Four years after receiving approval to build a 354-unit luxury apartment tower in North Miami Beach, Turkish developer Celal Ozkan has lost the development site to lender Safe Harbor Equity through bankruptcy court proceedings.
The nearly one-acre property at 16300 Northeast 19th Avenue will be transferred from an affiliate of CEO Contract, led by Ozkan, to Miami Beach-based Safe Harbor Equity. The transfer follows an $8.5 million loan that Safe Harbor provided for the site in 2022, according to court records. CEO Contract operates out of Istanbul and New Castle, Delaware.
Federal bankruptcy Judge Laurel M. Isicoff approved the sale last week to Safe Harbor’s distressed debt fund 3. A source familiar with the case said a scheduled bankruptcy auction on September 26 was canceled, likely due to a lack of qualified bidders who were required to offer at least $4.55 million for the site.
“This is a fantastic property that we are excited to work with a developer to sell this asset,” said Chris Spuches, attorney for Safe Harbor Equity. He added that Safe Harbor does not plan to develop the property itself.
Attempts to reach attorneys and representatives for CEO Contract were unsuccessful.
CEO Contract acquired the vacant parcel in 2022 for $5.2 million through its affiliate Sky Gardens Residences and received final approval in 2021 for a planned 20-story tower named Sky Gardens Residences, which would have included a rooftop garden and amenities. However, construction never began.
In 2022, CEO Contract borrowed $8.5 million from Safe Harbor at an interest rate of 8.75 percent with terms allowing two six-month extensions beyond an initial one-year period; both Celal Ozkan and Cagatay Emre Ozkan (COO) served as guarantors on the debt under certain conditions detailed in court filings.
Safe Harbor alleged that CEO Contract defaulted by missing payments due in August 2022 and January 2023 and failing to pay full taxes for 2022 on time. A subsequent agreement allowed CEO Contract to reduce principal owed to $7.7 million while extending loan terms.
Last year, Sky Gardens sued Safe Harbor in Miami-Dade Circuit Court alleging usury and claiming that default claims were manufactured by the lender; they also disputed tax amounts owed and objected to extension fees calculated on higher original loan balances rather than reduced amounts after partial repayment.
Court filings indicate that CEO Contract accused Safe Harbor of imposing retroactive default interest rates and other fees exceeding Florida’s legal maximum annual rate of 25 percent.
In its lawsuit against Safe Harbor, CEO Contract described it as “a greedy lender” conducting “a vicious campaign” using a “‘loan-to-own’ scheme” intended “to impair” refinancing options for the developer.
Safe Harbor filed a countersuit seeking foreclosure based on alleged defaults including missed principal payments last year.
In January this year, CEO Contract filed for Chapter 11 bankruptcy protection which halted ongoing litigation between both parties; no foreclosure order was issued during those proceedings.
According to court documents, the land is appraised at $18 million while completion and lease-up of the proposed project could value it at $161 million upon buildout. The property will be conveyed free from liens excepting an outstanding Miami-Dade tax lien totaling $114,000 covering property taxes due in both 2024 and 2025.
