Saddled with estimated debt that could reach $500 million to 200 creditors, Cabi Downtown LLC, the Mexican owners of the one-year-old, $300 million
Everglades on the Bay (centered photo below) community have filed for Chapter 11 protection under the U.S. Bankruptcy Code.
The twin-tower, 49-story project has closed only 9 percent of its 849 units for an estimated total sales of $31 million, according to Bal Harbour, FL-based Condo Vultures® Bulk Deals Database.
A hearing is set for Sept. 2 to clarify the total debt and assets involved, as well as drafting a more complete list of creditors, according to court records.
The owners stated in their Aug.18 bankruptcy filing they owed between $100 million and $500 million.
A $256 million first mortgage was due in February of this year. The condo is located on the former site of the Everglades Hotel at 250 Biscayne Blvd.
"This is the first new condo tower in Greater Downtown Miami to seek bankruptcy protection," says Peter Zalewski, (middle right photo) a principal with Condo Vultures® LLC, a real estate consultant.
"The action must have become necessary as the number of closings at this Class A project slowed to a trickle in recent months. The primary reason is the current pricing at Everglades on the Bay is more reflective of the boom years rather than today's tumultuous market.”
"There is every reason to think this project will sell out rapidly to individuals and/or bulk buyers once the pricing is brought in line with current market conditions," adds Zalewski.
The average purchase price on the 75 units that have closed at the Everglades on the Bay project between November 2008 and June 30, 2009, is more than $425 per square foot, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.
By comparison, many of the Greater Downtown Miami condo projects today are priced between $200 and 
$300 per square foot.
$300 per square foot. “Several of these projects are experiencing brisk sales as foreign nationals, investors, and first-time home buyers are increasingly entering the market looking for value,” says Zalewski.
The 20 largest creditors to be identified to date are owed more than $2.6 million, according to the filing.Gryphon Construction in Fort Lauderdale is the largest single creditor identified in the filing with an outstanding balance due of $912,272.25 for trade work.
The Coral Gables law firm of Siegfried, River, Lerner, De La Torre & Sobel PA is the second largest creditor with an unpaid balance of $395,456.98 for professional fees.
Rounding out the top three largest creditors is Holly Sime Realty, a Miami-based real estate brokerage that is owed $193,750 for professional services, according to the filing.
Many of the other large creditors are law firms, construction companies, and product/parts suppliers. Zalewski says “two sizable creditors worth noting are the separate condominium associations for each of the two towers in the complex.”
The Everglades on the Bay North Condominium Association is owed $106,394.10, and the Everglades on the Bay South Condominium Association is owed $38,283.73, according to the filing.
Bank of America, the lead construction lender on the project, is not named in the bankruptcy filing. Bank of America provided a construction loan of $243.4 million in December 2005 for a term of three years.
Under the mortgage terms, the loan amount could be increased to a maximum amount of $256 million and extended through February 2009, which it was in November 2008. It is unclear at this point how much is still owed to Bank of America as more than $31 million in sales have been recorded through the end of the second quarter, according to the Condo Vultures® Bulk Deals Database.
On Jan. 26, 2008, Cabi CEO Jacobo Cababie died, prompting a management change in the corporation that owns Everglades on the Bay.Elias Cababie, chairman of Mexican development giant GICSA, took over as head of Cabi, the U.S. subsidiary of GICSA.
He also appointed two senior GICSA people to help him. Elias Amkie became senior VP of operations and Rafael Harari became senior VP of development. Misha Mladenovic continued as Cabi’s VP of development.
Cabi Downtown LLC, with member Elias Amkie Levy as signatory, filed the bankruptcy petition in the U.S. Bankruptcy Court's Southern District of Florida in Downtown Miami.
Cabi Downtown's members are Levy, Elias Cababie Daniel, Abraham Cababie Daniel, Rafael Harari Tussie, and Jaime Dayan Tawil, according to the Florida Secretary of State.
