Developer Dan Kodsi missed a deadline to post a surety bond as part of an agreement reached with his lender, Monarch Alternative Capital, in the Legacy Miami Worldcenter foreclosure.
Kodsi’s Legacy MWC Trustee and Legacy MWC Land Trust have been wrapped up in litigation with New York-based Monarch since the summer over the construction loan backing the Legacy Hotel & Residences project site at Miami Worldcenter. Construction of the 50-story tower has been on hold since last year.
In an order Judge Spencer Eig entered in August, Eig said the developer had until Sept. 22 to post a $32 million surety bond, and until early November to pay Monarch more than $35 million, plus accrued and unpaid interest and late fees. The order was the result of an agreement reached between the borrower and lender. The payment would satisfy the mortgage and eventually resolve the foreclosure suit.
The developer’s LLCs “failed to timely post” the bond, according to Monarch’s notice, filed last Wednesday. Because no surety bond was posted, the developer’s rights to enforce the terms of their agreement “immediately lapse” and “are terminated without further order of the court,” Monarch’s attorney, Josh Rubens, wrote in his notice.
A source told The Real Deal that the developer has the funds to post the bond, but instead is using those funds to try and settle with Monarch.
Rubens declined to comment. Kodsi and his attorney, Joseph Pardo, also declined to comment. The judge’s August order bans the developer, lender, their employees, agents, representatives or attorneys from making any public statements about the case.
Eig’s August order was necessary for the developer to refinance the loan. In a July 31 hearing, Kodsi, CEO of Royal Palm Companies, said he’s working on a $390 million refinancing of the $340 million loan.
Silverstein Capital Partners provided the developer with the original construction loan in late 2021, but Silverstein only funded $30 million, Kodsi said during the July 31 hearing. Monarch Alternative Capital took over the loan on June 6 of this year.
Legacy, a partially built mixed-use condo and hotel tower at 942 Northeast First Avenue in downtown Miami, is expected to have 310 short-term rental-friendly condos, a 219-key hotel and a medical and wellness center. Kodsi launched condo sales in 2019, and the condo portion sold out during the pandemic for an estimated $160 million. Construction began in 2021, and it was expected to be completed last year.
Kodsi’s Royal Palm has worked with Monarch before. The developer, in its counterclaim, alleged that Monarch was forced to back down from Monarch’s alleged effort to wipe out Royal Palm’s equity in a Coco Beach project. That’s when Monarch allegedly shifted its attention to the Miami Worldcenter project, Royal Palm alleged.
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