UPDATED April 26, 12: 20 p.m.: LB Construction of South Florida, the general contractor of H3 Hollywood, submitted the winning bid for the project’s assets at a foreclosure auction on Tuesday. LB submitted the bid on behalf of an investor group that will take title to the H3 development and plans to finish building it.
LB Construction bid $250,200 more than its $15.8 million court judgment for an unpaid lien against Hollywood Station Investments, the developer of the partially built, planned condominium development at 2165 Van Buren Street.
“We won on a credit bid of $250,200,” said Peter Berlowe, an attorney for LB Construction.
Berlowe, partner of law firm Assouline & Berlowe, said LB Construction plans to finish the 15-story building as planned.
Hollywood Station Investments halted construction of the residential development last fall after LB Construction finished 13 floors of the planned 15-story, 247-unit building. The developer sent a letter to buyers saying they were seeking financing.
Hollywood Station Investments, managed by Diego Besga of Team Real Estate Management, had presold 60 percent of the units as condos when construction stopped. Unit prices started at $250,000. Fortune International Realty handled sales. Construction had been expected to be completed by December 2016 or January 2017.
Now, LB Construction may not finish the building as a condominium, Berlowe said.
“Market factors will determine whether it gets completed as a condominium or as [rental] apartments,” he said. “As far as I know, the condominium declarations were never filed. It is not currently a condominium, and it may never be a condominium.”
Several individuals who made 50 percent deposits towards unit purchases have sued Hollywood Station Investments to recover their deposit money.
LB Construction is one of about a dozen companies that filed suit against Hollywood Station Investments to foreclose on construction liens.
Luis Salazar, a Coral Gables attorney representing the developer, could not be reached Tuesday for comment.
LB Construction’s bid to acquire the partially built residential building in Hollywood is subject to “a 10-day objection period,” Berlowe said.
If no one formally objects, the clerk of court will issue a certificate of title, or a clerk’s deed, transferring title to H3 to an investor group led by real estate broker Vivian Dimond, said David Hirschfeld, a consultant to LB Construction who worked with Dimond to settle claims against the H3 property.
Hirschfeld told The Real Deal today that the group Dimond leads will take title to H3 in a negotiated settlement to compensate 34 sub-contractors of LB Construction with unpaid liens from their work on the development. In addition, depositors who tried to reserve condo units at H3 would receive compensation equal to “at least a portion” of their deposits, he said. Hirschfeld called the settlement the result of a “friendly foreclosure” proceeding against the Hollywood Station Investments.