Isle developer faces 5th foreclosure suit
By Andrew Gomes
Advertiser Staff Writer
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A lender has filed to foreclose on a Big Island retail complex developed by Brian Anderson, marking a fifth foreclosure case against the embattled Hawai'i developer.
An affiliate of Florida-based investment firm LNR Partners Inc. filed the suit Thursday in U.S. District Court claiming Anderson defaulted on a $17 million loan made in 2007 related to Coconut Grove Marketplace in Kailua, Kona.
Anderson attorney Gary Dubin said Friday he could not immediately comment on the suit because he had not seen a copy of the complaint. Anderson could not be reached.
The suit is the latest in a string of foreclosure cases filed against Anderson and his development firm Anekona, which in recent years delved heavily into acquiring hotels to operate them or convert them for resale by the room as condominium hotels.
Other foreclosure suits against Anderson seek to repossess his share of the Ilikai in Waikiki, the former W Honolulu-Diamond Head, the Kauai Beach Resort and the Aloha Beach Resort on Kaua'i.
Anderson's spree of acquisitions between 2004 and 2006 also included the Islander on the Beach Hotel on Kaua'i, which was renovated and resold as a condotel, and the Waikiki Royal hotel converted into a condotel now known as the Outrigger Regency on Beachwalk.
Earlier projects involving Anderson as a partner included the condotel conversion of the Royal Sea Cliff in Kona in 2001, and the condotel conversion of the Waikiki Terrace hotel to the Luana Waikiki in 2003.
Coconut Grove Marketplace is a project dating back to 1988 when Anderson, who is based on the Big Island, began development work for the oceanview retail complex.
Anderson since 1998 has been involved in developing a second phase of the project with expansion onto land adjacent to the initial phase.
According to the foreclosure suit, Anderson borrowed $17.2 million from Lehman Brothers Bank FSB two years ago.
The loan was assigned several times. Last month, LNR Partners acquired the loan and mortgage through affiliate LBUBS 2007-C2 Alii Drive LLC.
LNR Partners in its suit said Anderson defaulted on the loan on Nov. 13, 2008.
Besides seeking to have the property sold at auction for its benefit, LNR Partners also is seeking to obtain $1.7 million from Anderson under a loan guarantee.
The company said Anderson triggered the personal liability by not forwarding some or all tenant rent payments to LNR Partners after the loan default.
LNR Partners said Anderson owes $16.9 million on the loan principal plus nearly $4.5 million in penalties and interest.
Reach Andrew Gomes at agomes@honoluluadvertiser.com.