Fuse Group is aiming to derail developer Brian Tuttle’s strategy for keeping control of his Mainstreet at Tuttle development site in Royal Palm Beach.
Fort Lauderdale-based Fuse, led by Eyal Peretz, on Sept. 29 filed a motion to dismiss a Chapter 11 petition in Miami federal court filed this month by the Tuttle entity that owns 38 acres on the southwest corner of U.S. 441 and Southern Boulevard.
The developer is planning Mainstreet at Tuttle, a mixed-use project with 400,000 square feet of retail, 401 apartments, a 125-key hotel, nearly 83,000 square feet of medical offices and three parking garages with 3,435 total spaces. The development has not broken ground.
Fuse alleges the Chapter 11 petition is a “bad faith” attempt by Tuttle to delay a court-ordered sale of the development site.
The Tuttle entity filed for bankruptcy on the same day the property was scheduled to be sold at a foreclosure auction. Proceeds would have satisfied a $47.4 million judgment Fuse won in July tied to three loans that the developer allegedly defaulted on.
As part of its motion, Fuse attached an email Tuttle sent in July 2024 to contractors working on Mainstreet at Tuttle and other project stakeholders in which he outlined his plan to avoid losing the development site, as well as explaining his difficulties landing a new equity partner.
In the July 21, 2024 email, Tuttle wrote, “I will then file a bankruptcy…this will buy us another year at a minimum” if he was unsuccessful in landing a new partner by the time Fuse’s foreclosure complaint was concluded. Fuse filed the lawsuit in Palm Beach County Court last year.
Fuse and its attorney, Josh Rubens with Miami law firm Kluger Kaplan, declined to comment.
In a phone interview with The Real Deal, Tuttle accused Fuse of taking his email out of context and misrepresenting his intentions. “I was trying to delay [in order] to find an equity investor to pay them and the other creditors,” Tuttle said. “We will provide adequate proof that we have worked very hard and with numerous groups with the sole purpose to pay them back.”
Fuse’s goal is to “wipe out all the other creditors and not give them anything,” Tuttle added.
The email also noted Tuttle’s difficulty last year drumming up new investors due to market conditions and the uncertainty of the 2024 presidential election. “I have presented the deal to over 200 groups in the last 14 months,” Tuttle wrote. “I have been unable to get a group to invest as a co-developer or LP equity partner.”
In all capital letters, Tuttle claimed that the groups he reached out to all cited high interest rates and insurance costs for turning him down: “THESE GROUPS DO NOT WANT TO TAKE DEVELOPMENT RISK AT THIS TIME.”
While he claimed to have JP Morgan ready to provide a construction loan, the Mainstreet at Tuttle project still needed an additional $30 million to be built, Tuttle wrote.
Tuttle told TRD that market conditions have become more favorable for investors, and that he has now found an equity partner that can provide capital to pay back Fuse and restart the project. The Mainstreet at Tuttle ownership entity will be disclosing more information about its new partner in its reorganization plan that will be submitted to the court soon, Tuttle added.
“Before, you had uncertainty of Trump and the election, the uncertainty of interest rates and the uncertainty surrounding the absorption of existing apartments,” Tuttle said. “Since then, things have taken a huge shift. There is general agreement that interest rates are going down…and the absorption of apartments is exceeding everyone’s expectations.”
