Palm House May Sell to London-Based Company

A new plan is in action to sell the still-unfinished Palm House property in Palm Beach to a buyer linked to a major London-based real estate investment firm that specializes in resort and commercial developments worldwide, as first reported by the Palm Beach Daily News.

A new court filing shows that a company controlled by London + Regional Properties has agreed to pay $39.6 million for the property if the sale gets approved by a bankruptcy judge.

That’s $8 million more than the selling price guaranteed in a bankruptcy auction scheduled for March 8, and about $34.5 million more than what would have been paid in cash as part of a failed settlement agreement to sell the property to its former owner, Wellington developer and private lender Glenn Straub. That proposal was scuttled by a federal bankruptcy court in early February. 

The same judge was expected to review the latest proposal sale at a hearing in West Palm Beach on Feb. 28. If approved, proceeds from the sale will go to paying Palm House creditors who have filed claims totaling millions of dollars. These creditors include dozens of foreign nationals—mostly Chinese—who invested $500,000 each in the Palm House project though the federal EB-5 program in hopes of getting expedited green cards. 

Palm House May Sell to London-Based Company

Last fall, Judge Erik P. Kimball approved the auctioning off of the Palm House property. Under the plan approved at that time, an entity closely associated with The Related Cos. would buy the property for $32 million unless the bidding in the auction exceeded that amount. The Related Cos. entity assumed the role of so-called “stalking horse” bidder in the auction. 

But, according to a document filed Tuesday, if the “private sale” goes through, the auction will be cancelled.  

In an email Tuesday to the Palm Beach Daily News, currency owner of Palm House Cary Glickstein described London + Regional Properties as having a “significant international footprint that includes many resort hotels and commercial property investments. We have been discussing and negotiating for several months, as they did not want to be in a stalking horse position, preferring to see how the litigation uncertainty became clearer.”

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Glickstein added that The Related Cos. may not be out of the picture. The company could submit a competing offer of at least $40.6 million to remain in consideration to buy the Palm House property. Offers could go even higher if the competing company counter-offers.

If the Related Cos., owned by Palm Beach resident and owner of the Miami Dolphins Stephen M. Ross, is shut out of the sale, it would be paid a $350,000 “breakup fee” according to its stalking-horse contract.