Fort Lauderdale, Florida Marina Files for Chapter 11
Brandon, FL (Law Firm Newswire) October 18, 2012 - Fort Lauderdale Boat Club Ltd., recently filed for Chapter 11; the Boat Club had in excess of a reported $13 million in assets, with an estimated $10 million in liabilities.
Investors purchased the site for $16 million in 2006. Losses of some $3 million in just a few years, much of which likely occurred in or about 2008 when the national economy began to collapse, appear to have been too difficult to overcome.
Fort Lauderdale is home to numerous coastal areas, including many docks and residential slips for personal watercraft. Plans for a new marina there didn’t survive the Great Recession, however. The unemployment rate is at 7.7 percent, and while construction work is picking up, the economy is still stuck in a very slow recovery. Luxury items like leisure craft are not expected to be sold at a rate as in boom times, and docking facilities are finding they are not in high demand.
“It is unfortunate when large construction projects founder, because they have the potential to contribute a great deal to the local economy,” said Brandon bankruptcy attorney O. Reginald Osenton.
Much of what has damaged the national economy is related to issues in the mortgage industry, specifically the issuance of loans to the under-qualified and of loans too large to realistically be repaid. The mortgage-backed security has been an investment vehicle for decades, but the recent explosion in the creation of such investments played a role in many bankruptcies. Construction is a very large part of the Florida economy, and when housing starts slowed drastically, other types of construction, such as marinas, also dried up.
The twelve-acre marina was slated to have 330 dry slips. Such an ambitious construction project probably seemed viable when the economy was booming, but was cast in a much less favorable light post-recession. How the Chapter 11 filing is handled will impact the value of the property in the future. It may turn out that a mixed-use facility is built in the future after the state and national economy has recovered enough to support new construction.
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