed for Chapter 11 protection. Gatto Jr. is also dealing with an unrelated pending federal indictment charging him with conspiracy to commit health care fraud.
Over the summer, Denver-based Westside Investment Partners backed out of its stalking horse bid to buy Banyan Cay for $102.1 million.