INDIAN RIVER COUNTY — The Mandala Club, a planned community that was to be built with “non-toxic, health-promoting construction protocols” and “environmental sensitivity” has been placed in foreclosure and will be sold at the county courthouse Wednesday morning.
The 39-acre, 90-home project near Winter Beach was expected to break ground last year, but instead will be auctioned off after the PNC Bank (formerly National City Bank) prevailed in a $2.85 million civil suit. Named in the suit were the Mandala Club, Mandala Development Group and company officers David Ederer, Donald Proctor and Richard Bialosky.
Mandala Development Group originally took out a loan from Harbor Financial Savings Bank (which later was rolled into National City Bank) for $700,000 in June 2003 for the property. The company went back to the bank a couple years later to get another $3.14 million.
Between 2006 and 2009, Mandala Development was able to pay down the loans by $1 million, but by October 2009, the company had not paid off the full amount. It was supposed to by April 1, 2008.
Since Sept. 9, 2009, the development firm has been accruing interest of nearly $1,100 daily. The company owes $2.2 million on the principal of the loan and another $642,000 in interest.
Circuit Court Judge Paul Kanarek ruled on Nov. 13, 2009, that Mandala Development owed PNC Bank nearly $2.85 million and set a courthouse auction for the property on Feb. 17 at 11 a.m. in Courtroom 139.
Representatives from Mandala Development did not immediately return a call for comment Monday afternoon.
Both Proctor and Bialosky could be held personally liable for up to $420,000, according to court records. Ederer and Mandala Development would be responsible for the remainder. Bialosky and Proctor signed guaranty forms that limit their liability to $280,000 and $140,000, respectively.
Mandala Club had been hailed as a unique community that would combine “age-old principles of Maharishi Vedic Architecture, non-toxic and health-promoting construction protocols, environmental sensitivity, and an emphasis on planning techniques that promote a sense of community,” the development’s Web site states.
The developers had expected to break ground on the community’s infrastructure last year with the first homes being available in mid to late 2010.
