The developable area of more than 260 acres in the heart of Orlando's tourism corridor owned by Georgia-based developer Stan Thomas face a new foreclosure lawsuit, some of which lie in strategic position to Universal Orlando's land assets.
An affiliate of Atlanta-based investment firm Ardent Financial filed a foreclosure request in Orange County Circuit Court on Oct. 18, demanding more than $27.6 million owed on eight parcels near the Orange County Convention Center's north/south concourse, and between International Drive and John Young Parkway. The Orlando Sentinel first reported on the case Thursday afternoon.
Within those parcels, the loan was made specifically for 82 upland acres found within about 260.5 gross acres, owned by Thomas Enterprises affiliates OHL Holdings and Universal City Property Management III (UCPM III).
OHL and UCPM III executed an original mortgage in July 2015 through Ardent Financial's affiliate AFF Universal, in the original amount of $27 million. In July 2016, those entities and Stan Thomas modified the loan agreement. They modified it a second time in January of this year, and a third time in mid-May.
After defaulting on their promissory note in June, AFF Universal is calling for Thomas' affiliates to pay more than $27.6 million in unpaid principal, plus accrued interest and legal fees.
The lender has placed a lien on the mortgage, wants a judge to foreclose, and then a deficiency judgment against Thomas affiliates if sale of the land doesn't cover its claim. The mortgage gives Ardent Financial a security interest in the properties.
A Thomas Enterprises spokeswoman told GrowthSpotter on Thursday evening that the company is now working with Ardent and a new lender to resolve the dispute.
The undeveloped parcels in question hold prime positions in the tourist corridor along International Drive and Destination Parkway.
Two small parcels along the unfinished segment of Destination Parkway lie next to land owned by Universal affiliate SLRC Holdings, which filed plans in late October to pave the land for 2,451 "temporary overflow" parking spaces.
The largest parcel in question (161.44 acres) is an oddly-shaped one that lies northeast of Universal Boulevard, and weaves between seven parcels totaling more than 517 acres of land Universal Orlando has amassed since December 2015. Most of this parcel is not developable.
Thomas also refinanced other properties in the tourist corridor with AFF Universal through mortgage modifications as recently as Aug. 23.
Various affiliates of Thomas still own more than 862 acres in the tourist corridor, many with different debt and equity partners involved.
In a separate lawsuit in Orange County, Thomas' UCPM III is asking a judge to place an injunction on Universal's land owner, SLRC Holdings, to block it from any theme park development.
That's because UCPM III holds the sole authority to approve or deny development plans on more than 2,126 acres that fall within the Universal Boulevard Planned Development zoning area.
Back in 2003, Thomas purchased the UCPM III corporate entity from then-Vivendi Universal, which came with 1,800 acres it owned. That included the "Master Declarant" rights, which UCPM III is responsible for to enforce covenants and rules of the PD.
When Universal sold the land and rights to Thomas, it included a rule that no other "entertainment/theme park" uses could be built there without the master declarant's sole permission. It was meant to protect Universal's two existing theme parks from competition.
Since then, UCPM III has turned away multiple entertainment developers that have pursued parts of the property.
A Thomas affiliate lost 474 acres of this land in lieu of foreclosure in August 2014 to Colony Capital, but retained the master declarant role. Universal's SLRC Holdings reacquired that land from Colony in December 2015, but the private entitlements still don't allow Universal to build a theme park there without UCPM III's permission.
Universal has zoning approvals from Orange County for theme park use on the property northeast of Universal Boulevard, but private entitlements trump a public Land Use Plan. Universal representatives have told Orange County staff of a vision for two new theme parks on the land, but the company has not announced specific plans.
To eventually develop that use, Universal will likely have to buy the master declarant rights from Stan Thomas, who would hold on to the role even if he lost more land to foreclosure.