Preserving the Residential Character of Boca Teeca

Tuesday, February 10, 2015

Boca Teeca Residents vs. Wells Fargo & City of Boca Raton

The residents of Boca Teeca are under attack by attorneys from Wells Fargo bank and the pro-development staff of the city of Boca Raton as the over 200 acres of golf course surrounding their community faces an uncertain future.  The Ocean Breeze golf course has been in foreclosure since March 2010 and recently the attorney for Wells Fargo has requested an extension of a development approval dating back to 12/11/2007.

Background of this Boca Teeca Development Proposal

Numerous agreements were made between the residents and the new owner of the property in 2004, MCZ Centrum Florida V Owner, LLC, a Chicago-based developer that planned to develop 211 townhouses on a portion of the South 9-holes of the 27 hole golf course.  These agreements were made in good faith by the residents after numerous promises by the representatives of the developer to improve the community and continue to operate the golf course.  Former owners/members of the golf course were given a payment for their equity in the club and promised low annual dues on an improved golf course--most of these owner/members were individuals that were not residents of the Boca Teeca community.

On 12/3/04 Wells Fargo bank (formerly Wachovia Bank) loaned the developer $7 million for the $7.12 million purchase price of the Ocean Breeze County Club which was secured by the first mortgage on the property.  This loan agreement was modified in June of 2007 as the bank required the principals of MCZ Centrum to personally guarantee the loan in order to grant an extension that would provide more time for the development approvals under consideration by the city.

In Sept. 2007 the developer filed a deed amendment with the Palm Beach county clerk which allowed the consideration of the development approvals to proceed through the city of Boca Raton.  This deed amendment was obtained after over 3 years of negotiations with residents and promises that resulted in obtaining over 900 non-notarized signatures on consent forms agreed to the removal of the recreational land designation on approximately 30 acres of the South section of the golf course.

The city approved the development of 211 townhouses on 12/11/07 but the negatively impacted residents appealed these city approvals so that the final approvals were not obtained until October 2009.  With the decline in the real estate market during this period the developer stopped making payments to Wells Fargo and stopped paying their Palm Beach County real estates taxes.

In March 2010 Wells Fargo bank commenced foreclosure proceedings.  On Sept. 16, 2010 a planner(Jeffrey Evans, who worked for the law firm that formerly represented the developer) filed a letter with the city in order to request an extension of the development approvals under the recently adopted Florida legislation that allowed for The Owner of The Property Subject to Approvals to obtain a 2 year extension on these approvals.

On October 5, 2011 MCZ Centrum Florida V Owner, LLC voluntarily filed a form with the Secretary of State to withdraw their authority to transact business in Florida.  Shortly thereafter Wells Fargo requested a receiver be named in order to protect their assets and security on their loan.  The receiver was appointed in Jan. 2012 and hired professional golf course management company The Arnold Palmer Group which was affiliated with the receiver, Century golf of Addison, Texas. 

This was the first professional golf course management company to operate the Ocean Breeze Country Club (formerly named Boca Teeca Country Club) and they quickly opened the course to the public and increased the number of rounds played which resulted in a positive cash flow.  Based upon the receivers financial reports over 47,000 rounds of golf were played in the first 9 months after taking control of the golf course.  This appears to be a reflection of the demand for golf in the city of Boca Raton as this facility is the only championship level golf course within the city limits that was open to the public.

In 2012 Wells Fargo amended the foreclosure filing to include all condo associations and the single HOA in order to eliminate their agreements as encumbrances on the property during this process.  In 2012 Mr. Evans filed another request for a 2-year extension based upon another Florida state law that was passed in that year to accommodate stalled developments.  The city had not made any ruling and acknowledgement that these extensions were valid, as the city simply replied with a letter that acknowledged receipt of the letter from Mr. Evans of Covelli Design--which had not documented authority to act on behalf of the property owner in the city records .

In the 4th quarter 2014 an attorney for the bank's receiver submitted a letter to the city indicating that the bank planned to sell the loan to a townhouse developer so Wells Fargo was requesting an 18 month extension under the city's code of ordinances.  This extension was claimed to be necessary in order for the buyer of the loan to complete the foreclosure process and obtain the building permits prior to the expiration of the development approvals in April 2015.

At the scheduled Jan. 2015 planning & zoning hearing the attorney (Mitch Kirschner) representing the bank's request for an extension was granted a motion to table this request until Feb. 19th.  This request was made due to the PB county traffic engineering requirement that there could be no building permits issued after 12/31/15, wheras the city staff recommended approval of the 18 month extension until Oct. 2016.

The city staff has indicated that they have no control or interest in the promises and agreements that were made by the developer in order to obtain the amendment to the deed restriction even though none of this process would have been possible without the consent of the Boca Teeca residents.  City of Boca Raton staff's recommendation for granting the extension of the numerous development approvals is the first instance in which they have officially validated the prior extension requests made by the planner, Jeffrey Evans, under the Florida state statutes.

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