New Owners Considering Purchase of Sirenusa from Banco Popular Affiliate

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A company is now assessing the unfinished multi-story condominium project above Cruz Bay and has until the end of the month to decide whether it will purchase the property from its current owner, BP Sirenusa International LLC, an affiliate of Banco Popular.

Carlo Marzano, Sirenusa’s original developer/owner, gave the property to Banco Popular in lieu of foreclosure on his more than $50 million mortgage with the bank in late August.

 

“The bank received an offer on the property subject to due diligence, but the due diligence time period has not expired as of yet,” said George Dudley, a partner in the law firm, Dudley, Topper and Feuerzeig, counsel to Banco Popular and its affiliate. “They have until the end of September to complete their due diligence.”

Likening the due diligence period to test driving a car before purchase, Dudley said the potential buyers are in the process of examining the current state of affairs pertaining to construction, permits, the relationship with the contractors and various matters related to the unfinished property.

“There is a company that is examining the property, and if it is found to be satisfactory, then they will proceed with the transaction,” he said.

Dudley would not disclose the names of the potential owners nor the price tag of the hillside property.

“I know that they are represented by several persons from Puerto Rico, but I have not met the principles, I’ve only dealt with their agents,” Dudley said.

Controversial Variance
Originally zoned R-2, Sirenusa received a controversial zoning variance to accommodate its larger-than-allowed development in April 2007.

The Act (6925) granted a variance to the property from R-2 (residential low-density, one and two family) to R-3 (residential medium density) for the construction of two, four-story buildings and one three story building — and making a $50,000 appropriation to the Juan F. Luis Hospital on St. Croix for two hemodialysis machines.

Governor John deJongh vetoed the variance, but all senators in the 27th Legislature, with the exception of Senator Louis Hill, voted to override the veto in May 2007.

“The property is zoned R2 but the legislature gave the variance to allow R3 and that was illegal,” explained Jamal Nielsen, public information officer for the Department of Planning and Natural Resources. “A variance does not allow for changes to the dimensions; it allows for the use, not the dimensions, of the building, so that was an illegal act by the legislature.”

Nielsen said a variance should not allow a development to go from R2 to R3.

“If it was a variance of a use, we would stop it, but when the building is built already, then there is no use for a variance to be transferable because it was already built,” he said. “The whole thing was corrupt from the beginning.”

Variances are granted to the subject property, not the property owners, according to V.I. zoning codes and laws, which means they are transferable to new owners.