Developer Stan Thomas, who has been fighting the foreclosure of prime real estate near the Orange County Convention Center, appears to have lost title to the property to a Boston investment firm for $68 million.
An affiliate of UC Funds acquired the property on Universal Boulevard and International Drive in two transactions last week. UC affiliate CPR Money -- the purchasing entity named on the deeds -- loaned Thomas $49 million in May.
The deeds were signed in 2016 but filed last week, seven months after Thomas Enterprises settled a lawsuit with the parent company of Universal Studios that cleared the way for two new theme parks to be developed on adjacent properties.
The Newnan, Georgia-based developer still controlled more than 260 acres with entitlements for 1,900 hotel rooms, 1,450 apartments and nearly a million square feet of commercial and retail development. But he had defaulted on a $27 million loan and was attempting to stave off the foreclosure on the 82 developable acres. The property was owned by two Thomas affiliates: OHL Holdings and Universal City Property Management III (UCPM III).
The foreclosure case is still pending, but the original lender sold the note to New York-based Gamma Real Estate in August. Gamma entered the Orlando market earlier this year with the acquisition of an apartment complex on S. I-Drive.
Gamma President John Kalikow told GrowthSpotter his firm holds the first lien on the Thomas property. UC Funds appears to have held a "pocket deed" in escrow for the last two years.
"It's a way for a lender to have more influence and power over a borrower," he said. "It doesn't affect my standing at all."
But it's unclear what role, if any, Thomas will play in the development going forward. Without clear title to the property, he cannot seek permits to develop the site. Thomas could not be reached for comment.
"He recognizes the importance of this location in terms of the growth of Orlando, and he wants to see the property develop as best as can be," Kalikow said.
The decision to record the pocket deed is not one that would be taken lightly, especially because UC Funds paid $476,000 in document taxes on the two instruments. It's likely the decision was triggered by Thomas filing for Chapter 11 bankruptcy protection this month for the second time on his Ovation project just outside of Nashville.
The Orange County deeds appear to have been changed last week, with the original 2016 date changed by hand to 2018.
David Rooney, assistant controller for records administration, said that alteration alone wouldn't necessarily flag the deed because they were signed by two witnesses and both were notarized in October 2016.
"This is an unusual one," Rooney said. "We've seen cases where an instrument is recorded years later. It doesn't happen very often."
Still, it met the criteria to be verified and recorded, he said.
UC Funds is a national balance sheet provider of both debt and equity capital solutions that has provided over $1 billion of capital solutions since 2010. Company officials could not be reached for comment.