Article Courtesy of The Boca News

By Dale King

Published August 1, 2009 

Developer Adam Schlesinger brought at least two attorneys, an architect and other officials to a special Boca Raton City Council hearing Monday night in hopes of salvaging his stalled Eden residential project by getting another permit extension.

It didn’t work. After more than two hours of talk, mainly by the Eden side, but also from an audience of people who live in the one condo building that’s finished and want Schlesinger to buy them out, the council gave it a quick and unanimous “no.”

Argument was vehement on both sides. Schlesinger vowed to buy back the condos when he gets his building permits, and “if and when” he can get financing.

That hesitation on pinning down the money element drew City Manager Leif Ahnell into the fray. He noted that Schlesinger, president of Boca East LLC, said he planned to restart construction by Nov. 1, hit the developer with a series of rapid-fire questions. “Do you have a contract to get the money?” Ahnell asked. Charlie Siemon, one of the developer’s lawyers, said “No.”

“You said there’s a hope? Ahnell shot back. “It’s more than a hope,” said Siemon. “We have a contractor ready to work.” “There’s a lot to be done to get started by Nov. 1,” the city manager said. Schlesinger said he is “close to” making a deal with an investor and a lender. But he said without building permits, it’s difficult to get money.

representing Schlesinger, said the law hones in on projects that have a permit from the South Florida Water Management District, extending them two years because of the slow economy. He said Eden has such a permit. Reagan also had a court reporter taking notes, indicating a court appeal could be in the making.

Eden, later renamed Pearl, began in 2003 as a proposed luxury condo with 248 units, according to testimony at the council hearing. It was to be made up of four buildings. Reagan said one is finished and has 27 remaining residents in it. Another building is “nearly finished” and the remaining two are cement skeletons.

Eden is to be finished as a rental complex.

Development Services Director Jorge Camejo said the buildings are secure, “though not aesthetically pleasing.” The city keeps close tabs through inspections.

The audience got an early indication the city might reject the Eden plea when Mayor Susan Whelchel, after listening to Reagan’s argument, said, “Have you ever heard the expression, ‘Same song, second verse’? We have heard these people before. We have given them plenty of extensions. There are people here that you agreed to buy out in the last request for an extension. What has changed?”

Cites ‘Misunderstanding’
Both sides attested to a “misunderstanding” over paying permit fees and providing information about the status of the project – a condition imposed on Boca East LLC in September 2007, when the council approved a two-year permit extension.

In April, Camejo notified Eden it was in danger of default for failure to keep the city apprised. A month later, he issued a notice of default.

But Reagan, who used slides showing timelines and emails, said there was constant communication between the city and Eden representatives. Schlesinger talked of a hasty ride from West Palm Beach to Boca to deliver a $108,000 check to cover fees. The city had calculated the number at $300,000, and rejected Schlesinger’s payment.

It appears the building permits for the project were ready, but the $108,000 wasn’t enough to pay for them. Reagan said no one at Eden knew they were ready, which is why they brought insufficient money. Reagan also said some of the $300,000 was not due until later.

Schlesinger said he has been talking to lenders but has found it difficult to get a written loan commitment without a building permit.

   
“We are prepared to get financing and move forward” with a plan to turn the condos into rentals, said Reagan.
  
“Everyone will be bought out if and when we get financing.
The fastest way to be bought out is if permits are in place. Anything else is a delay.”