As seen on CBS 60 Mins this was the downfall of Treaty Oak Bank & Jeff Nash who lent the money outside of his market and without knowledge of his board of directors. Not to mention that the developer hired a contractor who had never built a high-rise. bankalchemist.

Also known as: Faulty Towers, or The Leaning Tower of South Padre Island.

We see this as a great opportunity to get a bargain right now on what will become the finest quality built tower – in the best location – on South Padre Island. The views and amenities are unmatched, and the units are the some of the largest on the Island.

So began the wonderful pitch for the doomed Ocean Tower on South Padre Island in Texas.

The 134-unit skyscraper on a narrow strip of sand just close to the Mexican border began as ambitious project to create 31-stories of unprecedented views over the ocean. It was touted as the “highest structure in the Rio Grande Valley”. Amenities included with each condo were “Italian marble floors, granite counter tops, stainless steel appliances, custom cabinets, stainless steel fixtures, over-sized Jacuzzi tub and stand-up showers.”

In May of 2008, however, developers noticed cracks in the columns supporting the parking garage. The official explanation is that the parking garage and the tower were mistakenly built connected, forcing the weight down upon the garage instead of on more solid “expansion joints”. The use of expandable clay, which compresses when weight is applied to it, compounded the issue and allowed the parking garage to remain relatively unsettled compared to the tower itself. Preliminary evaluation showed that the tower’s core had sunk 14 to 16 inches, while the attached parking lot had shifted less than half that distance. By July, Ocean Tower was reassuring investors that while the project will be delayed, the skyscraper would reemerge “stronger and safer than ever”. The news broke on November 4, 2008, with a letter to investors:

We are deeply disappointed to report that the construction of Ocean Tower, which was suspended in May, has been terminated with no immediate prospects for completion.

It sat abandoned until September of 2009 when plans were unveiled for its demolition. The 376-foot unfinished skyscraper was brought down with a controlled implosion on December 13, 2009. At 55,000 tons, it is claimed that it was the largest implosion of a reinforced concrete structure in the world. With nearly 98 percent of the above-grade materials used to build the tower scheduled for recycling or reuse, the developers hope to recuperate at least some of the losses.

Of the $75 million loan the developers obtained for building the skyscraper, it is estimated that $65 million evaporated in the rubble. They are currently seeking a $125 million settlement with the geotechnical engineering firm Raba-Kistner Engineering and Consulting of San Antonio and structural engineers Datum Engineers of Austin and Dallas.

Owner and developer Antun Domit of Domit Development was quoted as saying:

We did the right thing that we needed to do. You do what you need to do and it was a great project, I wish this would not happen but it did happen.

Sources:

Leaning condos on South Padre Island to be demolished

Faulty Tower’s Implosion Will Set New Height Record

Promotional video for Ocean Towers, SPI

Zachry company building luxury high-rise on South Padre Island (pdf)

Alice Donahue Real Estate, South Padre Island Texas

Ocean Tower Building Crashes Down

South Padre Island’s Ocean Tower to be demolished and recycled (pdf)