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Terranova moves one step closer to acquiring Location Ventures’ former HQ
Judge approved settlement allowing foreclosure judgment of Coral Gables office building to move forward, as well as sale of Coconut Grove spec mansion
From left: Rishi Kapoor, Terranova’s Stephen Bittel and Torose Equities’ Scott Sherman along with 299 Alhambra Circle in Coral Gables (Getty, Location Ventures, Terranova, Torose Equities, Google Maps)
Stephen Bittel’s Terranova could soon own the former Coral Gables headquarters of Rishi Kapoor’s defunct Location Ventures.
On June 17, U.S. District Judge Jacqueline Becerra approved a settlement agreement in Terranova’s favor, paving the way for a final foreclosure judgment tied to the office building at 299 Alhambra Circle. The settlement is between Bernice Lee, a court-appointed receiver managing Location Ventures’ assets, and an entity managed by Terranova CFO Scott Fitzgerald that has a pending foreclosure complaint against the Location Ventures entity that owns 299 Alhambra Circle.
In a separate order the same day, Becerra also authorized the $17.5 million sale of a Coconut Grove spec mansion owned by Location Ventures.
Kapoor and his attorney, Fred Schwartz, declined to comment. A Terranova spokesperson did not respond to a text and email requesting comment. Lee also declined to comment.
Lee was appointed receiver in January as part of an ongoing federal civil lawsuit by the U.S. Securities and Exchange Commission against Kapoor, Location Ventures and other affiliates. The SEC alleges that Kapoor, who is under state and federal investigations, defrauded $93 million from more than 50 investors that placed equity into his now scuttled real estate projects.
The deal for 299 Alhambra Circle
Under the settlement, Lee won’t contest a final foreclosure judgment, giving Terranova the inside track at buying 299 Alhambra Circle at a courthouse auction. In exchange, Terranova agreed to pay Location Ventures $100,000 and apply $300,000 in rent held in escrow to mortgage debt.
In October, Terranova acquired two mortgages totaling $11.7 million from a previous lender that had filed liens against the Location Ventures entities for allegedly defaulting on the debt. The following month, Terranova filed a foreclosure complaint in Miami-Dade Circuit Court, alleging Location Ventures owes $13.8 million, including interest and late fees.
Coincidentally, Terranova, along with Miami-based firms Torose Equities and Lndmrk Development, in July of last year paid $54.3 million for a 13-story building at 255 Alhambra Circle, which is adjacent to the Location Ventures headquarters.
In a March motion opposing the settlement, Kapoor argued that he could sell the building at 299 Alhambra Circle for more than the debt owed on the delinquent mortgage. Kapoor alleged that he and Torose principal Scott Sherman had previous discussions last year about doing a deal for the building at 299 Alhambra Circle when the property was listed with an asking price of $22 million.
Kapoor also claimed that Terranova, Torose and Lndmrk were contemplating redeveloping both office buildings into a mixed-use Live Local Act project with apartments, the motion states. Live Local allows developers to build higher density projects if they set aside 40 percent of apartments for workforce housing.
Sherman did not respond to a request for comment via a spokesperson.
Spec mansion deal also forges ahead
In addition to resolving the fate of the 299 Alhambra building, Judge Becerra dismissed objections to the sale of the Coconut Grove spec mansion by the holder of a second mortgage secured by the property. Becerra agreed with Lee, the receiver, that the best course of action is to sell the unfinished home for $17.5 million and pay off the entity that owns the first mortgage on the property. The buyer is Miami-based JWY Trust, court records show.
The first position lender, 3610 Stewart Acquisition, led by Robert Gutlohn in Coral Gables, has a pending foreclosure complaint for an alleged $14.5 million mortgage debt, court records show. Gutlohn agreed to accept payment of $13.9 million from the sale.
The second position lender, Martin Halpern, as trustee of two trusts under his name and his family’s name, also has a pending foreclosure complaint against Location Ventures for an unpaid $4 million mortgage debt.
The planned $17.5 million sale would wipe out the Halpern liens on the spec mansion. However, Judge Becerra ruled that Halpern can submit claims with the receiver.