Buyers sue developer of long delayed Mandarin Oriental Boca Raton

Frank and Nancy Scala signed a contract for a condo at Mandarin Oriental in Boca Raton, and expected to close on their unit in June 2021. 

That year, the Scalas sold their waterfront home in Boca Raton. They provided the developer with a nearly $1.3 million deposit. But the closing date for their $4.1 million condo came and went. According to their contract with the developer, an affiliate of Penn-Florida Companies, the developer had three years within the estimated closing date to deliver the unit. That date, June 30 of this year, also came and went. 

Now, they and other buyers are suing the developer over the delayed project. 

Penn-Florida, led by President Mark Gensheimer, bought the site for the Via Mizner project at 105 East Camilo Real in 2014. The first phase, an apartment building, was delivered four years later. 

The project, which includes a planned 164-room Mandarin Oriental hotel and a 86-unit condo, was originally expected to be completed in 2020. Last year, Madison Realty Capital provided a $302.5 million refinancing. The condos were about 90 percent presold at the time. 

“The entire structure … is still just a few steps beyond a concrete shell, and a closing is far off into the future,” according to the lawsuit filed by the Scalas on Aug. 13 in Palm Beach County Circuit Court. They are suing Via Mizner Owner III LLC, the Penn-Florida affiliate, and seeking their deposit back, plus interest. 

A spokesperson for the developer said in a statement that construction is ongoing and that the Mandarin component will be completed next year.

The Scalas’ attorney, James Ferrara, a partner with Hinshaw & Culbertson in Fort Lauderdale, said his clients “have such a bad taste in their mouth from this project” that they just want their deposit back. They have been living in a rental apartment near the construction site for roughly two and a half years. 

“They had this dream of living in the crown jewel of Boca Raton real estate,” Ferrara said. “For the Scalas, it’s heartbreaking. All they want is for the developer to abide by the terms of the contract.”

Ferrara is alleging that the developer is in default of its agreement with the Scalas. On July 5, the couple demanded their deposit back. On Aug. 10, the Scalas were told, “without any explanation or legal basis, that they were ‘not entitled’ to a return of their deposit,” according to the complaint. 

While Penn-Florida can tap into a portion of the buyers’ deposits to fund construction, some funds are set aside in escrow. Ferrara said the developer won’t release that either. 

The company declined to comment on pending litigation but said in its statement “we can confirm that Penn-Florida has and will continue to uphold all purchase agreements, and will take any actions necessary, within the bounds of Florida law, to protect our rights and defend the integrity of the project.”

Ferrara is also representing Robert Stanley Needleman and his wife, Brenda Needleman, who filed their lawsuit against the developer in Palm Beach Circuit Court this week, seeking their nearly $1.8 million deposit back for their $5.9 million condo. The Needlemans signed their purchase agreement in 2019, according to their complaint. 

Ferrara said he represented a separate couple who filed a lawsuit in July. That case was dismissed, which means it was likely settled. 

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