Lake Worth's Gulfstream Hotel: Bahraini Petrodollars, the Black Gatsby, and Foreclosure | The Daily Pulp | South Florida | Broward Palm Beach New Times | The Leading Independent News Source in Broward-Palm Beach, Florida

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Lake Worth's Gulfstream Hotel: Bahraini Petrodollars, the Black Gatsby, and Foreclosure

The fate of the Gulfstream Hotel, the faded crown jewel of Lake Worth's historic downtown, appears at first glance to rest in the hands of the Schlesinger family of Palm Beach and Connecticut. The hoteliers/developers bought the property in 2005 but have fallen on hard times. The hotel is in foreclosure, likewise the family's luxurious Omphoy, on Palm Beach, and Traymore, on South Beach. The Gulfstream's plight is a problem for Lake Worth, whose residents have long dreamed fondly of the day when the hotel, shuttered some years, would reopen and greet fresh streams of visitors to regenerate the town's economy.

But the path to rebirth may prove murkier than a simple restructuring of the Schlesingers' assets. Their mortgage note is held -- Fire Ant has learned -- by an imploding Wall Street hedge fund with roots in the financial black hole of the Cayman Islands. The fund's identity and that of its CEO -- a controversial and combative Wall Street figure -- lies hidden in a maze of property records, court documents, newspaper archives, and regulatory filings.

Less hidden -- though its present ownership interest is unclear -- is the role of a globe-spanning Mideast investment group whose multiple billions, like the Wall Street fund's, are also rendered opaque via the Caymans. The Persian Gulf investors may or may not have washed their hands of the Gulfstream.

Who are these actors, how are they interrelated, and what do they intend for the Lake Worth hotel? New Times repeatedly reached out to all involved -- to their offices, their lawyers, and their media reps. Nobody's talking. So all we know is what we found along the paper trail. Here's what it shows.

HIDDEN HAND ONE/JULY 2005: The Schlesingers announce their purchase of the Gulfstream for $13 million. They promise to renovate the interior, "transforming the popular Lake Worth landmark into a distinctive boutique luxury hotel." They have a partner in the deal, Investcorp, with whom they soon also buy up the Palm Beach Hilton, renaming it the Omphoy Ocean Resort, and Holiday Isles, in Islamorada.

In the Schlesingers' announcement and in news reports, Investcorp is described only as a New York-based "global investment group." Fair enough, but incomplete.

Bahrain-based Investcorp -- with $12 billion in assets -- is basically Mideast petrodollars flowing back through the Cayman Islands and buying up property throughout the Western world -- everything from Italian vending machine manufacturers and French auto parts distributors to Seattle kitchenware retailer Sur La Table and American Banker magazine. Forbes once called its CEO, Nemir Kirdar (an honorary fellow at St. Antony's College, Oxford, no less), "Michael Milken in a burnoose."

Fire Ant finds it unsettling that Bahraini oil wealth depends on a certain amount of stability (AKA crushing pro-democracy protests) in the little island kingdom. But what the heck? Their money's green.

(Investcorp claims to have sold its interest in the Gulfstream in November 2011. But since its arrangement with the Schlesingers is shielded by Delaware corporate registration, we'll just have to take its word for it.)

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