South Florida Hotel Facing Bank Foreclosure List

by Donald Hanz on States

The biggest wholesale trading center in South Florida is facing the possibility of inclusion on bank foreclosure list.

A $7.6 million foreclosure proceeding was filed by the Republic Federal Bank against South Florida Hotel Inc., owner of the Miami International Merchandise Mart, a wholesale trading center.

According to records at the Miami-Dade County Circuit Court, the bank also named Banif Multi-Fund based in Cayman Islands in the lawsuit. In 2007, Banif Multi-Fund gave a $3 million mortgage to South Florida Hotels.

The Miami Merchandise Mart is a three-story, 286,000 square feet building located near the Miami International Airport. The building features 458 commercial condominium units. Under the foreclosure filing, Republic Federal wants to take over 327 units in the building and put them on bank foreclosure list.

Many of the units are showrooms leased to South Florida small business owners to sell their products to business people, mostly from the Caribbean Area and South America. The Miami Merchandise Mart also hosts various trade exhibitions throughout the year.

According to Florida records, the Miami Merchandise Mart is owned by Georgi Zaczac, a Pinecrest resident. Zaczac is also the owner of the Sheraton Miami Mart Hotel which, in July 2008, filed a Chapter 11 bankruptcy under the name of SF Hotel.

Additionally, Zaczac also filed for personal Chapter 11 last December. State records showed that he is the manager of both the hotel and the Miami Merchandise Mart.

According to industry experts, the Republic Federal Bank is facing an enormous cost by pursuing its intent to place the Miami Merchandise Mart on bank foreclosure listing. The nearly $7.6 million repossession action could add a dent on its balance sheet which suffered a loss of almost $11.5 million in the first three months of this year.

Data from the Federal Deposit Insurance Corp. showed that the first quarter loss put the Republic Federal Bank to an undercapitalized status.

Meanwhile, the Republic Federal Bank’s estimated $57.7 million noncurrent loans accounted for 15.5 percent of the financial institution’s total loans. Bank executives have been very vocal in saying that they are seeking investments to boost the bank’s capital levels.

On the other hand, more and more commercial properties are expected to be added on bank foreclosure list as Florida’s foreclosure filings rose in May, making the state the third highest in terms of foreclosure rate.