Thursday, January 22, 2009

Palm Beach Real Estate Roulette

Tomorrow's generation of Palm Beach socialites and swells know how to turn their parent's lemons into lemonade. Having fun with the PB police nowhere in sight, this creative group set up a thriving drive-thru $1 lemonade-and-snack stand across the street from Maison d’Amitie, the Russian fertilizer czar’s $95 million winter palace on North County Road. Seen among the local lemon barons were Alec Mevey, Chloe Garton, Isabel Leader, Alexandra Sherman, Madeline Leader, Max Sherman, Burke Freney and Zachary Sherman, with Dad, Marc Sherman, nearby in case they needed any extra start-up funds.
By Augustus Mayhew

With more of today’s Palm Beach house ads headlined “Price Reduction” rather than “Sold,” and if recent closings are any indication, the island’s probate attorneys are busier that their mega-deal counterparts; if it continues, this writer may have to report on wills rather than warranty deeds. Last week The Times reported that no one is looking at UK’s trophy properties, where once Volga oligarchs nosed out Mumbai billionaires for cozy 150-room country houses and comfy castles. As UK house prices plummet to a 30-year low, Palm Beach spec builders might want to rethink those super-sized chateau mansards. “No doubt about it, we are in deflationary times which is hard on property values,” said Clare O’Keeffe, a longtime PBer and president of the Palm Beach Board of Realtors.

Since the Madoff shockwaves, the national press has portrayed PBers flocking to thrift shops and pawn brokers. Yet, however the media distorts PB as the next Gilligan’s Island, don’t count on it. Although high-end houses and the retail market appear ready for a correction, with hyperactive speculators and luxury logos bearing the burden of the shakeout, it is doubtful most islanders will ever blink.
Paulette Koch, a Corcoran associate, has posted a pending sale notice for 1620 South Ocean Blvd, most recently priced at $13.9 million, seen here along its east elevation overlooking A-1-A and the ocean.
After nine years of air hammers, drills, pile drivers, hurricanes, liens, concrete trucks, lawsuits, demolition attempts, lightning strikes and a massive fire, it appears that Amado, the historic Charles Munn estate at 455 North County Road, has wrapped-up construction. Yes, the back is now the front and the front is now the back, but hey, this is preservation in Palm Beach. William Pencer, Amado’s owner, may now delight in his 21st-century re-restored historic Palm Beach house.

PBers not already bedridden with local election fever, lawn signs are everywhere, are prepping for the February Landmarks Preservation Commission where developers for the Royal Poinciana Plaza and Royal Poinciana Playhouse will seek approval for noted architect, Ann Beha’s plans. Whether you believed the site’s historic designation was a worthy endeavor or akin to an alien abduction, the hearing promises delicious moments of unscripted live Palm Beach theater at its best, as previously witnessed during the Four Winds snafu.
The central entrance portico and carriage house at 589 North County Rd. is located to the north of Montsorrel, the incomparable Henry Kravis estate.
Under contract for more than a year, 589 North County Road closed December 31st, when Leo A. Vecellio, Jr. and his wife, Kathryn C. Vecellio, first took title as trustees for the 589 North County Road Trust, a Delaware Statutory Trust, before taking title individually. In December 2007 the Palm Beach Daily News reported the oceanfront estate was listed for $47 million by a development company that registered Dean DeSantis as president, and also, was under contract for an undisclosed amount, believed to be $40-$47 million. In January 2008 United Bank extended a $42.5 million mortgage on the property, according to court documents. Since the Vecellios took title with a Deed of Trust, the selling price remains undisclosed, having paid only 70 cents in state documentary stamps.

In November 2001, the DeSantis company bought 589 N. County Rd. from the Doris Merrill Magowan estate for $11.8 million, demolished the existing house and built a Mediterranean-style villa with ancillary buildings, comprising 25,000-square-feet of living area. Meanwhile, in the South End, the Vecellio’s more intimate Via Del Mar Fatio-designed lakefront house is still on the market but is now offered at $14.75 million by Paulette Koch, a Corcoran associate, having been purchased in 2002 for $8.225 million. The Vecellio family head up The Vecellio Group Inc., a conglomerate that includes Ranger Construction Company.
223 Coral Lane is the next stop of NYSD’s exclusive Ponzi Palm Beach architectural tour, a Georgian-style house bought by longtime Madoff-associate, Frank J. Avellino, for $4.5 million in May 2004, located a few steps southeast of the Madoff and Jaffe lakefront houses and a few short blocks from the Noel house on Tangier Avenue.
Frank Avellino’s Palm Beach house at 223 Coral Lane may be registered as the home office for the Avellino Family Foundation but, according to court records, Mr. Avellino’s Nantucket housekeeper, Nevena Ivanova, is accusing him of cleaning out her life savings, the subject of recent in-depth media scrutiny, first reported by Jason Graziadei, business writer at the Nantucket Inquirer and Mirror, and then later, in the New York Times.

