BRADENTON — The “pink palace” has joined the growing ranks of Manatee properties threatened with foreclosure but its developer says he still hopes to restore it to a luxury hotel.
Regions Bank sued the owners of the historic downtown landmark last week, claiming they defaulted on a $2.625 million loan used to buy the building at 309 10th St. W., court records show.
The suit, filed April 24, names River Grande Development Inc., normally known as Riverpark Grande Development Inc.; Kendar Homes Corp.; Kendar Development Corp.; and Darrell Reha as defendants.
River Grande bought the property for $3.5 million in 2005 with plans to renovate the former senior-housing complex into condominiums. Those plans later changed to a proposed luxury, boutique hotel after the condo market crashed.
Reha told city officials in March 2008 that he had an unidentified luxury-hotel operator under contract, but little or no work has been done on the building since then. The project got caught in the credit crunch during last year’s financial crisis and Reha has not yet been able to obtain long-term financing, he said Friday.
According to the suit, the defendants borrowed the money in December 2005 but were delinquent by March 2007. Both sides later agreed on a renewal mortgage that was payable in June 2007.
But the defendants defaulted by missing that payment deadline and by not paying three years’ worth of property taxes on the site, the bank contends. Regions said it was owed nearly $2.88 million in principal, interest, late fees and other costs as of Jan. 6 of this year.
An updated figure was not immediately available Friday, but tax records show River Grande Development paid $48,789 in 2006 taxes on March 25 of this year, but its 2007 and 2008 tax bills remain unpaid.
L. Geoffrey Young, a St. Petersburg attorney representing Regions, did not return messages Friday.
Reha said he had hoped to avoid the foreclosure filing, but it became unavoidable after Regions froze the developer and hotel operators’ lines of credit.
“They worked with us as much as they could but I guess they couldn’t hold off any more,” he said.
Bradenton Mayor Wayne Poston said he was disappointed but not surprised by the filing.
“We knew it was a possibility but we all were hoping they would be able to work things out,” he said.
The suit was among 526 foreclosure actions filed in Manatee County Circuit Court last month, according to court records. That’s less than the record 608 filed in March, but more than the 488 that were filed in April 2008.
Lenders have filed 2,179 foreclosure suits so far this year, 26 percent more than the 1,729 filed during the same period last year.
According to a Bradenton Herald analysis of April filings:
n The Lexington subdivision near Parrish had the most foreclosure suits with 12.
Covered Bridge Estates in Ellenton had seven and there were six each in the Palms of Cortez condominium complex in Bradenton, Greenbrook Village in Lakewood Ranch and the Holiday Heights area of Bradenton.
n 54.6 percent of the properties targeted for foreclosure were homesteaded, the fourth straight month that primary homes have outnumbered seasonal and rental homes.
n More than 61 percent of properties facing foreclosure had Bradenton mailing addresses, followed by Palmetto (10.5 percent) and Parrish (8.4 percent).
Duane Marsteller, transportation/growth and development reporter, can be reached at 745-7080, ext. 2630.
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