The condo tower is part of the $1.5 billion Via Mizner complex at the northeast corner of Federal Highway and Camino Real in downtown Boca Raton.
Alexandra CloughPalm Beach Post
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Two construction companies have filed lawsuits to foreclose on $3.5 million in construction liens placed on the unfinished Mandarin Oriental hotel and residential complex in downtown Boca Raton.
The lawsuits follow five other complaints filed in the past two months by unhappy preconstruction buyers of the promised luxury condo, The Mandarin Oriental Residences.
The condo tower is part of the $1.5 billion Via Mizner complex at the northeast corner of Federal Highway and Camino Real in downtown Boca Raton.
The project includes the 101 Via Mizner apartment tower, now built, and two unfinished 12-story towers: the Mandarin Oriental hotel and a separate tower for condominiums. Shops, restaurants and a private club also are planned.
Strategic Group Builders LLC of Miami claims that it is owed $1.7 million in fees for work managing the project's construction thus far, according to a Palm Beach County Circuit Court complaint filed Aug. 23. The claims involve Strategic's work on two towers, the condo and the hotel buildings.
Meanwhile, Areda Construction of Miami Lakes alleges it is owed $1.8 million for concrete work on the hotel tower, according to its Aug. 13 complaint.
Legal actions seek to foreclose on 'significant amount of money' worth of liens on Boca Raton's luxury condo
The lawsuits seek to foreclose on construction liens, which could force the properties' sale at auction if the contractors are successful in obtaining court judgments, said Gary Nagle, a Juno Beach real-estate lawyer and attorney for the Palm Beach Board of Realtors.
At the very least, "it’s a tactic and a kick in the pants to the Mandarin builder to come up with a solution," Nagle said. "They want to get paid."
Nagle called the contractors' $3.5 million in liens "a significant amount of money."
On Thursday, Aug. 29, one day after a reporter inquired about the complaints, an official with the Mandarin Oriental's developer said the contractors' lawsuits were being withdrawn.
"I've been working with those two contractors for a while," said Albert Piazza, Penn-Florida's president of development. "It's just dragged out for a while. They're both being withdrawn today. It's really going to be a nonissue. We're all busy, and sometimes these things don't get resolved in 24 hours."
On Thursday, Aug. 29, the lawsuits were voluntarily dismissed.
More: Mandarin Oriental in Boca Raton: When will the long-delayed boutique hotel open?
Some buyers demand return of their Boca Raton condo deposits
Since the Via Mizner project first was announced in 2015, downtown Boca Raton has boomed with new eateries, apartments and other upscale condominiums.
But the hotel and condo towers still aren't complete, and some Mandarin Oriental condominium buyers, who have waited years to see their promised luxury residence completed, are fed up.
The long-delayed project, now in its fifth year of on-and-off construction, still is 18 months away from being completed. Penn-Florida now says it will be finished by the end of 2025.
On July 8, Michael and Elyse Filon filed a lawsuit against the condo's parent company, Via Mizner III LLC. The entity is led by Mark Gensheimer, president of Penn-Florida Cos., the Mandarin Oriental's developer.
The lawsuit demanded the return of a $697,500 deposit on a promised $2.5 million condo unit.
In their complaint, the Filons said a 2018 purchase contract no longer is in force because the couple's 10th floor Mandarin Oriental condo was not finished within three years of a November 2020 completion date, as per the agreement.
"As of the date of this complaint, the entire structure of the (condo tower) is still just a few steps beyond a concrete shell," the lawsuit said.
The Filons' case quickly closed after a Palm Beach Post reporter inquired about the case. "It was a timing thing," Piazza said in July. "We were processing it. I'm taking care of it, and he will get his money back."
That lawsuit was soon was followed by a lawsuit from Michael and Trisha Polk, who sought the return of $2.3 million in deposits on a $7.7 million unit. That lawsuit also was closed soon after it was filed, although details of any resolution aren't available.
But in recent weeks, three more lawsuits have been filed by other Mandarin Oriental pre-construction buyers.
Robert and Brenda Needleman are seeking the return of $1.75 million on a $5.85 million condo; Frank and Nancy Scala are demanding the return of $1.3 million on a $4.1 million unit; and an entity called Blaire Properties LLC wants the return of $1.3 million in deposits on two units costing a total of $4.5 million.
"They're all in the same boat," said their attorney, James Ferrara of Fort Lauderdale. "The developer had an obligation to deliver those units by June 2024."
More: Buyers sue to recoup Mandarin Oriental deposit on unfinished Boca Raton condo
The cases remain open and unresolved, as does the frustration.
"It's pretty devastating," buyer Frank Scala said.
Scala said he and his wife sold a large home and hoped to move into their luxury Mandarin Oriental condo in 2022. Since then, the Scalas been living in a rental apartment, hoping their condo's construction would wrap up.
Now they're done waiting, and they want their $1.3 million deposit back.
"We weren’t expecting this to continue to drag on," Scala said. "It's been a real thorn in our sides."
This wave of lawsuits was predictable after the Filons first filed their lawsuit in July, Nagle said. Once one buyer files a lawsuit, "there's a cascade effect," Nagle said.
More: Buyers sue to recoup Mandarin Oriental deposit on unfinished Boca Raton condo
Penn-Florida: We have a strong defense against lawsuits
In an Aug. 29 interview, Penn-Florida lawyer Robert Sweetapple said the company has a strong defense to assertions that the units' closing date has come and gone.
Not only did the COVID pandemic cause delays, but the pandemic also created a shortage of critical materials, including concrete, Sweetapple said. In addition, a March 2020 COVID order by Gov. Ron DeSantis also resulted in delays, he added.
All these elements are part of the buyers' contracts, Sweetapple said, "and we'll sit down with each one of them and go over the facts and the law."
But in a July interview, Penn-Florida's Piazza had struck a softer tone, saying buyers who want their deposits back will have their requests reviewed "on a case-by-case" basis.
Piazza said he understands that with the project taking years to complete, some buyers are aging and can't wait, while others have had changed circ*mstances. But those are the minority of the buyers in the 85-unit condo, which is about 90% presold, he said.
"By and large, everybody is patiently staying with the project," Piazza said.
Secret legal spat between partners hurt project's financing in the past, court records show
Penn-Florida has blamed construction delays on the COVID-19 pandemic and difficulties obtaining materials.
A2022 report by The Palm Beach Postrevealed another reason for the Mandarin Oriental's delay: a long-running lawsuit between the project's partners that scared off lenders, according to court documents.
At one point in the litigation,Penn-Florida's Gensheimer said the lawsuit had made raising capital to complete the project "a struggle," according to court documents.
The partnership litigation has since been settled, and a project refinance took place in 2023.
But the Mandarin Oriental's construction schedule has not resumed at a steady pace, even as other nearby condominiums, such as the Alina Residences, were started and completed.
Sweetapple said the Mandarin Oriental's 2 million-square-foot size makes it different from other projects.
"It's the largest in the history of the state. The finishes and the details are unimaginable," he said.
"People know the Mandarin Oriental (brand). I understand that buyers would be impatient, but the main issue is Mandarin Oriental still wants to put Boca Raton on the map. They're still very committed to this project."
He added the benefits of the Mandarin's completion will be visible in the city.
"When the project is done," Sweetapple said, "it's going to change the face of Boca Raton."
Alexandra Clough is a business writer atThe Palm Beach Post.You can reach herataclough@pbpost.com. X:@acloughpbp.Help support our journalism. Subscribe today.
