The Real Deal Miami

Cambridge slapped with suit alleging fraud over retail project in Fort Lauderdale

Developer had to hire second general contractor to finish job

November 09, 2016 10:30AM
By Sean Stewart-Muniz

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Rendering of the furniture showroom at 105 North Federal Highway

Rendering of the furniture showroom at 105 North Federal Highway

The gloves have come off in a Fort Lauderdale dispute between a high-end furniture showroom’s developer and its former general contractor.

Happy Land Fl., a company controlled by Sergey Slastikhin, just hit Cambridge Construction with a lawsuit alleging the builder committed fraud, among other counts, by refusing to pay subcontractors and causing liens to build up against the developer.

The suit, recently filed in Broward County Circuit Court, centers around the $4.75 million construction contract Cambridge won in early 2014 to build a roughly 36,000-square-foot retail store at 105 North Federal Highway.

According to the complaint, Cambridge caused a heap of problems that resulted in delays and liens against the developer over the course of the project’s construction. For one, the builder allegedly failed to pull permits for subcontracting work like plumbing and HVAC systems before starting work. The city even stepped in to shut down the site in February 2016 after Cambridge started working off of revised plans before submitting them, the suit says.

To make matters worse, according to the complaint, the subcontractors themselves weren’t getting paid, even though Happy Land was paying its construction bills to Cambridge.

At least nine liens piled up against the developer for more than $550,000, according to the suit. Happy Land eventually had to shell out $230,000 to clear out the subcontractors’ claims.

The dispute came to a boiling point in July of this year, when the developer fired Cambridge and brought on Coastal Construction to finish the job.

Construction progress as of January this year

Construction progress as of January this year

City documents show the building was originally meant to house a single tenant, which would use the space as a furniture showroom to supplement its online orders for high-end condo clients throughout South Florida. A representative for the project said Elite Homes, a luxury retailer that does business in Miami and New York, was originally slated to be 105 North Federal Highway’s tenant, but that’s since fallen through and the building is without a tenant. The project’s manager declined to provide additional comment.

It’s unclear whether the situation with Cambridge led to Elite Homes backing out.

The project is expected to be finished early next year and is seeking a tenant for its three floors, each of which boast about 12,000 square feet of leasable space.

Happy Land is now seeking a trial by jury against Cambridge for counts of fraud, breach of contract, unjust enrichment, and a “per se” violation of Florida’s Deceptive and Unfair Trade Practices Act.

A request for comment to Torry Watson, Cambridge’s CEO and a defendant in the suit, was not immediately returned. The contractor has worked on several of Ocean Land Investments’ boutique condo developments in South Florida, namely the Aquavita and Aqualuna.

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