Wells Fargo CEO Tim Sloan and a rendering of CityPlace (Credit: Getty Images)
The long-running dispute between Related Companies’ CityPlace in West Palm Beach and its lenders over a $150 million loan just took another turn this month.
Wells Fargo, a trustee for CityPlace’s lender Credit Suisse Commercial Mortgage, is alleging that CityPlace’s appraisal for its loan was based on misleading and inaccurate information given to its appraiser in a counterclaim filed in a Palm Beach County Circuit Court on Jan. 2.
CityPlace allegedly concealed information to Cushman & Wakefield regarding the likelihood of a zoning change that would allow CityPlace to build a 21-story apartment complex at the site of the former Macy’s department store at CityPlace property, according to the lawsuit. This caused Cushman & Wakefield to give CityPlace an appraisal of $120 million, $35 million less than what it should have been, according to Wells Fargo.
The Palm Beach Post first reported the news. CityPlace declined to comment. An attorney for Wells Fargo also declined comment.
A few weeks ago CityPlace finally reached an agreement with its lenders to refinance the $150 million loan, avoiding the possibility of foreclosure.
Wells Fargo is now seeking a new appraisal.
Related Companies is already redeveloping Rosemary Street as part of the CityPlace project. The Rosemary Avenue project will add covered outdoor seating, landscaping, more shade and new lighting.
In 2011, CityPlace was previously hit with a foreclosure action, but Related was able to negotiate an extension on the loan and keep the property. In 2016, Trepp, a commercial research company, showed that CityPlace’s two loans from commercial-mortgage backed securities were in default.
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