A sale contract worth $40 million or more on the 77-acre tract south of Artegon Marketplace may now be able to close following a Miami court ruling last Thursday, in which the land owner was found to owe nearly $4.3 million to Ecuador's government.
The property is one of 10 parcels totaling roughly 140 acres of vacant land north of the I-Drive/Kirkman Road intersection that should ripen for development over the next few years, as I-4 Ultimate construction brings an overpass to connect Universal Orlando and the northern end of International Drive.
First reported by GrowthSpotter on Dec. 13, the parcel at 5001 Vanguard St. has been targeted for seizure and liquidation by Ecuador, following a March 2015 fraud judgment by the United Kingdom's highest court now totaling more than $600 million against two brothers of an Ecuadorian banking family, the Ortega Trujillos.
A judge with Florida's 11th Circuit Court in Miami-Dade County ruled last November to domesticate that foreign court's judgment, setting the stage for asset seizure next.
Ecuador's Central Bank, which bailed out Nassau-based company Interamerican Asset Management Fund (IAMF) that the Ortegas created and defrauded in the mid-1990s, has stepped in to collect the fraud judgment. It's working with attorneys in the United States to go after any assets they can trace back to the Ortega brothers to satisfy the massive debt.
Those attorneys have been trying to prove ownership connections between the Ortegas and large Florida property holdings in Jacksonville, Naples, Estero and Bonita Springs, in addition to the North I-Drive parcel.
Over the past five months, IAMF/Ecuador attorneys have tried to prove that two Ortega brothers were linked to the Orlando parcel's owner entity, I Drive Investors LLC.
Their names were tied to the LLC from March 2005 when it bought the land parcel for $16.6 million through late 2014, when management of the entity changed and the Ortega connection disappeared.
The property has been under contract since November to a large out-of-state development group that may be eying a combination of hotel, timeshare and multi-family for the property, local real estate professionals with knowledge of the deal told GrowthSpotter in January.
That deal is still active, sources affirmed in recent weeks. In February, motions filed in the court case confirmed the property was under contract for approximately $40 million.
The potential buyer's name has not been divulged.
On May 5, a Miami-Dade Circuit Court judge decided the past ownership roles left an inextricable link between the Ortegas and the owner-entity. A final judgment was issued for IAMF/Ecuador to recover $4.292 million from I Drive Investors LLC and its full owner, Ecuadorian investor Ernesto Estrada, as part of the $600 million-plus judgment against the Ortega brothers.
Two of the Ortega brothers were original investors in the North I-Drive property, via multiple shell companies holding stakes in I Drive Investors LLC.
The circuit court judge agreed with evidence that Luis Alberto Ortega Trujillo transferred his 17.17 percent stake in the land ownership in late 2014 with the intent to defraud future creditors, just months before the March 2015 judgment was granted in IAMF's favor by the Privy Council of England, the UK's highest court.
The cash equivalent of Luis Ortega's 17.17 percent, $4.292 million, will now have to be paid by I Drive Investors, which is fully owned by Errata Florida LLC, an affiliate of Estrada. He was the Ortega brothers' main investment partner on the I-Drive property, before buying out their shares between 2013 and 2014.
Collecting that amount could be delayed further if Estrada's attorneys appeal. Attorneys for Estrada, the Ortega Trujillo brothers and IAMF/Ecuador did not respond to multiple requests for comment.
BARELY BREAK EVEN
While a $40 million pending sale price may seem like a windfall for Estrada, it may really produce a loss or break even on the investment at this point, his attorney argued in a February case filing.
I Drive Investors still owes $9.4 million on a property loan, as of February. The sale price may be further reduced by closing costs and commissions of about $2.5 million, and withholding tax on the transaction is estimated to be about $6 million, the attorney estimated.
Estrada's attorney argued the land owner may net $6 million or less on the potential sale. He can now subtract the additional $4.292 million sum owed to IAMF/Ecuador.
The property was previously rezoned and entitled for more than 60,000 square feet of retail and 2,000 residential units as part of the AquaSol mixed-use subdivision, in the years immediately following the 2005 land purchase.
Roughly $500,000 was invested by the owner to master-plan the property for dense mixed-use development, and to fully entitle the land with water management district permits and traffic certificates, said Steve Cissel, principal at FirstStar Development, who previously worked with the Ortegas.
It's now a PD-zoned property with all the necessary entitlements, ready for "whatever the market needs, from theme park to high-rise hotel, condos, retail or more," Cissel told GrowthSpotter last June.
No new development inquiries have been made or pre-app meetings held regarding the property since December, said a spokeswoman with the City of Orlando.