Developer Brian Tuttle was hit with a foreclosure tied to $38.4 million in loans for his planned Main Street mixed-use project in Royal Palm Beach.
The lender of three loans issued in 2021 claims that Tuttle and his affiliates, through which he owns the Main Street development site, failed to pay the full principal and interest due when the mortgages matured in December, according to real estate database Vizzda and a foreclosure suit filed last week in Palm Beach County Circuit Court.
The 38-acre Main Street is part of Tuttle’s roughly 200-acre master-planned Tuttle Royale development on the southwest corner of U.S. 441 and Southern Boulevard. Main Street would consist of 400 apartments, 750,000 square feet of retail and office space, a 150-key hotel and garages. Construction has not started.
The suit comes as elevated interest rates and a general sense of economic uncertainty have plagued investors and developers nationwide, especially those trying to refinance maturing loans. Florida’s real estate market is feeling an additional sting from skyrocketing insurance premiums.
Main Street is part of several planned projects by Tuttle, who is transitioning into development after earning a reputation in the Florida real estate industry as a land guy. For two decades, Tuttle found and assembled buildable tracts, fully entitled them and then sold them to developers. The land business is risky and difficult, and completing his own projects would allow him to generate a steady income stream from rents, Tuttle told The Real Deal last year.
Read more
Residential
South Florida
Brian Tuttle’s next act: Longtime “land guy” turns developer
The 65-year-old isn’t giving up Main Street, saying he is in talks with two lenders to refinance the loans. “We expect to get that done in 60 days,” he said.
Also, Tuttle said he is finalizing negotiations with an equity investor that would infuse $100 million to help start construction of Main Street’s first phase, consisting of 300 apartments and 225,000 square feet of commercial space.
In 2021, Fort Lauderdale-based Fuse Group provided a $23 million loan, a $1 million loan and a $1.5 million loan for various Main Street development parcels. Each of the three loans were amended twice, once in 2022 and then last summer, extending their final maturities to December. The loan modifications also increased the principal of the first loan to $34.7 million and the principal of the third loan to $2.7 million, according to the complaint and mortgage records.
Tuttle and NEM LLC, an entity managed by Tuttle’s children, Michael Tuttle and Nicole DeBehnke, signed personal guarantees on the loans, making them personally liable for mortgage payments, according to the complaint.
Before Tuttle and his affiliates failed to meet the December principal maturity date, they first defaulted by not paying a $353,250 payment on the $34.7 million loan due in September, according to the complaint. The loans were cross-collateralized with one another, meaning a default under one of the loans spells default under all of the loans.
Each of the mortgages had a 10.5 percent annual floating interest rate over the Secured Overnight Financing Rate, plus a 7.4 percent rate adjusted monthly, according to records.
“Every dispute has two sides,” Tuttle said, adding that the alleged interest rate would be one of his defenses once he files a response in court. “There is confusion on the interest rate and amount of money owed.”
Fuse Group, led by CEO Eyal Peretz, reassigned the loans this spring to Tuttle Royal Lender LLC. The identity of the new mortgage holder is unclear, as Tuttle Royal Lender is a Delaware-registered entity and isn’t listed in Florida corporate records.
Peretz didn’t return a request for comment. Josh Rubens, the attorney who filed the foreclosure on behalf of Tuttle Royal Lender, declined to comment.
The foreclosure is not the first financial trouble for Tuttle, whose career is marked by highs and lows. During the Great Recession, he and two of his affiliates filed for bankruptcy, and a judge issued a nearly $6 million judgment against one of his entities over debt for a Palm Beach County property. Even after he exited bankruptcy, some of Tuttle’s lenders were still after him over unpaid debt. At the time, Tuttle lost some of his land assemblages, as well as two homes, one of them his homestead.
Last year, Tuttle told TRD that he was not at fault, but got caught up in the financial collapse, which precluded him from extending loan maturities and refinancing.
It hasn’t been all trouble for Tuttle. He and San Antonio-based Lynd have been developing another portion of Tuttle Royale, the 401-unit The Villas at Tuttle Royale apartment complex at 11200 Nicole Drive. Tenants will start moving in this month in the completed 75-unit first phase, Tuttle said.
Also at Tuttle Royale, Tuttle wants to build 100 single-family home rentals and has sold other portions of the master-planned complex. The Pérez family’s Related Group completed the 392-unit The Point at Southern Boulevard apartment complex at 10900 and 11020 Town Circle in 2019. New York-based Pantzer Properties bought it for $119.4 million in 2021.
This year, the Fanjul family’s FCI Residential started building a 320-unit apartment complex with 11 three-story buildings and two two-story townhouse buildings at Tuttle Royale.
Tuttle Royale’s master plan also allows for a 1,500-student charter school and an 11-acre park.