It's a scenario that has played out before. A high-profile luxury estate is listed with a staggering price tag, languishes on the market under the weight of mounting legal or financial complications, and ultimately heads to auction to be claimed at a dramatically discounted price.
Such is now the likely destiny of Casa Casuarina, better known as the Versace Mansion. On Tuesday a U.S. bankruptcy court approved the auction sale of the Miami, Fla. manse, which has graced the list of America's most expensive homes for sale since last year.
Casa Casuarina, the South Beach estate where late fashion designer Gianni Versace lived and tragically died, will be auctioned on the morning of September 17. The property carries an initial "stalking horse bid" from the creditor of $25 million that it maintains the right to increase as far as $32.7 million -- meaning prospective buyers must go over those numbers to acquire the property.
It's quite the starting price for a property that came to market in June 2012 asking $125 million before eventually reducing to $75 million, the price at which it has been listed since May. Worst case, an initial bid of $25 million represents 80% off of the original asking price.
Pompano Beach, Fla.-based Fisher Auction Company is handling the sale in partnership with the property's listing agents, The Jills of Coldwell Banker Previews International. Vetted buyers must plunk down a $3 million deposit by September 12 and show proof of funds in excess of $40 million to enter the bidding pool. Those prospective buyers have the choice to purchase it as a single-family home or as a commercial venue, as it served as the site of a high-end boutique hotel until May.
Casa Casuarina, through Casa Casuarina LLC, was placed into Chapter 11 bankruptcy earlier this summer in an attempt to head off a pending foreclosure. The court's decision to auction it off marks the end of a tumultuous series of suits that have been mired down the beleaguered estate for the better part of two years.
The federal foreclosure suit had been filed in December of 2011 by VM South Beach, an entity affiliated with Jordache Enterprises’ Nakash family and the property's creditor. It alleged that Casa Casuarina's majority owner, telecom entrepreneur Peter Loftin, had defaulted on a $25 million mortgage note. In December of 2012, Loftin countered with his own suit, through Casa Casuarina LLC, against the original mortgage holder WestLB, alleging multiple counts of fraud pertaining to VM South Beach’s note.
As if that hadn't been enough to scare off potential buyers, a bankruptcy trustee also had a claim on the property, because Scott Rothstein, convicted of a $1.2 billion Ponzi scheme, had held a minority share. Adding to the complications, as of January, property taxes had not been paid in three years, reportedly due to a legal dispute between Loftin and Casa Casuarina’s now former hotelier tenant Barton G. Weiss, whose boutique hotel Villa by Barton G. shuttered its business there earlier this year. In May Weiss reportedly filed a separate suit against the property, alleging that Loftin's legal battles with lenders had scared off business.
"I think that was a perceived issue... in that a lot of people were concerned about a lot of things," says Jill Eber of The Jills team that had been exclusively representing the property since its 2012 sale block debut. "Going forward I believe anyone coming to the sale will now know that they are getting clear title."
"We have already been contacted by several law offices," says Lamar Fisher, chief executive of Fisher Auction Company, adding that interest is coming from investors and home buyers alike. "This is the most unique property that has ever been sold at auction."
He might be right. Casa Casuarina spans 23,000 square feet of living space, tucked behind gates on Miami Beach's bustling Ocean Drive. Inside there are 10 bedrooms,11 bathrooms and an observatory, all finished with hand-painted walls and fresco-adorned ceilings. There’s also an entryway flanked by twin sweeping staircases that have since been replicated in newer projects like England’s (once foreclosed-upon) Updown Court. Outside, located off of a private courtyard adorned in mosaic-tiled walkways and sculptures, sits the mansion's most famous amenity: an opulent 54 foot-long pool lined with 24 karat gold.
The Miami Beach manse was built in 1930 by architect Alden Freeman, a well-known architect and philanthropist of the time. The design was inspired by the Alcazar de Colon, the colonial palace where the family of Christopher Columbus once lived. Versace bought Casa Casuarina in 1992 and spent an estimated $33 million on improvements that included a south wing expansion and the golden pool.
In 1997 Versace was shot to death on the doorstep of the mansion, murdered by Andrew Cunanan, a serial killer who had been on America’s Most Wanted list.
Loftin acquired the home from Versace's heirs for $19 million in 2000. The property was restored and the late fashion designer’s eclectic touches conserved before it was eventually leased out to hotelier Weiss in 2009.
All of the property's furnishings, artwork and hand-painted murals come with the sale of the property.
