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Developer faces cash crisis

Three condo projects falter as contractors, banks and tax bills go unpaid.

By Scott Barancik
Published February 22, 2007

ADVERTISEMENT [Times photo: Atoyia Deans] Seaside Villas in Gulfport: Fremont Investment & Loan says devloper John Loder owes it $16.3-million in principal and interest.

Nearly 50 buyers paid thousands of dollars apiece last year to reserve a condo at the Seaside Villas at Gulfport, a 121-unit complex along Boca Ciega Bay that was scheduled to be completed by August.

So far, though, the only people living there have been squatters, who moved into the property after the last unpaid subcontractor pulled out several months ago.

At least somebody is benefiting from developer John Loder's mounting woes. Last month, lenders sued to foreclose on three waterfront projects that Loder, architect Stephen Spencer and various partners allegedly defaulted on in Pinellas County. The banks seek to recover nearly $90-million in mortgages for Seaside Villas, the 198-unit Shore Club Pasadena and the 272-unit Snell Isle Club in St. Petersburg, all of which were being converted from apartments to condos.

The list of casualties is long. Among those allegedly owed money are dozens of subcontractors, condo buyers, secondary lenders and the county's property tax collector. Hundreds of former tenants were removed to make way for the renovations.

"I would have loved to buy my unit, but the price was twice what I felt it was really worth," said former Snell Isle Club resident Cheryl Harrison. The club's new owners wanted more than $400,000 for her three-bedroom, $970-a-month apartment.

Loder, 40, whose father founded the Crabby Bill's restaurant chain, is no small player. In recent years, he has partnered with some of the bay area's best-known developers, including Tampa billionaire Eddie DeBartolo Jr. and St. Petersburg notables Jimmy Aviram and Frank Maggio.

Some of his other projects have survived last year's real estate slowdown, including Barefoot Beach Resort in Indian Shores, Pelican Pointe at Clearwater Beach, and Redington Shores Yacht and Tennis Club.

But Loder and Spencer - neither of whom returned messages last week or Wednesday - are the only two individuals who personally guaranteed all three of the defaulted bank loans. And according to lawsuits filed by Wachovia Investment Holdings LLC and Fremont Investment & Loan - a Brea, Calif., bank that funded the Gulfport and South Pasadena projects - the developers didn't simply miss a few mortgage payments.

Fremont alleged that its loans went into default when Loder and his partners failed to pay subcontractors, property taxes, utility bills and certain insurance premiums. The partnership also missed promised completion dates and minimum sales targets. On-site sales offices and model condos were shuttered.

The evidence of neglect was visible at times. Earlier this month, Fremont alleged, the South Pasadena property was beset by trespassers, exposed wiring, broken windows, asbestos warnings, open or missing doors, dangerous balconies, and dozens of washer-dryers left sitting in a parking lot. "The project is in an abandoned state," Fremont wrote.

Infighting has been a problem. Loder and former partner Steven Gianfilippo, who was a guarantor of the Gulfport and South Pasadena loans, are in litigation. A Sarasota investor reportedly fought with Loder over control of the Gulfport project, according to a Fremont lawsuit. Stanford Solomon, the St. Petersburg lawyer who represented Loder and his partnerships in all of these cases, sought to withdraw as counsel last week, citing "irreconcilable differences."

Aviram, whose ANB Enterprises pursued six separate deals with the partnerships in 2005, has been battling them in court ever since. Both parties blame the other for scuttling a $65-million mobile-home park acquisition on which each lost a $1.5-million deposit.

Despite the apparent financial squeeze, another company led by Loder has recently purchased several luxury cars. Over the past 18 months, Lay Z Girl LLC - a company for which Loder is listed as managing member - acquired a Bentley, Hummer, Lexus and Range Rover, according to public records.

Times staff researcher Caryn Baird contributed to this report. Scott Barancik can be reached at barancik@sptimes.com">href="mailto:barancik@sptimes.com"

[Last modified February 21, 2007, 22:53:07]