Steven Carlyle Cronig (Aixa Montero)
Dealmakers:Steve Cronig, Ron Pena, Dan Zabludowski, Fernando Garcia and Ofonedu-Ime Goodwyn
The Deal: The legal team from Hinshaw & Culbertson’s Coral Gables office helped arranged a $120 million purchase and construction loan that will help redevelop a Fort Lauderdale condo-hotel that once carried Donald Trump’s name.
Details: Getting all the parties to work together on a big real estate deal has been compared to herding cats and directing rush-hour traffic.
To Cronig, closing on the $120 million loan partly meant to revamp the former Trump International Hotel and Tower was more like directing a symphony.
“I think you could say ‘orchestrate’ is an excellent word to describe the deal closing,” he said.
CFLB Partnership LLC, Cronig’s client, closed on the $115 million purchase of the unfinished building Dec. 19. The buyer plans substantial improvements to the 24-story oceanfront property at 551 N. Fort Lauderdale Beach Blvd. and rebrand the hotel component under Hilton’s Conrad name.
As part of the transaction, CFLB secured a $120 million loan from New York-based Ladder Capital Finance Holdings LLLP. The company plans $30 million in upgrades on the property, which was never completed.
Cronig led the financing component of the deal. Ross Manella of the Fort Lauderdale office and a Chicago attorney with the firm also assisted on the transaction. Hinshaw served as co-counsel to the buyer alongside Sergio A. Pagliery of Sergio A. Pagliery P.A.
Foley & Lardner represented the seller, 551 North FLB Marketing LLC. The lender’s counsel was DLA Piper.
“Every party that you add to the deal means that interests need to be adjusted not for two parties but for five parties,” Cronig said.
Interestingly, one thing that did not complicate the deal was the property’s storied legal history. The condo-hotel, nearly finished in 2009 during the nadir of the financial crisis, was foreclosed upon when original developer SB Hotel Associates LLC defaulted on its Corus Bank loan. A steady stream of lawsuits followed from would-be unit buyers who placed deposits on units that were never delivered. Some of those lawsuits are still pending.
“That had no effect on the buyer whatsoever,” Cronig said. “But doing the documentation for a $120 million construction loan is a considerable effort. When you’re administering a construction loan of this size, there’s a significant amount of checks and balances. There’s people monitoring everything that happens.”
Quote: “There were a lot of lawyers. There’s so many moving parts to a transaction like this, it’s always complicated,” Cronig said.
Background:Cronig concentrates in commercial real estate development and lender representation, representing developers in acquisitions and dispositions of property. Pena, Zabludowski and Garcia also are partners, and Goodwyn is an associate.