A bankruptcy judge approved Westside Investment Partners’ stalking horse bid to buy the West Palm Beach, Fla. property in June, which would have paid off creditors. The Denver-based company planned to finish the 150-room hotel, eyeing a Dec. 1 opening date. Westside was in discussions with Hyatt, Hilton and other hotel companies, as well as scouting for a new golf course operator.
Westside Investment Partners backed out of its $102.1 million purchase of the Banyan Cay Resort and Golf Club in West Palm Beach, Fla., The Real Deal reported. The 200-acre development site includes a completed Jack Nicklaus-designed golf course and a partially built hotel, filings in West Palm Beach federal bankruptcy court show.
Club + Resort Business reported in June that the long-delayed resort finally looked to be on track for completion after the bid, but coverage goes back to 2015 when Banyan Cay Dev, LLC acquired The President Country Club and renamed the property, with plans to redevelop the 119-acre site into a resort-style community.
In 2018, C+RB reported that Banyan Cay was set to add a resort component. Construction also started on a clubhouse that was to be completed that fall. A $62 million loan was secured to start construction of a 150-room hotel, meeting facilities and other amenities.
C+RB reported in July 2019 that crews stopped construction on the planned $100 million complex in May 2019, but ramped it back up with a finish date set for Fall 2020. Owner Domenic Gatto called the stoppage a “business decision,” saying it didn’t make sense to finish in Summer 2020 during the area’s slow tourism season. A city official said the partly built resort could be hit with fines, citing hurricane safety concerns.
Westside, a Denver-based real estate investment firm led by founder and managing principal Andrew Klein, was the sole bidder for the property, The Real Deal reported.
Proceeds from the failed purchase would have paid off creditors, such as California-based Calmwater Capital and Banyan Cay Resort Fund, a mezzanine lender made up of EB-5 visa program foreign investors, The Real Deal reported. In February, a Calmwater affiliate won a final foreclosure judgment for $94.1 million against Banyan Cay Resort & Golf, the development entity, for defaulting on a $61 million construction loan.
The mezzanine lender had sought a separate UCC foreclosure sale of the project to recoup $6.3 million in principal and interest from an affiliate of Banyan Cay Resort & Golf, previously led by Domenic Gatto Jr., The Real Deal reported. Westside’s Klein, Banyan Cay Resort & Golf’s restructuring officer Gerald McHale and attorney Joseph Peck did not immediately respond to requests for comment.
Westside ditching its plans to buy the Banyan Cay development site is a stunning reversal since Bankruptcy Judge Eric Kimball approved the firm’s stalking horse bid in June, The Real Deal reported. At the time, Westside principal Otis Moore told The Real Deal that the company planned to finish the 150-room hotel, eyeing a Dec. 1 opening date.
Westside was in discussions with Hyatt, Hilton and other hotel companies, as well as scouting for a new golf course operator, The Real Deal reported. It also was interested in finding a development partner for a condominium planned near the hotel, Moore said.
Gatto, the previous developer, had city approval to build a Hyatt-branded hotel, a 179-unit condominium, 28 single-family homes and 22 villas, The Real Deal reported. In 2015, he paid $26 million for the site and opened the golf course two years later.