Considered the most-blighted hotel property on Kissimmee's W192 tourist corridor, the Toscana Suites sold Tuesday for $2.4 million, and the new owner signed a consent order pledging to clean it up in six months.
Jumani Hospitality Inc., a U.S. affiliate of Pakistani-based Jumani Group, paid cash for the former 390-room motel just off Disney property that has been vacant since it was seized in a foreclosure.
The previous owner was in the process of converting the motel into an all-suites property, and had completed 63 units and gutted the rest of the motel when the financial crisis halted the project. The lender got title to the 10-acre property in October 2015 and put it on the market in December.
Listing broker Susan Morris of RDIP Florida told GrowthSpotter the sale presented a number of unusual challenges despite the prime location at 2950 Reedy Creek Blvd. The property also sits right in front of Magic Village 2, a $72 million luxury resort that is under construction.
"The owners, who were lenders, had certain requirements that you wouldn't have with a normal seller," she said. "Some interested parties just wanted it for the land. We actually had higher offers, but they wouldn't have been able to close until they got site plan approval. Because of the special requirements, the seller didn't want the longer closing date."
The property has multiple active code violations for overgrowth, lack of maintenance and accumulation of junk and debris. The county was set to fine the property owner $250 per day, starting Oct. 19.
The seller ended up accepting a lower cash offer from Jumani because the buyer was able to close before the code fines would have kicked in, Morris said. She praised the county's code enforcement division for aggressively going after owners who don't maintain their property and working with the buyer to correct the problems.
"It's great to know someone is going to fix it up," Morris said. "The Magic Village group has been waiting for this."
Mohammad M. Jumani got his start in the sugar processing business in Pakistan and has since expanded into construction, real estate and hospitality in his home country, Dubai and in the U.S. Jumani Holdings is the developer of a 48-unit vacation home community just off W192 that began vertical construction this summer.
Arisha Jumani told GrowthSpotter the family plans to spend at least $5 million to bring the property into code compliance and to complete the original renovation.
The Jumanis signed a consent order on Sept. 21 that establishes a series of deadlines to correct the violations; the failure to meet any of these deadlines will result in a $250 per day fine. First they must secure the property with a vinyl-coated chain-link fence by Oct. 19.
They have until Dec. 21 to submit a site development plan (SDP) or apply for demolition permit. If they elect to proceed with the renovation, the Jumanis must obtain construction permits and building permits within 90 days of SDP approval and they must bring the property into compliance within 220 days of receiving building permits.
"We're working with the county," Jumani said. "We signed all the documents and the consent order, so we have to have it up and running. The county has given us six months. Right now we're working to get all our contractors lined up."
If they choose the demolition route, they must complete the demolition by April 19, 2017.
David Buchheit, executive director of the W192 Redevelopment Authority, told GrowthSpotter he's thrilled the property is under new ownership. The property would be eligible for a demolition grant of up to $75,000 from the authority.
"This is great news," he said. "That site has been in blighted condition for years. Even if they only spend $5 million, it really helps out with Magic Village 2."
Hector Lizasuain, project manager for Magic Development, said the company was hoping a buyer would demolish the motel and redevelop the site. "If anybody is going to buy that property, now is the time to do it because of the incentives being offered on W192," he said.
Lizasuain serves as vice chairman of the development authority. He said Magic Development CEO Rodrigo Cunha had once offered to buy the Toscana property, but decided not to pull the trigger.
"We just decided we couldn't take on any more land," Lizasuain said. "We have four active projects right now. We hope that whatever they put in there will complement what we're doing. Even if they only put $5 million into it, at least it would be generating revenue. We're just so excited to see something happening."
He said Magic is about 30 days away from pulling building permits for Magic Village 2. "We've already got all the infrastructure in."