Designed in 2001 by the Smith and Moore architectural firm, landscaped by the Lang Design Group and built by Llwyd Ecclestone III, the 5 bedroom-6 bath house features nearly 6,000-square-foot of living area with an elevator and a pool. According to state documents, Mr. Avellino shares numerous corporate titles with a Ft. Lauderdale-based philanthropist, Michael Bienes; another reported Madoff middleman known for his noble largesse, charitable deeds and cultivated taste.
550 Island Drive was designed by Henry Harding, located on an Everglades Island waterfront lot overlooking the Everglades Club golf course.
Advertising a $4 million price reduction, Brown Harris Stevens associate, Anne Carmichael, representing the seller, Ian Keen, is ready to cut a deal on 550 Island Drive, chopping its $12.5 million asking to $8.5 million. The Preservation Foundation of Palm Beach archive houses architect Henry Harding’s drawings. Henry K. Harding (1904-1984) studied at the Ecole des Beaux Arts and UPenn before joining Howard Major’s Palm Beach firm.

Harding’s parents owned Chiora, a Wyeth-designed oceanfront house at 560 S. Ocean Blvd. Later, he worked for Wyeth and King before establishing his own firm in Palm Beach and Ocean Ridge. Along with his Palm Beach and Gulf Stream houses, Harding was known for his mid-century designs at Port Royal in Naples, many now demolished. To Mr. Kean’s credit, last week he chalked up $2 million, selling his 402 Primavera Way property to a development company headed by Paul Whitman. The Cushing Demolition trucks have already started their engines.
Seen from the Lake Trail, this North Lake Way property has been associated with Jordan’s royal family ever since the days of James Kimberly’s friendship with King Hussein.
Jordan’s HRH Alia bint al-Hussein and her husband, Mohammad Anwar Al-Saleh have placed a $12 million mortgage from Northern Trust Bank on their two adjacent North End lakefront properties. In July 2008 the couple bought the neighboring property for $11 million, a 7 bedroom-8 bath, 11,000-square-foot house designed in the Mediterranean style, affording them an almost 2-acre waterfront compound. HRH Alia's half-brother is King Abdullah II; her late father, King Hussein, was a frequent Palm Beach visitor, staying with James Kimberly whose house was deeded to Hussein, and following his death, inherited by his daughter.

In other Palm Beach County court proceedings, Mr. Al-Saleh, represented by the Skadden, Arps, et al, law firm, won the right to have his lawsuit against a former partner adjudicated in Palm Beach County rather than in Jordan. Mr. Al-Saleh’s case stems from the failure of his partner, Harry Sargeant, a Gulf Stream resident, to pay Al-Saleh an agreed upon fee, in excess of $15 million + one-third of the profits, for permitting more than $1 billion in Pentagon-contracted oil shipments, destined for US troops in Iraq, to be safely transported through Jordan. Reportedly, House and Senate investigators are monitoring the lawsuit. And, you are surprised that the US paid more than $1 billion to ship oil to Iraq? Mr. Sargeant, the current Florida governor’s former fraternity brother, was Sen. John McCain’s Florida finance chairman.
A landscape crew spruces up 269 Pendleton Avenue the day before its recent foreclosure auction sale, bringing closure to one of the more macabre chapters of PB real estate history, reminiscent of Edgar Allan Poe’s “Tales of the Grotesque and Arabesque.” Overlooking The Breakers golf course to the north, the 1940’s plantation style house is of brick construction and designed by architect John Volk with more than 5,000-square-feet of living area, bearing no resemblance to the Old Bailey court room where the previous owner will be tried for murder in March.
The tarnished provenance of 269 Pendleton has acquired a sparkle of polish. Pendleton Avenue residents, Kelly Moore and his wife, Danielle Hickox Moore, the daughter of the town’s former mayor, Lesly Stockard Smith and niece of actress, Stockard Channing, both are Brown Harris Stevens real estate associates, bought the proverbial house next door for $3.5 million at a highly-publicized January 15th auction. The lender, Americo Financial Life and Annuity, foreclosed on a $3.5 million mortgage that it extended to Thanos Papalexis who purchased the house for $3.1 million in September 2004. As with other Papalexis South Florida ventures, the mortgage went unpaid.

Last month, Thanos Papalexis was arrested by armed US Marshalls while having pizza in West Palm Beach and, a week later, was extradited to London where he was jailed for the strangulation murder of Charalambos Christodoulides, Scotland Yard claiming his DNA was found on the victim. But, even before this grisly finale, Papalexis had already secured a radioactive reputation engaging in a series of delusional business deals specializing in “hybrid boutique properties.” During his brief splash from South Beach to Palm Beach, Mr. Papalexis, a UK citizen, entertained the Clintons at a fundraiser staged at a Manalapan oceanfront house where he was never known to have paid rent.

And news from the tippity-tippity top of the market, Casa Nana is still asking $72.5 million and holding.

Photographs by Augustus Mayhew

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