Fortune International Takes Big Hits on 2 South Florida Real Estate Deals
(MIAMI, FL) -- The sun isn't shining these days on Miami-based Fortune International's real estate portfolio.
The third-largest residential developer in South Florida faces the loss of most its $30 million equity in a previous partnership deal with Boston-based Sonesta (NASDAQ: SNSTA) this month when the shuttered Sonesta Beach Resort is sold to Argentine developer Consultatio S.A.
The price is $78 million. In 2005, the 37-year-old property at Key Biscayne, FL, a Miami suburb, carried a $120 million price tag.
The new owner plans to build a residential condo community on the site.
Fortune International and Sonesta had planned to re-develop the Sonesta Beach Resort site into a $300 million luxury condo hotel. However, the city of Key Biscayne rejected the plans. Fortune International, headed by Edgardo Defortuna was a 50-50 partner in the planned project.
In a second setback, Defortuna is named in a $67 million foreclosure lawsuit against the former 12-story Seville Hotel South Beach, which he had hoped to also redevelop. Its other projects include Jade at Brickell Bay and Jade Beach condos. Fortune International's last published sales volume was $563 million in 2007.
FirstBank Puerto Rico's foreclosure complaint also names 2901 Beach Ventures, and Alfredo Lowenstein, the managing member of Lionstone Group, according to Miami-Dade County Circuit Court records.
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. The property's mortgage balance is $56 million.
The three-acre, 278,547-square-foot hotel at 2901 Collins Ave. was purchased for $25 million by 2901 Beach Ventures in 2005.
Fortune and Lionstone had jointly planned to redevelop the hotel into residential units and reportedly had a tentative contract with Ritz-Carlton to manage the Seville.
However, a July 30, 2009 lawsuit by investors against Defortuna claimed that Ritz-Carlton had pulled out of the deal, but the developer kept that secret from investors, according to the South Florida Business Journal.
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