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Steve Bailey | Downtown

The King downsizes

Bill Lilly with Valerie Kaan at their Boca Raton, Fla/, home in better times. In the background are their Rolls Royces.
Bill Lilly with Valerie Kaan at their Boca Raton, Fla/, home in better times. In the background are their Rolls Royces. (Richard Sheinwald Photo for The Boston Globe / File 2005)

How bad is the real estate market? Bad enough to make Bill Lilly, a.k.a "The Condo King," put his beloved yacht, the We Won, up for sale. Asking price: $6 million, but something tells me that's as negotiable as all those unsold condos piling up in the glutted Florida real estate market.

Such is the cyclical real estate business. When last I visited with Lilly in Boca Raton two years ago, the red-hot South Florida real estate market was still booming, and he was more than glad to crow about "the greatest turnaround in the history of any real estate developer."

The high-living felon had all the toys to attest to his return to the top: the $9.4 million, 13,500-square-foot replica of one of those ornate Lake Como estates; the his and her Rolls Royces in black and white for the king and his queen, Valerie Kaan; and the 94-foot yacht at the dock out back.

It was a remarkable recovery for a man, once Massachusetts' largest condominium developer, who spent 5 1/2 years in prison after he was convicted of bank fraud amid New England's great real estate crash of the early 1990s. "I am the best, there is no question about it," Lilly told me then. Last Friday he was not nearly so buoyant, not at least about his and the market's immediate prospects.

"Tough times in real estate. It is bad," Lilly told me on the telephone. "The prices have dropped so fast. They are dropping in front of your eyes."

Bay Communities Real Estate, controlled by Lilly and Kaan, has given back five big condo projects - nearly 1,200 units in all - to its lender, according to Florida press reports, and has a long list of unpaid loans to bankrupt USA Capital in Las Vegas.

Last weekend Lilly put his yacht on the block at the Fort Lauderdale International Boat Show, billed as the world's largest boat show. He said "crew issues" were behind his decision to sell, but said he wouldn't be buying another boat any time soon if he could unload this one.

According to the website Charterworld.com, Lilly's 2002 Ferretti motor yacht rents for as much as $44,500 a week, accommodates up to nine guests in four cabins, and comes with a crew - cranky or not - of four.

The We Won was more than a yacht for Lilly - it was a symbol of his return as the king. After his rebound, the flamboyant Lilly used to delight in mooring the We Won just off the federal courthouse in Boston as a way to taunt the US attorney's office, which prosecuted him. This spring Lilly made the final $750,000 payment on the $5 million restitution deal he cut with the government.

Times may be tough, but Lilly remains confident of his ability to rebound yet again. "We're injured, but we are not down. We will be back," he says. He says he has worked his inventory down from 1,500 units to less than 100. With prices down, he thinks now is a buying opportunity. "We will make more money in the next five years than we did in the last 10," he says.

. . .

Neighborhood news. After being rebuffed several times in the past, the Boston Herald is now again in talks about printing the tabloid at The Boston Globe on Morrissey Boulevard, according to an executive briefed on the discussions. Boston Herald publisher Pat Purcell has made it clear he wants to get out of the printing business and redevelop his property. Purcell has also investigated printing the Herald at Dow Jones & Co.'s plant in Chicopee; the Globe recently began printing both The Enterprise of Brockton and The Patriot Ledger of Quincy. The talks between the Globe, owned by The New York Times Co., and the Herald are said to be very preliminary. "We are talking to several people, including the Globe, about doing production for us," said a Herald spokeswoman. A Globe spokesman said any discussion about an agreement was "premature."

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.

 
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THE CONDO KING Read previous Globe coverage of Bill Lilly at boston.com/business.

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