November 1st, 2015 5:18 AM by Nour Ailan
Maxim Credit Group must be confident that the developers of the Prive at Island Estate condominium in Aventura will overcome their legal challenges as the New York-based commercial lender granted a $25 million mortgage to the project.
With 160 units planned in two 16-story towers, the cost of building Prive is likely only a fraction of the $25 million loan. The developers led by Gary Cohen and BH3 can also tap some buyer deposits. Site work has already started at 5000 Island Boulevard, a private island in Dumfoundling Bay. The foundation is mostly completed and one of the towers is already several stories tall.
BH3 Principal Daniel Lebensohn said the Prive is on schedule to be completed in June 2017. The $25 million loan was an initial advance for a mortgage that could be up to $200 million, if needed, he said. Buyer deposits are also being utilized as the condos are more than 50 percent under contract, Lebensohn said.
Prive is facing litigation from a group of homeowners on a neighboring island, where a bridge and road connects the mainland to the condo development site. The homeowners want to reverse the city’s zoning approval of the condo project because they believe Cohen’s vested rights for the property should be limited to single-family homes.
On Oct. 23, Miami-Dade County Circuit Court Judge Jerald Bagley ruled against summary judgment motions by both the Prive developer and the homeowners that could have decided the case. Bagley said the big issues: whether Cohen has vested rights for condos or single-family homes and whether the city followed its zoning rules when approving the project, would be decided at trial.
The trial is scheduled for early March.
By starting construction and taking out a big mortgage now, the Prive developers are placing their bets on a victory in the courtroom.
"The lender lent on the project. People are buying in the project," Lebensohn said. "A title insurance company issued title insurance on the project for the benefit of the lender, and title companies don't underwrite any risk. A nationwide construction company secured bonding for the project. Those facts speak for themselves."
Lebensohn said the homeowners are "grasping at straws" in their case. However, they're still trying to disrupt the project.
“Anyone who has money in Prive is at risk because a court has determined that there are legitimate issues about whether Mr. Cohen has the right to build this project. We look forward to trial,” said Susan Raffanello, the attorney who represents the homeowners.