https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg 0 0 Toby Tobin https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg Toby Tobin2010-02-04 00:00:002021-03-19 14:53:57Singer Island Resort’s Drained Investors Claim Deceit
Singer Island Resort’s Drained Investors Claim Deceit
They say they’re victims of unforeseen fees and false promises of profit.
Palm Coast, FL – February 4, 2010 – An excellent article recently published in the Palm Beach Post does a great job of revealing flaws that have become apparent in the condo/hotel business model. It tells what happened at Singer Island in south Florida.
By Jane Musgrave
Palm Beach Post Staff Writer
“It’s just been a devastating thing,” said Sam Lasorda, owner of a Pennsylvania pest control company. “It’s been a financial disaster.”
Court records show nearly 60 units are in foreclosure. At least $1.5 million in assessments hasn’t been paid. And those numbers are expected to increase.
“I have no intention of paying any more of those fees,” said George Melillo, a retired pharmaceutical company executive who lives in Naples. “At the first of the year I decided to take my $300,000 loss and go on my way.”
Real estate experts aren’t surprised that the luxury hotel is in trouble.
Conceived at the height of the sizzling real estate boom, the resort is a condo-hotel. Owners said they plunked down hundreds of thousands of dollars with the promise that they would make money when the units were rented for as much as $600 a night.
Of course, the big returns never came, said Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach.
“It was a failed business model from the get-go,” he said of the concept that was used to finance hotels in tourist meccas nationwide. “None of them is yielding any positive income for owners.”
Like other condotel owners, those at the resort were hit hard by the recession. But owners of the Singer Island condotel were uniquely affected.
A year after developer WCI Communities completed the project, its then-chairman, billionaire financier Carl Icahn, announced it was filing for bankruptcy. As part of its reorganization, it sold the $210 million resort to Bethesda, Md.-based Urgo Hotels for $7.1 million. Instead of being run by the upscale Starwood brand, it is part of the more pedestrian Marriott chain, which doesn’t fetch the promised sky-high rates.
“It was like the perfect storm,” said Lasorda, whose $750,000 two-bedroom unit is now appraised at $240,000. But the economic storm isn’t what hurt the owners. They say they were victims of false promises.
Toby’s Commentary: Read the entire article including the reader comments. The folks who bought the Singer Island condos don’t get too much sympathy from others.
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