You sometimes forget how the agency with the little acronym, NAMA, has such a wide reach into so many aspects of this country’s life. And although just 7% of the property assets securing NAMA loans are located outside the UK and Ireland, we are reminded again today that NAMA has a long reach. In the west Florida city (50,000-population) of Sarasota, it seems that NAMA is facing a legal challenge over the ownership of land, originally purchased by a consortium led by veteran developer Paddy Kelly.
It was 2004 when the Paddy Kelly-led consortium, Irish American Management Services bought a 15-acre plot of land next to the sea in Sarasota (pictured here) and the plan was to develop a hotel, apartments and shops. A straight-forward enough development in a location that’s not all that exotic; it was going to be a USD $1bn development and the consortium was obviously hoping to make a handsome profit. The consortium included NAMAed John McCabe and also John Walsh. The purchase price was reported to be USD $60m though it is now reported that Anglo advanced a total of USD $100m for the project.
Fast forward to the present day and a company, CMR Bayside, controlled by Florida businessman, Mark Famiglio is seemingly about to lock horns with NAMA over whether a contract for sale, or an option to buy, had previously been agreed. It is not clear what the purchase price would be – in December 2009 it was reported that a sale of the land for USD $25m was imminent – but the claim is that a USD $1m deposit has been paid. It is not clear to whom the deposit was allegedly paid – Paddy, Anglo, NAMA or indeed when it was paid but the “deal” has been rumbling on since at least 2009, it seems. NAMA appears to be disputing the existence of any contract, with its legal representative in Florida saying “he [Mark Famiglio] once had a contract, which he terminated during the due diligence period. The contract was terminated by him.”
Perhaps it’s just another wrangle with legal overtones that you often get amongst the development community, but it just goes to show how NAMA gets into the life of other communities, in other countries – a big agency with a little acronym.
NAMA Wine Lake 
A bit of a chancer, methinks. Looking for some “feck off” money.
They are considered a bit of a soft touch ..
http://www.bizjournals.com/jacksonville/news/2011/09/09/sawgrass-marriott-goldman-sachs-plan.html
Wouldn’t be the first time the sale of a loan faltered because of bad title. Anglo were very sloppy.
It’s bayside not seaside but they should counter sue for tortuous interference
http://www.heraldtribune.com/article/20090319/ARTICLE/903191081?p=2&tc=pg
Frank it may have been included in the loan “sale”
http://online.wsj.com/article/SB10001424053111904875404576534871364291538.html
An eight year old 100 million dollar loan now has the potential to go for around 25 million. Probably less, since prices have dropped considerably from 2009. How much interest and principal have been paid on the loan? So, Anglo (NAMA) has likely lost 75 million in principal plus the accrued interest that could be around another 50 million. A total loss of 125 million on a 100 million dollar loan, not including the real estate taxes, lawyer fees and, of course, NAMA overhead. In the US alone, there are millions of “home owners” who have not made principal or interest payments for years. You wonder why the whole deal is going to go belly up.
It’s complete nonsense the “buyer” would file a claim or ask for specific performance it will be a long time before anything ever gets built on this site there is simply no market for the proposed development.
Jake its almost as if the Irish developers deliberately sought out bad deals staggering that they could lose so much money if the agreement is not in writing it does not exist Nana should make an example of him to discourage any others.
Frank there is actually a market for “bad paper” they are called scratch and dent loans
http://wiki.answers.com/Q/What_is_scratch_and_dent_mortgage
http://www.luxurysarasotarealestate.com/ritz-carlton-residences.php
http://legal-dictionary.thefreedictionary.com/_/dict.aspx?word=lis+pendens
@John Gallaher:
It wasn’t included in the loan sale. The loan was made from Boston, but was repatriated back to Dublin as it was classed as a development loan. It is being administered now by NAMA in Dublin.
Wstt any idea what the exit strategy is why don’t they just sell it and what was Kelly thinking it’s a secondary market prone to boom bust cycles he bought it at or near the top of market Anglo had no business making these loans US lenders would not have touched it.
In Ireland, NAMA has everything in it’s favour. There is near perfect alignment between politicians, barristers and the judiciary and of course they can fall back on secrecy and omerta also. Consequently, they can arrange the stars in the sky whatever way they wish. The Paddy McKillen ruling was designed to stop a rot setting in by showing the court system to be seriously flawed and biased. McKillen should have cast his net even wider.
With all the money and the slavering legal profession In Ireland they are cockahoop and why would’nt they be? Outside these waters and especially in the US they are small fish that can easily run fowl of the law of the land. Quango’s cannot trump private citizen in the US and their omerta would not be tolerated. Just because the government thinks it was the only game in town. I would like to see NAMA being tested in the US if only to show that there is a limit to their power. However, that said, this case is not a good test case.
If they applied half the legal resources on a 100 mil deal that they have on Drumm this “buyer” sorry colorful character would be long gone …
http://www.srqmagazine.com/issues/issueDetail.cfm?iteID=1047
NAMA’s exit strategy is to foreclose and sell for what they can get – probably mid teens. Smart Alec spots nuisance money opportunity.
Why did PK buy?,…. long story. I’m sure it will be in his memoirs.
Actually was on site stayed at ritz not a fan of market or Jacksonville Sarasota good site just weak market 100 mil equity wiped out at Marriott.
http://www.thepost.ie/story/text/ojidkfidsn/
@John Gallaher: Ritz Carlton in Sarasota is a poor example of the brand. Not a 5 star experience at all. The section of site itself fronting the marina is the premium part and represents a good opportunity at the right price in a decent market. The rest of the site off the water would be OK for multi family rentals. The problem is the accumulation and payment of property taxes while waiting for the market to return as the site does not produce an income.
I’m no fan of Sarasota either though – a secondary resort.
Familiar with it was told PK did not own marina or have any slips that was considered negative Ritz has struggled to shift it’s own condos they have “beach” club on ocean and operate shuttle service.. agreed carrying costs at that basis prohibitive but there is capital in mid teens for this type of deal.
Prefer it to Jacksonville which is very urban as is Sarasota in parts.