Westside Investment Partners will be the new owner of the troubled Banyan Cay Resort and Golf Club project in West Palm Beach.
U.S. Bankruptcy Judge Erik Kimball last week approved Denver-based Westside’s $102.1 million stalking horse bid after no one else submitted competing offers for the 200-acre development site, court records show. The sale is scheduled to close on July 31, said Westside principal Otis Moore.
“It’s been an intricate process,” Moore said. “We will hit the ground running and anticipate opening the hotel on Dec. 1.”
Westside, led by managing principal and founder Andrew Klein, is taking over a hotel-anchored mixed-use project that ran aground due to the previous developers’ delays and financial troubles. That includes recent foreclosure actions against the massive property at 2020 Banyan Way.
In February and March, Banyan Cay’s parent company and the project’s development entity separately filed for Chapter 11 reorganization. The plan was to sell the land and the project’s completed portions to pay off debtors, and for construction to move forward.
The previous developer, Domenic Gatto, Jr., paid $26 million for the site in 2015. The complex consists of a nearly completed, previously Hyatt-branded hotel with 150 rooms, and an 18-hole golf course designed by Jack Nicklaus that is open. The assemblage also includes parcels that are approved for a 179-unit condominium, 28 single-family homes and 22 villas.
Westside is still in talks with Hyatt, but is also having discussions with Marriott, Hilton and other hotel companies, Moore said. His firm is also looking for a new golf course operator and for possible partners to develop the condominium.
Construction of the hotel faced delays as a result of contractors suing Gatto’s development entity for alleged nonpayment, construction records show. Gatto is also dealing with a federal criminal indictment unrelated to the project. He’s under indictment for alleged conspiracy to commit health care fraud in connection with an alleged $65 million scheme.
Debtors seeking repayment include an affiliate of California-based Calmwater Capital, which won a $95.1 million judgment against Banyan Cay Resort & Golf and Gatto for defaulting on a $61 million construction loan. In a separate UCC foreclosure action, a mezzanine lender made up of EB-5 visa program foreign investors had also sought to sell the Banyan Cay Resort site. The lender alleged Banyan Cay’s parent company defaulted on a $5 million mortgage debt.