Key West Citizen - 02/25/2010
A Wisconsin bank has foreclosed on the ill-fated Harbor House condominium development on Key West’s Caroline Street, and the property is scheduled to be sold on the courthouse steps Tuesday morning.
Construction of 32 luxury town houses stalled more than a year ago in the wake of the real estate market crash and economic downturn. One model home stands in the midst of an empty lot surrounded by a controversial, 8-foot construction wall.
The project, originally called Watermark, became a center of controversy in 2005, even before construction began. Neighbors objected to the size of the proposed development, saying it was out of scale with the surrounding community. The plans went through several incarnations before gaining the city’s approval.
The property, and its corresponding transient rental licenses, which also will be sold on Tuesday, are owned by Caroline Street Partners. The development company bought the property in several parcels between 2004 and 2007 for about $23 million, according to the Monroe County Property Appraiser’s records.
A judge issued the final order of foreclosure on Jan. 27, and then on Feb. 5 denied Caroline Street Partners’ motion for a rehearing, according to an employee in the Clerk of Court’s office, who asked that her name not be used as she wasn’t authorized to speak about the case.
“So as of now, the foreclosure sale is still set for [Tuesday],” she said, adding that such sales often are canceled or postponed at the last minute for a variety of reasons. “Delays are very common.”
The sale is scheduled to take place at 11 a.m. Tuesday on the courthouse steps on Whitehead Street, but outside bidders or buyers are very rare in the case of foreclosure sales, which differ from public auctions.
“There are always very few outside bidders; the property almost always goes to the plaintiff,” the woman said.
In this case, the plaintiff is M I Marshall and Ilsley Bank in Wisconsin.
The bank that holds the mortgage on a foreclosed property already has invested large sums of money in it, and therefore has a credit toward the purchase price, she said.
Representatives of Caroline Street Partners and M I Ilsley Bank did not return phone calls Wednesday.
