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Real estate partnership lures "vultures'

Vulture investors are circling Arvida/JMB Partners LP, the big developer of Florida residential communities that has interests in the Tampa Bay area.

The vultures, who buy troubled assets on the cheap to sell them later at hefty profits, include corporate raider Carl Icahn and Leon Black, the junk bond arbitrageur who last year took a significant stake in Tampa's Walter Industries Inc.

Also circling is Goldman, Sachs & Co., known for its strong-arm tactics in gaining control of Canadian real estate company Cadillac Fairview Corp. and New York landmark Rockefeller Center.

Each seeks a controlling stake in Boca Raton-based Arvida/JMB before October 1997.

That's when whoever is in control of the partnership has the option of buying out minority investors at a "fair market value," according to Securities and Exchange Commission filings.

With Arvida/JMB's partnership shares down about 75 percent since its founding in 1987, the vultures see a chance to buy cheap the partnership's valuable land holdings in Florida. Arvida has about $354-million in assets, mainly land throughout Florida zoned for residential development.

Arvida/JMB is developing the fast-growing River Hills community east of Tampa. It also has developed some of Florida's most prestigious communities, including Grand Bay on Longboat Key in Sarasota.

Even though Arvida/JMB's communities have been a hit, its units _ a partnership has units in the same way a corporation has shares _ have not. They are trading at about $245 each, down from the $1,000 each investor shelled out when the $400-million partnership was formed in 1987. The units suffered amid the recession and real estate crash of the early 1990s.

It appears unlikely original investors will ever recoup their investment, never mind a profit.

That's a scenario the vultures love.

Icahn, who originally sought to make a bid on his own, has joined Black and Miami-based Lennar Corp., one of the fastest-growing homebuilders in Tampa Bay. The odd partnership is seeking to buy a 46 percent stake in Arvida/JMB for $85.3-million.

Goldman, Sachs, meanwhile, teamed up with Arvida director Neil Bluhm and is seeking a similar stake in the company for about $78.1-million.

Arvida/JMB has called both bids inadequate.

But that hasn't stopped the vulture investors from circling.

_ Times staff writer Robert Keefe contributed to this report.