Developer Dan Kodsi has been given a deadline of just over two months to pay more than $35 million to Monarch Alternative Capital, the lender for the Legacy Hotel & Residences project at Miami Worldcenter. The order, issued by Miami-Dade Circuit Court Judge Spencer Eig, would allow Kodsi’s entity, Legacy MWC Trustee, to satisfy the mortgage on the downtown Miami property.
The court’s decision grants an emergency injunction that is necessary for Kodsi to pursue refinancing options. During a July 31 hearing, Kodsi, who is CEO of Royal Palm Companies, said he is working on securing $390 million in new financing.
Monarch Alternative Capital took over the loan from Silverstein Capital Partners on June 6. In early July, Monarch filed a foreclosure lawsuit alleging that the developer owed $31.9 million in unpaid debt related to the partially completed 50-story mixed-use tower at 942 Northeast First Avenue in downtown Miami.
Construction on Legacy stalled last year. The planned building includes 310 condos designed for short-term rentals, a 219-room hotel and a Blue Zones medical and wellness center. Condo sales began in 2019 and were completed during the pandemic with an estimated $160 million in sales.
According to Judge Eig’s order dated August 22, both parties agreed that the developer must post a $32 million surety bond within one month. Within 75 days—by about November 5—the developer must pay approximately $35.1 million plus any accrued interest and late fees. If these requirements are met, Monarch will be required under Florida law to release its claim on the mortgage.
All parties involved have declined comment due to a gag order imposed by Judge Eig prohibiting public statements about the case.
Kevin O’Grady of Concord Summit Capital has been hired by Kodsi as chairman to help secure financing for Legacy Hotel & Residences. O’Grady stated during the July hearing that potential lenders have been identified and that new funding could include $235 million in C-PACE financing and $160 million from Sculptor Real Estate (likely referring to Sculptor Capital Management).
Monarch is seeking a total of $67.5 million from Kodsi’s group, which includes various fees and interest as well as a return differential calculated based on full funding of what was originally intended as a $290 million note; this amount is due next June according to counterclaims filed by Royal Palm Companies.
Kodsi’s firm has previously worked with Monarch Alternative Capital on other projects including Coco Beach and another development in Puerto Rico. In legal filings, Royal Palm alleges misconduct by Monarch involving fraudulent misrepresentation and bank fraud related to efforts targeting equity interests in its Coco Beach affiliate before focusing attention on Miami Worldcenter.
Silverstein Capital Partners initially provided up to $340 million in construction financing for Legacy at the end of 2021 but only funded about $30 million according to statements made by Kodsi during court proceedings.
If refinancing can be secured within the allotted time frame, construction may resume at Legacy Hotel & Residences. Kodsi has previously indicated that affiliates of Royal Palm Companies hold more than $140 million in equity stake while condo buyers have placed around $50 million in deposits toward units.
Legacy Hotel & Residences forms part of Miami Worldcenter—a larger master-planned development spanning 27 acres with an estimated value of $6 billion overseen by CIM Group, Art Falcone and Nitin Motwani through their joint venture Miami Worldcenter Associates. Other developers have acquired sites within this project area; Royal Palm also developed Paramount Miami Worldcenter which was finished in 2019.
