Four years after receiving approval to build a 354-unit luxury apartment tower in North Miami Beach, Turkish developer Celal Ozkan has lost the project site to its lender, Safe Harbor Equity. The nearly one-acre property at 16300 Northeast 19th Avenue will be transferred to Safe Harbor following a bankruptcy court decision.
CEO Contract, led by Ozkan and with offices in Istanbul and New Castle, Delaware, had acquired the site through its affiliate Sky Gardens Residences in 2022 for $5.2 million. The company received final approval for a 20-story tower featuring rooftop gardens and amenities in 2021. However, construction never began on the project.
In 2022, CEO Contract secured an $8.5 million loan from Miami Beach-based Safe Harbor Equity at an interest rate of 8.75 percent. The loan had a one-year term with two six-month extension options. Court records indicate that CEO Contract, its affiliates, Ozkan, and Cagatay Emre Ozkan (COO of CEO Contract) were all guarantors on the debt.
Safe Harbor alleged that CEO Contract defaulted on payments due in August 2022 and January 2023 and failed to pay property taxes on time for 2022. A forbearance agreement reached in 2023 allowed CEO Contract to reduce the principal owed to $7.7 million and extend the loan term.
A source familiar with the matter said that a scheduled bankruptcy auction for September 26 was canceled due to a lack of qualified bidders; offers were required to start at $4.55 million according to court filings.
The dispute between CEO Contract and Safe Harbor included lawsuits from both sides filed last year in Miami-Dade Circuit Court. CEO Contract accused Safe Harbor of usury and claimed it manufactured default claims as part of what it described as a “loan-to-own” scheme intended to take control of the property by impairing refinancing options. It also challenged fees imposed under their agreements.
Safe Harbor countered with a foreclosure suit based on allegations of defaulted payments.
In January this year, CEO Contract filed for Chapter 11 bankruptcy protection, which paused ongoing lawsuits between the parties. No foreclosure order was issued during these proceedings.
Federal bankruptcy court Judge Laurel M. Isicoff approved last week’s sale of the site to Safe Harbor’s distressed debt fund.
Chris Spuches, attorney for Safe Harbor Equity, stated: “This is a fantastic property that we are excited to work with a developer to sell this asset,” adding that his firm does not plan to develop it themselves.
Court documents value the land at $18 million and estimate the proposed development would be worth $161 million upon completion and lease-up. The transfer will leave only an outstanding Miami-Dade tax lien of $114,000 related to property taxes for 2024 and 2025.
Attorneys representing CEO Contract did not respond to requests for comment.
