San Sebastian in foreclosure
The Devlin Group owes $22M on project
By KATI BEXLEY
kati.bexley@staugustine.com
Publication Date: 12/05/08
San Sebastian Harbor Resort's owners, The Devlin Group Inc., are in foreclosure with Wachovia Bank after owing about $22 million in the $200-million project located in downtown St. Augustine.
Wachovia Bank, National Association, filed the suit on Nov. 17, but The Devlin Group CEO Wally Devlin has not yet been served, according to court documents. From the date the suit is filed, there is an 120-day deadline for the other party to be notified.
Devlin is out of the country on his boat and told The Record he still has plans for the project. He's working on getting funding from sources in other countries because United States' banks aren't lending money right now, he said. He's trying to replace the funding he received from Wachovia. He said Wachovia is passing his debt to another bank because it was sold to Citigroup after financial troubles. Devlin was adamant his project is not in foreclosure.
"If they try to foreclose I will not legally go down without a fight," he said.
City Attorney Ron Brown reviewed the court documents and said, "This is definitely a foreclosure."
"If Wachovia sold the note on the place, then the new party could decide to continue with the foreclosure suit or cancel it," he said. "But that doesn't change the fact a foreclosure has been filed. That's just a possible solution."
Two other companies who own portions of the property, who are not in foreclosure, also now cannot move forward with the project. Matt Merritt started the San Sebastian development with his partner Rich Newton about four years ago and sold most of the property to The Devlin Group. Merritt and Newton kept a piece of the site to build a retail loft building and the company Grunthal and Schueth Properties, Inc., planned to build retail shops. However, they were both waiting for Devlin to put in the site's infrastructure.
"We're ready to build it," Merritt said. "We just can't move forward now. I don't know how long the project will be on hold."
The Devlin Group was to build a Westin hotel on the 13-acre site along the San Sebastian River. The hotel would have included a luxury spa and retail shops. Also on the site was to be upscale condominiums called The Residences at The Westin St. Augustine, and a 65-slip marina with a boardwalk promenade.
Downtown merchants, city staff and City Commissioners had thought the upscale project would enhance that area of King Street and revitalize the western corridor to the city from Ponce de Leon Boulevard, a main thoroughfare.
Mark Knight, city planning and building department director, said he was "disappointed" to hear about the foreclosure.
"(The site has) been sitting there so long as a potential project," he said. "I hope the project will still go forward eventually."
The city bought the property in 1986, Knight said, and sold it to Merritt and Newton in May 2004 for $3.6 million.
Merritt pointed out that Devlin already completed the marina and had always been "good partners." He said Devlin put about $22 million into the site, about four times what he paid for it. And Devlin especially spent a large amount of time and money on cleaning the property.
The land was originally used as the St. Augustine Gas Site, a manufactured gas plant, from 1885 to the late 1950s. As a result, it was contaminated with coal tar, a by-product of the gas production process. Several federal agencies, including the Environmental Protection Agency -- helped clean up the Superfund site,
Merritt said he was "frustrated" the project is stalled, but that he will do "whatever I can to make sure this project is completed." Westin is still signed on to do the project, but they provide no financial backing, Merritt said.
"(Devlin) did everything first-rate, first-class. They got Westin to sign on to the project. I hope they can somehow pull out of this," Merritt said. "We are determined to see (the project) through no matter what."
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2 comments:
It must really not be in forclosure! Wally said so. Perhaps he is working remotely on his satelite phone. I am sure he is working very hard even if hes sick with 104 fever. Perhaps his good friends Micheal Dell,Bob Toll,Elton John,Warren Buffett,The CEO of Westin, or his billionare investor from overseas will bail him out. The sky is not falling people, gas is only 2.00 a gallon. we can always swoop downs and pick up the other part of the billion dollar devlin empire. Perhaps a loan from the Elton John red piano bar enterprise will do it. I am sure wally has the exclusive rights to this otherwise the calander of the deal or no deal girls will work.
It must really not be in forclosure! Wally said so. Perhaps he is working remotely on his satelite phone. I am sure he is working very hard even if hes sick with 104 fever. Perhaps his good friends Micheal Dell,Bob Toll,Elton John,Warren Buffett,The CEO of Westin, or his billionare investor from overseas will bail him out. The sky is not falling people, gas is only 2.00 a gallon. we can always swoop downs and pick up the other part of the billion dollar devlin empire. Perhaps a loan from the Elton John red piano bar enterprise will do it. I am sure wally has the exclusive rights to this otherwise the calander of the deal or no deal girls will work.
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