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MIAMI BEACH, FL-The beleaguered Charles Hotel, possibly one of the last truly developable properties in the trendy South Beach district, goes to auction on Dec. 19.

Under supervision of a state trial court order, Pompano Beach, FL-based Fisher Auction Co. Inc. will sell the property to the highest bidder, with each participant required to present a $500,000 cashier’s check. The checks are returned after the auction to unsuccessful bidders.

The court order comes as condominium owners in the six-story, 50,000-sf foot property agreed to relinquish title to individual units in exchange for an equity interest in the property, Louis B. Fisher III, Fisher Auction president, tells GlobeSt.com.

The Charles Hotel underwent a condo conversion in 1992. “There were several units presold prior to the conversion,” Fisher says. “During that time, however, the original developer encountered financial problems, and certainly did not perform his part of the contractual obligations as to the renovations.”

Subsequently, those owners succeeding in pushing the property into receivership through a state trial court action. When the case stalled in the state court, the owners brought a bankruptcy action against the property in hopes the federal courts could negotiate a resolution.

“They were not successful,” Fisher says. “So they abandoned the case and went back to state court.”

It took some creative thinking, Fisher says, but the attorneys representing the condominium owners, all eager for a resolution, came up with the idea of making them equity partners in the property.

“It’s a little bit unusual,” he says. “It makes sense from a marketing aspect to sell it as one asset. There is a court order that states that it will be sold as one unit of sale, and a new purchaser will have title free and clear of all liens and encumbrances.”

However, time is working against the cooperative group of new owners who own a piece of a hotel that has 118 units, two penthouses and six retail spaces.

“Some of the tax deeds have been purchased,” Fisher says. “The third year of tax deed will be approaching June first next year for some of the properties. If we don’t get it closed, with the tax-deed purchase in the third year, then they lose their percentage and rights to the property.”

Nevertheless, Fisher is cautiously optimistic about the sale he is marketing across his Internet website (www.fisherauction.com).

“The property literally is one of the last remaining development sites on South Beach,” he says. “I think one very good aspect about this property is that it’s zoned for mixed-use. It allows for commercial, retail, office, hotel, a boutique hotel, condo-hotel or even apartment hotel.

“Without the events of Sept. 11, we probably would be farther ahead than where we are now,” Fisher adds. “I’m not sure so anymore. There will be hotel buyers, but it will be more narrow than wide.”

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