An affiliate of South Florida-based developer BTI Partners has raised $55.26 million in tax-exempt bonds to fund the next year of renovation and construction at its 878-unit condo hotel The Grove Resort & Spa.
The bonds were sourced from Miami-based FMSbonds, Inc., and will help fund the current construction of a seven-acre water park, upcoming renovation of the remaining 560 units yet to open, and the now finished parking garages and infrastructure on the property.
The bonds are backed by special tax assessments levied on the resort land, which lies within The Grove Community Development District.
Located in southwest Orange County, north of the intersection of Avalon Road and U.S. 192, the 106-acre Grove Resort property borders Lake Austin, less than four miles from Walt Disney World's western gate.
The Grove is being redeveloped in phases by The Grove Resort and Spa, LLC, a joint venture between entities owned by funds that are managed by real estate investment manager Westport Capital Partners, and BTI Partners.
Originally developed in the 2000s as the Grand Palisades Resort, the property sat vacant for seven years and was the largest foreclosure in Central Florida history during the Great Recession before BTI Partners acquired it, the Orlando Sentinel has reported in recent years.
The Grove's first phase of 106 condo units was opened in March of this year, and now approximately 280 units are open and operating as a hotel, BTI managing partner Noah Breakstone told GrowthSpotter on Monday.
"The water parks was a portion of the debt raise, that's under construction as we speak and will be completed in January 2018," he said. "Phase 2 (another 280 units) should be opening by March 2018, and then a final phase of 280 renovated units will follow."
With each unit offering two or three full bedrooms, The Grove will boast about 2,200 bedrooms total when fully reopened. A series of connected seven-story condo buildings total 2 million gross square feet, or 1.3 million square feet of rentable area.
Total cost through buildout of all The Grove's condo units, infrastructure and amenities is expected to top $225 million, Breakstone said. Financing for the project has all come from equity partners and the sale of 220 condo units thus far, he added.
FMSbonds was sole underwriter on the transaction. Akerman LLP served as bond counsel, Hopping Green & Sams was issuer's counsel, and Fishkind & Associates was financial advisor to The Grove Community Development District.