Ethiopian Review

Fortune International President Edgardo Defortuna was named in a $67 million foreclosure lawsuit against the former Seville Hotel South Beach, which he had hoped to redevelop.

This is the first foreclosure lawsuit facing Miami-based Fortune International, which has many other large condo and condo/hotel projects that it’s trying to sell out in this difficult market.

Fortune was the third-largest residential developer in the South Florida Business Journal’s 2009 Book of Lists, with $563 million in sales for 2007, trailing only the Related Group and Lennar Corp. Its other projects include Jade at Brickell Bay and Jade Beach.

FirstBank Puerto Rico filed the foreclosure complaint on Aug. 24 against 2901 Beach Ventures, Defortuna and Alfredo Lowenstein, the managing member of Lionstone Group, according to Miami-Dade County Circuit Court records.

The 12-story hotel at 2901 Collins Ave. is 278,547 square feet and sits on three acres. It was purchased for $25 million by 2901 Beach Ventures in 2005.

Fortune International and Lionstone Group were teaming up on the project to redevelop it into residential. They had a contract with Ritz-Carlton to manage it. In the meantime, the hotel has been closed.

FirstBank Puerto Rico gave 2901 Beach Ventures a $65.8 million mortgage to redevelop the property in late 2006. According to Fortune International’s Web site, the Ritz-Carlton Residences and Club was to have 89 units completed in 2010.

However, a July 30 lawsuit by investors against Defortuna claimed that Ritz-Carlton pulled out of the deal, but the developer kept that secret from investors.

An official with Fortune International didn’t immediately respond to a request for comment.

FirstBank Puerto Rico is represented by Miami attorney Jose A. Casal, who couldn’t be reached for comment.

Peter Zalewski, CEO of Condo Vultures LLC, said the old Seville Hotel needs a complete facelift, if not open-heart surgery, to become a good residential project. However, the cost of doing major renovations would make it hard to sell the units at realistic prices, he said.

“I can’t imagine that anyone who purchases it would spend more than $100 per square foot on renovation,” Zalewski said.

(by Brian Bandell | South Florida Business Journal)