Port St. Lucie Jumps at the First Digital Domain Buyer to Come Along
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The title manager of a Delaware-based capital formation company has signed a contract with the city of Port St. Lucie to buy the ill-fated Digital Domain property for $14 million.
That's $26 million less than the city paid to have it built, but the city doesn't look at the deal as if it's vulture food -- it's the best offer the sprawling Treasure Coast city has seen in the year since the property has been empty.
The buyer, Horizon Central Global LLC, has only been registered in Florida since June. But records show the company's principal, Richard Friedberg, has lived in Vero Beach since last September.
Interestingly, September was the month the movie animation and special effects company filed bankruptcy -- and it did so in Delaware -- leaving the cities of Port St. Lucie and West Palm Beach a combined $135 million in the lurch.
The Tradition Studio location cost PSL nearly $40 million to build. The $14-million-dollar bid would help it pay off a debt that is costing taxpayers about $3.4 million per year. The building is appraised at $13.5 million.
Cunningham told WPTV that finding a buyer for the property has been a city priority. He told the TV station that dozens of companies made offers, but none came close to Horizon's. Most attractive, he said, is that the company wants to buy, not lease.
Which is the main reason the city isn't fazed discovering Friedberg doesn't have a clean financial slate. Records show he filed for bankruptcy relief under Chapter 11 in December 2008, and the case is still pending. His estimated assets and liabilities at the time were $10 million to $50 million. He also owned several limited liability companies for which he asked protection. One of them was New York's Monteverde Restaurant. The IRS has a $260,000 claim against it and the New York Department of Taxation is still trying to collect $200,000 in sales taxes it failed to deliver.
Interim City Manager Jeff Bremer told Scripps Treasure Coast Newspapers that Friedberg's bankruptcy is not relevant. The buyer will pay the city the full negotiated sale price before closing on the building.
“I know some very sound financial groups that investments have not gone their way and they filed for bankruptcy,” Bremer told STCN. “This case doesn’t bother me.” Tradition Studios is an enormously heavy financial burden on the city's back, he said.
The building costs Port St. Lucie about $3.4 million annually in debt service, property taxes and other fees. But that cost will drop to about $1.4 million per year after the building is sold and the city's debt is refinanced.
Digital Domain Media Group laid off most of its 320 Port St. Lucie employees last September and shut down the facility. The company's Chief Executive John Textor resigned at virtually the same time.
The animation studio, which created visual effects for such movies as "Titanic," the "Transformers" movies and "Tron: Legacy," at first tried to sell the movies as part of a "strategic realignment" to refocus the company on its core business of creating visual effects -- digital effects, CG animation and digital production for the entertainment and advertising industries.
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