Four years after gaining approval for a 354-unit luxury apartment tower in North Miami Beach, developer Celal Ozkan has lost control of the site following bankruptcy proceedings. The nearly one-acre property at 16300 Northeast 19th Avenue will be handed over to Safe Harbor Equity, a Miami Beach-based lender that had issued an $8.5 million loan for the project in 2022.
The transfer was approved last week by Federal Bankruptcy Court Judge Laurel M. Isicoff in Miami, allowing Safe Harbor’s distressed debt fund to take ownership of the site. The bankruptcy auction originally scheduled for September 26 was canceled, reportedly due to a lack of qualified bidders who were required to offer at least $4.55 million.
Chris Spuches, attorney for Safe Harbor, commented on the outcome: “This is a fantastic property that we are excited to work with a developer to sell this asset,” adding that Safe Harbor does not intend to develop it themselves.
CEO Contract, led by Ozkan and based in Istanbul and New Castle, Delaware, acquired the vacant parcel in 2022 for $5.2 million through its affiliate Sky Gardens Residences. The firm received final approval for a 20-story apartment tower named Sky Gardens Residences with rooftop amenities in 2021; however, construction never commenced.
Financial troubles began after CEO Contract secured an $8.5 million loan from Safe Harbor at an interest rate of 8.75 percent with options to extend. Court documents indicate that CEO Contract defaulted on payments due in August 2022 and January 2023 and did not pay full taxes owed for 2022. A subsequent agreement allowed CEO Contract to reduce the principal owed and extend the loan term.
Legal disputes followed as CEO Contract sued Safe Harbor last year in Miami-Dade Circuit Court, accusing them of usury and contesting claims about defaults and tax payments. The developer also alleged that Safe Harbor imposed excessive fees and pressured them into unfavorable agreements.
Safe Harbor countersued seeking foreclosure while reiterating allegations of payment defaults by CEO Contract.
In January this year, CEO Contract filed for Chapter 11 bankruptcy protection, which halted ongoing lawsuits between both parties.
Court filings appraise the North Miami Beach property at $18 million; if completed and leased up as planned, its value could reach $161 million. When transferred to Safe Harbor Equity, the property will be free from liens except for an outstanding Miami-Dade tax lien totaling $114,000 related to property taxes due for 2024 and 2025.
Attorneys representing CEO Contract did not respond to requests for comment on the matter.
