The developer of the long-proposed iSquare Mall + Hotel on International Drive has negotiated 18 more months of runway with a lender threatening foreclosure. But a renewed search for private investors will likely bring changes to size and scope of the purported $400 million project.
Abdul Mathin, his iSquare land owner affiliate International Shoppes LLC and development company The BlackMINE Group owed more than $14.3 million in unpaid mortgage value to Delaware-based lender Elizon DB.
That lender sued Mathin last November to foreclose on the property, and asked an Orange County judge to appoint a receiver to take it over.
Mathin reached a settlement agreement within the past week with the lender, which gives him another 18 months to pay off the mortgage. He has agreed to surrender the property if the mortgage isn't paid by the deadline in November 2019.
The settlement terms were first reported Monday by the Orlando Sentinel. The two sides reached the deal through arbitration, but it has not been endorsed yet to the Orange County Court.
Mathin told GrowthSpotter on Monday he is willing to take on a joint venture partner to developer iSquare, or sell the project's plans and entitlements to another developer that would build it while he retains the land.
"I've been holding that property since 2007, this is my dream project and I want to build this," he said. "I'm not selling that land, I bought it for a reason."
Planned for a 5.6-acre retail center parcel at the southeast corner of I-Drive and Kirkman Road, Mathin bought the site in 2007 for $12.5 million.
In March 2016, he earned city approval for rezoning and entitlements on the site for up to 23 stories with two hotel towers totaling 539 keys, up to 434,831 square feet of retail/commercial space, and a seven-story parking garage.
Mathin struggled to keep up with the International Shoppes mortgage payments in part because multiple tenants were delinquant on their rent. Mathin filed multiple eviction suits last year, worked out payment plans for some, and said Monday he has only three vacancies in the retail center.
Mathin said he is not actively pursuing traditional construction loans from banks because "they don't do projects such as iSquare, they can't underwrite it."
"It's better to bring in private equity, wealth managers and people dealing with bonds and securities that have excess cash sitting in the banks, and thus the margin to invest in a project like this."
Mathin said last year the iSquare project was still achievable, and only requires he secure up to $500 million in financing from private equity and institutional lenders.
"We are getting ready to go back into market with the iSquare project, and have been slowly tickling some people with it and gotten enough positive responses to say we really need to go to market in a more formal way," said Tom Ablum, president of Chicago-based investment bank and real estate financing advisor Ablum Brown & Company, which has been working with Mathin since 2016 to procure financing for iSquare.
Ablum said he has suggested "modifications" to the iSquare project that Mathin is considering, but declined to elaborate.
"We may ask for modifications to a project because of things we know about the marketplace," he said. "So if we get most of the modifications we ask for this project is still viable. It's not a project (Mathin) can do himself, he needs a partner."
Mathin acknowledged on Monday he is still working on value engineering to reduce costs for the iSquare project. His next step would then be to produce demolition plans and construction plans to submit for city permits.
But that assumes Mathin's architects are still willing to work on the project.
GrowthSpotter first reported last December that multiple pre-construction service providers claimed Mathin did not pay them in full for their work on iSquare, and some were in legal mediation.
HKS Architects, the current design architect on the project, started a legal arbitration process on April 30 with Mathin in Orange County Court.
Mathin said he also settled a foreclosure suit in March with Bank of the Ozarks, to which he owed roughly $4.3 million on a defaulted loan for an office property in MetroWest.
The recent settlements also prompted Mathin to cancel two Chapter 11 bankruptcies he had filed for the I-Drive property and another near The Florida Mall.