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Theme park developer pursues Artegon land & neighboring I-Drive properties

Theme park developer pursues Artegon land & neighboring I-Drive properties
Highlighted in blue are the 104.47 acres of Artegon Marketplace land owned by Lightstone Group, and immediately south outlined in red is a 77.3-acre parcel owned by an Ecuadorian investor. (Orange County Property Appraiser / staff edit)

A large U.S. theme park developer with international partners is pursuing the 104 acres of Artegon Marketplace on N. International Drive, and wants to pair it for redevelopment with outparcels and 77 acres directly south owned by an Ecuadorian investor, commercial real estate sources with knowledge of the talks have told GrowthSpotter.

The prospective buyer is one with no theme park presence in Orlando now, and would develop separate theme and water parks with hotels on what could top 200 acres, according to sources who requested anonymity, because they're not permitted to discuss the negotiations.

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Artegon's owner, New York-based Lightstone Group, hired CBRE Orlando's land services team led by Robert H. McEwan to begin marketing the 104-acre property for sale, GrowthSpotter first reported Aug. 23.

Land services brokers with CBRE did not respond to requests for comment this week.

Price discussions began in the past month with the theme park group for the property. It's one of a handful of prospective buyers for the shopping mall that sources declined to name, but say have mixed-use redevelopment interest.

The Artegon property's northeast frontage on the Florida Turnpike is a draw for the visual exposure it could offer towering theme park rides. The site's proximity to the new I-4 Ultimate flyover bridge expected to open in Summer 2017 is also key, which will link adjacent Oak Ridge Road to Caravan Court across the interstate, a block from one of the main entrances of Universal Orlando.

All the Lightstone land, independent outparcels and Ecuadorian land total more than 213 acres, putting it on par with the 209 acres combined that Universal Studios Florida and Islands of Adventure occupy (not including back-of-house buildings, related hotels or Universal's CityWalk). SeaWorld Orlando's theme park covers about 196 acres.

CBRE is expected to issue a call for offers on Lightstone's 104-acre property in mid-November, but prospective buyers may attempt to beat that offering date.

AN ASSEMBLAGE INTEREST
Michael Aviles, a New York-based attorney who bought the Bass Pro Shops-anchored parcel within Artegon in December 2015 for $17 million, told GrowthSpotter on Thursday an Orlando real estate agent has contacted him recently to gauge interest in selling to whoever buys the surrounding Lightstone land.

"I told him everything is for sale at the right price, but for me this is a long-term hold, and my belief is that the Orlando market is strong and will continue to be so," said Aviles, who was unable to recall the agent's name.

Other Artegon outparcels sold within the past year by Lightstone include the 6.27-acre Cinemark Theater parcel to Arizona-based STORE Capital, and 4.14 undeveloped acres to an affiliate of Orlando-based Millenia Partners planned for three restaurant lot leases.

Brian Grandstaff, principal with Millenia Partners, said Friday his group has not been contacted about selling its 4.14 acres, and is proceeding with construction soon on the first restaurant, a Pollo Tropical.

The attempt by a buyer to pair Artegon property with the unlisted 77-acre parcel to the south was confirmed on Thursday by that property's listing agent.

"We have been contacted recently with the message of a buyer interested in combining the properties, but talk is cheap until an offer comes," said Eduardo Avila, president of Key Realty Advisors in Coconut Grove, who held an initial stake in the ownership entity but has divested. "We are putting the (77 acres) on the market at $45 million."

ECUADORIAN LAND HISTORY
Located at 5001 Vanguard St., the 77-acre parcel had been targeted for seizure and liquidation over the past year by Ecuador's government, following a March 2015 fraud judgment by the United Kingdom's highest court totaling more than $600 million against two brothers of an Ecuadorian banking family, the Ortega Trujillos, GrowthSpotter first reported last December.

Followup stories in January and May of this year reported that an unknown buyer had a $40 million contract on the 77-acre property.

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That contract was terminated within the past month, and was with a buyer from "the west coast of Florida" that was planning a mixed-use development with retail and vacation rental homes, Avila said.

In May, a judge in Miami-Dade's Circuit Court decided that past ownership roles linked the Ortegas to the 77-acre tract's owner, I Drive Investors LLC, now fully owned by Errata Florida LLC, an affiliate of Ecuadorian investor Ernesto Estrada.

Estrada was the Ortega brothers' main investment partner on the I-Drive property in 2005, before buying out their shares between 2013 and 2014.

As of July 6, Estrada's two LLCs owed more than $4.7 million to Ecuador's government after the court ruling. They are appealing the decision, but agreed to pay the sum if the appeal is lost, filing a supersedeas bond in Miami-Dade's Circuit Court.

BUILDOUT POTENTIAL
After I Drive Investors LLC bought the 77 acres in 2005 for $16.6 million, it invested roughly $500,000 more over the following year to master-plan the property for dense mixed-use development, and to entitle the land with permits from the South Florida Water Management District and Army Corps of Engineers, as well as traffic certificates.

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," Steve Cissel, former development agent for the Ecuadorian owners, told GrowthSpotter in June 2015.

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The site came close in 2011 to being developed as Orlando Thrill Park, a roller coaster and amusement park by The Baker Leisure Group. Homeowners in neighboring Tangelo Park fought the proposed park over concerns of noise, traffic and property depreciation. In April 2011, Orlando's Municipal Planning Board denied zoning and land-use approvals needed for the park to be built.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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