A circuit court judge has ordered a foreclosure auction of this aging apartment complex at 237 Brazilian Ave. unless the owner pays nearly $6 million to settle a mortgage debt. 2017 photo by Meghan McCarthy / Daily News
An aging, vacant Midtown apartment complex is slated to be sold next month at a foreclosure auction unless Palm Beacher Frederick J. “Rick” Keitel III and one of his companies pay a Palm Beach-based trust nearly $6 million to settle a debt, a circuit court judge has ordered.
The court ruled that Keitel is liable for paying $5.7 million, plus additional interest accrued since Feb. 5, because he signed a personal guarantee on a $2 million mortgage issued to his ownership company for the property at 327 Brazilian Ave. Judge Edward A. Garrison’s order also says Keitel’s company, Florida Capital Management LLC, shares liability for the amount owed.
+ Rick Keitel
Palm Beacher Thomas B. D’Agostino Sr.; his son, Thomas B. D’Agostino Jr.; and their family trust — which had lent Keitel the $2 million — sued Keitel for not paying the mortgage in March 2013. The case dragged on until a final judgment for $5.09 million was rendered in June in the 15th Judicial Circuit Court. In October, the court added nearly $445,000 in attorneys’ fees to that amount. Accrued interest makes up the rest of the total.
Garrison issued his amended final order in the foreclosure action Feb. 5 and set a March 21 date for the online auction, which will begin at 10 a.m. through the Palm Beach County clerk’s website.
Keitel’s ownership company paid $2.5 million for the Brazilian Avenue property in 2005, courthouse records show.
RELATED: Judge says Palm Beach foreclosure case has ‘long and tortured history’
At one point during the proceedings, Judge Richard L. Oftedal, writing for the 15th Circuit Court, noted that the case had a “long and tortured” history, owing largely to an avalanche of legal filings filed by or at the request of Keitel, an attorney and real estate investor.
Related proceedings have taken place in the Florida 4th District Court of Appeal and U.S. Bankruptcy Court. Keitel is the subject of a federal Chapter 7 personal bankruptcy case, and his court-appointed bankruptcy trustee consented to last year’s foreclosure judgment. The trustee, Orlando bankruptcy attorney Richard B. Webber II, has told the Daily News he won’t comment about the bankruptcy case or the foreclosure judgment.
The property at the heart of the foreclosure action lies a few lots west of South County Road. Measuring four-tenths of an acre, it is home to a six-unit apartment complex that dates to the mid-1920s. The property has an estimated total market value of about $2.2 million in the latest Palm Beach County tax rolls.
But two Palm Beach real estate sources interviewed Tuesday said the property would probably be worth at least $5 million, and likely more, if sold in today’s market.
Keitel previously had told the Daily News that he and a business partner planned to buy the property back if a sale was ordered. He has floated the idea of building two luxury townhouses there.
+ In September 2016, the Architectural Commission approved this design for a two-unit luxury townhouse development to replace an aging apartment complex
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Attorney Eric C. Christu of Shutts & Bowen confirmed Tuesday that he and his clients, the D’Agostino family, have received no offer from Keitel’s side of the aisle to settle the debt since Garrison issued his order.
The D’Agostinos and their trust asked the court for a final judgment in the case in May 2016, saying Keitel had not made a payment on the mortgage since missing one in September 2010, according to the D’Agostinos’ original complaint.
Meanwhile, the town has been levying a $500-per-day fine against Keitel’s ownership company for longtime and repeated code violations involving landscaping and maintenance at the property. The fines began accruing June 30, town records show.
In January 2016, Keitel lost in a $2.2 million court-sanctioned sale a house he had owned since late 1990 at 412 Brazilian Ave. It was down the street from the apartment complex. The buyer in that deal has since developed a house on speculation.
Also in January 2016, two of Keitel’s ownership companies sold in another court-sanctioned sale two office buildings at 230 and 240 Royal Palm Way for a combined $21.45 million.
The D’Agostino family has been involved in other business dealings with Keitel, courthouse and property records show.