Thursday, April 28, 2011

Columbus Dispatch and Business First: Developer of failed Ibiza condo project files for bankruptcy



Columbus Dispatch Story is here

Among those Apex Realty owes: 60 prospective buyers

Thursday, April 28, 2011 10:27 AM

The Columbus Dispatch

Apex Realty Enterprises, the developer of the failed Ibiza condominium project in the Short North, has filed for bankruptcy protection.

The company, which also developed the Dakota condominium building in the Short North and owns nightclubs and restaurants, cited assets between $1 million and $10 million and debts between $10 million and $50 million.

Apex listed as its largest debt $5.1 million to the Community Loan Fund, which loaned the company money to get started on the project, which was to have been the Short North's larges condominium project, with 135 condominiums in two 11-story towers on the corner of High Street and Hubbard Avenue.

The company also owes Berardi & Partners architectural firm $503,312, along with several other service providers. In addition, Apex owes about $1 million to an estimated 60 people who put down deposits for condominiums that were never built.

About 20 of those would-be buyers have sued the company and its principals, Raymond Brown, Michael Council and Rajesh Lahoti.

The partners unveiled Ibiza in 2006 as "the embodiment of an idealized city life." Among the planned amenities were a roof-deck pool, concierge service, attached parking and a fitness center.

Less than two years, later, they started taking deposits for the units, which sold for $159,999 to $1,549,999. Most buyers placed 5 percent down on their units.

But by the end of 2008, as the housing market further eroded, the project's largest proposed lender, Huntington Bank, lost interest in the project. Apex and its sister company, Arms Properties, continued to look for suitors but none came forth.

Last summer, Apex announced that it was working with investors to convert the project to apartments, but that plan also fell through, and last month, Columbus Schiff Capital Group took over control of the site.

jweiker@dispatch.com


The Business First Story is here

Developer of failed Ibiza project in Short North seeks bankruptcy protection

Date: Thursday, April 28, 2011, 2:16pm EDT - Last Modified: Thursday, April 28, 2011, 2:42pm EDT

Mounting bills and lawsuits have the developer of the failed Ibiza condominium project seeking protection in U.S. Bankruptcy Court – just as would-be buyers were scheduled to begin giving sworn statements for lawsuits seeking return of their deposits.

Apex Realty Enterprises LLC, an affiliate of the Short North’s RMRW Ltd. development firm, filed for Chapter 11 bankruptcy Wednesday in Columbus, listing liabilities $10 million to $50 million and assets of less than $10 million.

The filing comes 15 months after the developer abandoned plans to build 135 condos in an 11-story tower and attempted to convert the project into apartments.

Apex Realty principals declined to comment on the filing through an email from their Columbus attorney, Myron Terlecky. Columbus attorney Brian Laliberte, who represents several buyers trying to get deposits back, said the filing came the day before the first depositions in 10 lawsuits were due to begin.

“It’s a clear attempt to avoid answering for the fraud we allege they committed,” Laliberte wrote in an email to Columbus Business First.

Columbus investor Michael Schiff last month announced plans to buy the project’s $4.8 million mortgage from the Finance Fund, a lender that uses federal tax credits to spur investment in distressed “new markets” such as urban neighborhoods.

That transaction has not closed, according to public records. Schiff did not immediately return messages seeking comment.

The Finance Fund’s Community Loan Fund New Markets II LLC affiliate is listed in the bankruptcy filing as a $5.1 million creditor, with $3.1 million of that considered secured debt. Unsecured creditors include the Columbus architectural firm of Berardi & Partners Inc. at $503,312. That debt is listed as “contingent” and “disputed” in the filing.

A full schedule of secured debts was not filed. Among those expected to be in the list is $550,000 in past due property taxes, late fees and other penalties that the Franklin County Treasurer’s office has sought through two actions in Franklin County Common Pleas Court.



Ibiza condo project

Short North developer files for bankruptcy

Friday, April 29, 2011 03:08 AM

THE COLUMBUS DISPATCH

Apex Realty Enterprises built a string of Short North condominiums, but the company was undone by a project that never got off the ground.

Apex filed for bankruptcy this week, after failing to build its most ambitious project: the proposed 11-story Ibiza condominiums at N. High Street and Hubbard Avenue. The company listed assets of between $1 million and $10 million and debts of more than $10 million in its filings.

Creditors, including 60 people who put an estimated $1 million down on condominiums that were never built, will now take their case to bankruptcy court.

An attorney representing Ibiza investors also will continue to press his fraud case against the company, but now before a bankruptcy judge.

"The bankruptcy petition really only changes the forum in which we're going to pursue Apex and its partners and employees," said Brian Laliberte, who represents 17 clients who put down deposits on the project. "Our claims remain the same. We believe fraud occurred in the Ibiza development."

Apex and its sister company, ARMS Properties, unveiled Ibiza in 2006. It was the largest project tackled by Apex's four partners - Raymond Brown, Michael Council, Rajesh Lahoti and Wilbur Ischie - who also developed the Dakota and several smaller condominium projects.

Ibiza was to be a residential gem in the Short North: 135 condominiums in a gleaming tower with a roof-deck pool, concierge service, attached parking and a fitness center.

In early 2008, as the Columbus condominium market started its decline, the developer began taking 5percent deposits for the units, which sold for $159,999 to $1,549,999.

Laliberte's clients contend that Apex partners continued to accept deposits and present the condos as successful even though they knew the project had lost funding and would not proceed.

In an exhibit filed in one of his cases against Apex, Laliberte included a January 2010 email exchange between Council and Brown discussing how to respond to a client demanding his money back.

According to the filing, Brown wrote, "We should work on replies tomorrow."

Council responded: "Yes! We need a standard reply. We need to talk to (attorney) Tom Allen or someone as now we are going to start lying."

Laliberte said he thinks the principals of Apex and its related companies enriched themselves at the expense of condo investors.

Calls to Apex and ARMS offices went unanswered yesterday. Myron Terlecky, a Columbus lawyer who represents Apex in the bankruptcy filing, declined to comment.

After funding for the condominiums collapsed, Apex sought investors to convert the project into apartments. That effort failed as well, and last month, Columbus developer Schiff Capital Group took control of the site.

In addition to its condominium developments, Apex and its related entities have interests in several nearby properties including the Union Cafe, 782 N. High St.; Havana, 862 N. High; Axis Nightclub, 775 N. High; and commercial buildings in the 800 block of N. High.

Apex listed as its largest debt $5.1 million to the Community Loan Fund, a Columbus-based nonprofit group that helps fund projects in low-income areas. Other creditors include Berardi & Partners architectural firm ($503,312), Walker Parking Consultants ($97,591), the Simon Group Limited Partnership ($74,750) and Ruscilli Construction Co. ($40,000).

jweiker@dispatch.com


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