Holiday Isle Beach Resort and Marina, Islamorada's legendary party spot and once a center of the village's bustling charter boat industry, is facing possible foreclosure.

Property owner Ceebraid-Signal Corp. has failed to make payments on $77 million in loans, according to a lawsuit filed by financiers on Jan. 28. The suit names several individuals and companies associated with Ceebraid-Signal.

Ceebraid-Signal, a West Palm Beach-based developer, acquired Holiday Isle in April 2006 for a whopping $98 million. The company had planned to redevelop the 151-room resort into a hotel-condominium with units starting at $1.2 million, but the project was killed by the crash of the real estate market.

Since then Holiday Isle has seen its fortunes dwindle, prompting a batch of layoffs in the fall. Its famous charter fishing fleet also has dwindled, with captains headed for frequented venues such as Whale Harbor and Bud 'n' Mary's Marina.

In the foreclosure suit, lender VII Isle Funding, a vehicle of Connecticut-based private investment firm Starwood Capital Group, alleges that Holiday Isle has defaulted on the $77 million loan made in April 2006, and owes the full amount plus accrued interest and other costs and fees. VII Isle Funding further alleges that though Holiday Isle is continuing to earn revenue, that revenue has not been used to maintain the property. The Ceebraid-Signal affiliates "are otherwise committing economic waste," the suit says.

Ceebraid-Signal President Adam Schlesinger declined to take a phone call from The Citizen Friday. Bill Walker, a partner with the White & Case law office in Miami, which is representing the financiers, said he was not authorized to speak about the case. Holiday Isle General Manager Jack Miller provided a brief statement.

"As a far as I'm concerned, it is business as usual, and it's my job to operate this place and I plan to continue to do so," he said.

The foreclosure suit against Holiday Isle, Islamorada's second-largest resort, comes as the town's largest hotel facility, Cheeca Lodge, is closed indefinitely due to a New Year's Eve fire.

Steve Leopold, one of the charter captains who remains at Holiday Isle, said he's not sure what to think of the latest news.

"At some point it is going to be cheaper to close it down, I would think," he said. "But I don't have any different opinion about what is happening than I have all along. It's wait and see."

Agreements between Cee-braid-Signal and VII Isle Funding call for the appointment of a receiver if Ceebraid-Signal defaults on the loan, according to the foreclosure action. Such an appointment would take operation of Holiday Isle out of Ceebraid-Signal's hands and place it under court oversight.

rsilk@keysnews.com