Paramount Bay Condos Up For Auction After $262 Million Foreclosure, But Are They Cursed?
|Marc Averette via Wikimedia Commons|
|Paramount Bay exactly three years ago, shortly after a crane accident killed two workers.|
Bright orange cones guard the lonely front steps. Plastic barriers block the parking lot. One of the last highrises built in Miami before the bubble burst, the gleaming condo is now a ghost town.
After a record $262 million foreclosure last month, Paramount Bay is up for auction tomorrow. But buyer beware: this condo might be cursed.
It wasn't supposed to be this way. When developer Royal Palm Miami Holdings broke ground in 2005, Paramount Bay was billed as the cutting edge of the Magic City's booming real estate industry. Topnotch firm Arquitectonica drew up the plans. "We're not just building condos; we're building lifestyles," Royal Palm President Dan Kodsi said at the time. "We're selling cool, luxury, the future."
Like other Miami developers, however, Royal Palm was also wasting money at a furious clip. The developer spent half a million dollars to turn the historic Wolf House -- featured in the movie There's Something About Mary -- next door into its sales center. And it splashed $200,000 on a celebrity-studded launch party, including ten grand on fireworks.
In 2006, Royal Palm took out a $210 million loan from Chicago-based Corus Bank and private lender iStar Financial. But by 2008, with the condo half-built and the market slumping, Royal Palm was struggling to pay.
Then, in March of that year, a construction crane fell 37 stories from the top of Paramount Bay onto the Wolf House. The seven tons of steel crushed the office, killed two workers, and led Gov. Charlie Crist to call -- in vain -- for greater crane safety legislation.
To make matters worse, Corus Bank went belly-up in 2009 after making too many bad loans.
Finally, last month, iStar Financial won a foreclosure settlement against Royal Palm for $262 million.
"The writing was on the wall," says iStar Senior Vice President Anthony Burns. "It made sense for all parties for the developer to turn the keys back over to the lender."
Burns expects iStar to buy the condo at an auction tomorrow, clearing the way for it to finally open its swanky doors later this year. Despite the deadly crane incident, Burns believes Paramount will live up to its name.
"It was certainly a very unfortunate accident," he says. "But it was obviously a long time ago, and it's a great building in a great location." He says sales should restart this summer.
Neighbors aren't so sure that everything is all right. "I heard that it's got a crack in the foundation," says midtown resident Michael Fiorellino. "Otherwise, why would it still be empty?"
There's no crack, building managers say. Just a gaping hole in logic.