By now, the Mandarin Oriental hotel and condominium in Boca Raton was supposed to be a posh urban enclave where condo residents enjoyed golf course views from their luxury units, and hotel visitors lounged in restaurants or by the pool.

 

But seven years after the hotel and condo towers first began construction, they remain an unfinished eyesore in the city's downtown. Behind the scenes, there's a lot happening with the complex, but all of it is taking place in the courts. Both Mandarin Oriental towers, part of the $1.5 billion Via Mizner complex, are locked in litigation in Florida, New York and even U.S. Bankruptcy Court. The Boca Raton condo and hotel development is not affiliated with a Mandarin Oriental condominium planned in West Palm Beach by Great Gulf, a Canada-based developer. Instead, the south county project, at the northeast corner of Federal Highway and Camino Real, is affiliated with Boca Raton-based Penn-Florida Cos. The real estate firm is led by Mark Gensheimer. Back in 2015, Gensheimer described Via Mizner as an "urban oasis" for the downtown. The announcement was a coup for the city because Mandarin Oriental is a global luxury brand. But the branded hotel and condo still aren't completed, and construction has stopped. Both properties also are beset by lawsuits from vendors and lenders, even though court records say the condo has amassed $325 million in pre-construction sales. Condo prices range from $2 million to about $23 million per unit.

The unfinished Mandarin Oriental condo, left, and hotel, right, in downtown Boca Raton on Aug. 17. Construction has stopped on both towers and it's not clear when it will resume.

While new condo towers are popping up along the Palm Beach County coastline, the Mandarin Oriental stands as a stark example of the risk that buyers take when they park hundreds of thousands of dollars, or even millions, in pre-construction deposits before a building is ever finished.

Penn-Florida claims lender is to blame for delays

 

On Aug. 19, Elizabeth Cross, Penn-Florida's vice president of marketing, said the Mandarin Oriental condo is nearly completed with about eight months needed to finish "once construction resumes full speed."

Given the lawsuits, legal experts said it's not clear when that will happen.

In prior years, Penn-Florida has blamed construction delays on the COVID-19 pandemic and problems obtaining building materials. A lawsuit between the project's partners also scared off lenders for years, according to court documents obtained by The Palm Beach Post.

Now a New York state lawsuit, filed by Penn-Florida affiliates on Aug. 13, blames the lender for construction delays at the condo. The 88-unit tower is at 105 E. Camino Real.

In its New York state lawsuit, a Penn-Florida affiliate says its lender refused to fully fund a loan. The lawsuit against Via MIzner Lender 1 LLC and Via Mizner Lender 2 LLC, affiliates of New York-based Madison Realty Capital, claims Madison demanded it take control of the project's construction, the complaint said.

"Gross mismanagement" of the condo's construction ensued, resulting in unpaid contractors filing $44 million worth of liens, according to the lawsuit filed by Via Mizner Owner III LLC, the Penn-Florida affiliate that owns the condo.

A consulting firm official overseeing the condo's construction even was instructed by a Madison representative to "crush the project," the lawsuit alleged.

An attorney representing Madison said he could not comment on the case.
 

Mold, water damage at unfinished condo?

The Penn-Florida lawsuit paints a grim picture of the Mandarin Oriental condo's physical condition, however.

Work on the Boca Raton tower has stopped, and the lender has allowed water and mold damage to injure the property, Penn-Florida's lawsuit said. Since there's no money coming in, the property isn't being guarded by security, "leaving the project exposed to trespass, vandalism, liability, and theft," the lawsuit said.

The New York state lawsuit follows the July 17 filing of a $418 million foreclosure action by Madison against the condo's parent company. The foreclosure lawsuit was filed in Palm Beach County Circuit Court.

Despite the condo lawsuits, Penn-Florida's Cross expressed optimism the building's financial issues will be fixed.

"We expect the issues with the lender to be resolved in the near future and remain fully committed to completing this project for the benefit of our buyers, employees, key stakeholders and the broader Boca Raton community," she wrote in an Aug. 19 statement to The Palm Beach Post.

Condo deposits at risk at Mandarin Oriental condo

While the New York state lawsuit paints a vivid picture of the condo, it is the foreclosure action in Palm Beach County that is more important for buyers trying to recover their condo deposits, said Gary Nagle, a Juno Beach real estate lawyer not involved in the case.

That's because the lender has the dominant position in the foreclosure, and all other claims are secondary, Nagle said.

A lot of people are affected by the condo's foreclosure, which Nagle called "a freaking mess" that names 33 building contractors and 95 condo buyers.

These buyers range from Palm Beach philanthropists to top lawyers, financiers and business owners, including from the U.S. northeast.

Some of these buyers, tired of the delays, began filing lawsuits in 2024 to recoup their deposits. A few buyers were successful, but others still are in litigation.

On July 27, two more buyers filed a lawsuit.

Mel and Hillary Feinberg of Boca Raton are seeking to recover $2.6 million they paid as a deposit toward a $8.7 million unit. The payment was made when the contract was signed in February 2022, more than four years ago, their complaint said.

Other Mandarin Oriental condo buyers are holding tight, hoping the project eventually will be completed.

Cross said kitchens, flooring and bathrooms already are installed in many of the units.

For pre-construction buyers wanting out, recouping their deposits could depend on whether their money still is held in escrow, Nagle said.

In its New York state lawsuit, Penn-Florida raised doubts about that prospect, claiming the lender "directed that condo purchase deposits be used toward construction costs." The lawsuit didn't elaborate.

Hotel building in bankruptcy reorganization

Even as the Mandarin Oriental condominium is mired in lawsuits in two states, work continues on a financial restructuring of the 12-story Mandarin Oriental hotel, now in a Chapter 11 bankruptcy reorganization.

The unfinished hotel, which isn't even painted, owes its lender $140 million.

The tower will feature 164 guestrooms and suites, dining and entertaining venues, a spa and the private, members-only City Club, an important amenity for the condo next door. The hotel is at 103 E. Camino Real.

Penn-Florida's Cross said a recapitalization is nearing completion, and both Penn-Florida and its creditors are working on a financial solution.