GlobeSt.com UPDATE: EB Developers Buys Shuttered Delta Resort for $28M

EB, headed by Elie Berdugo, a South Florida developer of mixed-use enterprises, plans to demolish the site's structures and redevelop the property as a multimillion-dollar residential and retail enclave at 5715 W. Major Blvd., near the Universal Orlando theme park, according to Chicago-based Cohen Financial.

Cohen Financial negotiated for the seller, CanPartners Investment IV Orlando LLC, an affiliate of Los Angeles-based CanPartners Investments IV LLC. Michael K. Scheiner, EB Developers' due diligence coordinator, represented his firm.

Ronald C. Muzii Jr., a director in Cohen Financial's Boca Raton office, closed the sale July 29. The key to doing the deal at all was marketing the property as a mixed-use site and not as another redeveloped hotel, Muzii tells GlobeSt.com. "The land in this situation was obviously more valuable than the buildings themselves," Muzii says.

He estimates the per-acre price of $1.1 million is "probably the highest paid" in Central Florida for a bulk land purchase. One-acre corner tracts on International Drive have sold for $1 million per acre for the last 10 years, industrial brokers who have done deals in the south Orlando submarket tell GlobeSt.com. Bulk land sales of 10 acres or more generally go for a lesser discounted amount.

"Cohen Financial was awarded the listing when they convinced the seller that the highest and best use was not as a hotel redevelopment as other brokers proposed, but as a residential mixed-use project," says Muzii who first started working on the deal in summer 1999 when he was an executive with the former Promus Hotels Corp. of Memphis.

"Many experts saw this as a hotel redevelopment, but our research indicated the zoning and market called for a new approach," Muzii says. "We saw this as a residential land sales from the beginning and the market proved us right." He says the Delta Resort site "offers one of the most important mixed-use development opportunities in the Orlando area."

Muzii and his associates, John Simon, Paul DeKruiff and Brian Pohl, contacted "several hundred prospective buyers and received numerous offers." Muzzii adds, "You can't believe the creative uses that were proposed" for the 26 acres. He says "we're still receiving phone calls on the property today."

He credits the purchaser "with the vision, resources and development skills believed to be critical for making this deal a reality. We were pleased with the level of interest from the investment community, but we were ultimately convinced we needed to select a buyer who could put together a complicated transaction in a short period of time."

For EB Developers, handling complex deals is standard operating procedure, South Florida brokers who have done business with the firm tell GlobeSt.com. Berdugo is a former developer of high-rise apartment buildings and single-family homes in Israel. He relocated to Boca Raton in 1991 and founded EB Developers Inc. in 1993. Berdugo Homes is the custom-home division of EB Developers. The company has over $1.5 billion in sellout value projects under development, according to its website.

CanPartners Investment IV Orlando LLC filed a foreclosure suit in Orange Circuit Court in January 2003 to recover $26.9 million in debt owed by former Canadian owners, Universal Partners LLC, headed by Laila Whitwicky, as GlobeSt.com previously reported. CanPartners became involved with the property by buying a $17.5-million loan on the hotel from Fort Lauderdale-based Bank Atlantic after the bank foreclosed on the asset.

CanPartners Investment IV, another subsidiary of Canyon Capital Realty Advisers LLC, held a $5.7-million second mortgage on the property at that time. Universal Partners purchased Delta Resort Jan. 29, 2001 for $26.88 million or about $36,250 per room, as GlobeSt.com previously reported. Universal Partners principal Whitwicky had tried to obtain acquisition financing for the hotel in 1999 from Promus Hotel Corp. where Cohen Financial's Muzii was working and first became acquainted with the property.

Whitwicky was unable to obtain financing from Promus. "The stars didn't line up for her at that time," Muzii tells Globest.com. "Hilton had purchased Promus in September 1999 and 9-11 came along in September 2001." He says, "You might say I've been working on this deal for six years, from summer 1999 to summer 2005."

Muzii says Delta Resort's land has quadrupled in value over the past six years. For example, Orange County Property Appraiser Bill Donegan put the land's market value at $7.3 million or $292,000 per acre ($6.70 per sf) in 2003, as GlobeSt.com previously reported. He appraised the resort's 11 buildings at $8.97 million.

Universal Partners is not associated with Universal Orlando's current ownership group.