Airbnb sues Miami partner in branded apartments concept

Airbnb wants its $11M investment back from its partnership with Hernandez’s Newgard Development Group

TRD NATIONAL /
Jan.January 24, 2020 06:58 PM
Harvey Hernandez (Credit: Airbnb)

Harvey Hernandez (Credit: Airbnb)

Airbnb accuses Miami real estate developer Harvey Hernandez of defrauding the short-term rental company and diverting funds that were to be used for an apartment-sharing concept.

Airbnb claims it invested $11 million in a partnership with Hernandez’s Newgard Development Group to offer Airbnb-branded apartments. Newgard was supposed to open at least seven of these projects, including in one in Kissimmee, Florida, in in 2019, according to Airbnb’s lawsuit filed Thursday in Northern California. So far, Newgard has failed to open a single project.

Hernandez could not immediately be reached for comment.

The lawsuit comes as Airbnb prepares for its planned initial public offering this year.

According to the suit, Airbnb planned to provide the capital, and Newgard and Hernandez were to then manage, operate, and market rental properties throughout the United States.

Instead, Airbnb alleges “NGD and Hernandez stole funds, made unauthorized loans to other Hernandez-controlled companies, fraudulently backdated documents, breached contracts, and then lied repeatedly in an attempt to cover their tracks.”

Airbnb alleges Hernandez siphoned off $1 million of the investment into another one of his projects, Natiivo in Miami. Airbnb alleges Hernandez and Newgard tried to disguise the investment as a loan by producing fraudulent and backdated documentation that showed Hernandez as the signatory on behalf of both borrower and lender. The “loan” is now in default and remains outstanding, according to the lawsuit. Airbnb is demanding the return of its $11 million investment and wants out of its contract.

The Financial Times first reported the lawsuit.

It is not the first time Hernandez has faced major legal issues with his real estate developments.

In 2016, Hernandez’s development company was sued over a failed robotic car garage he installed at the luxury condo tower Brickell House in Miami. In September, a Miami-Dade County judge awarded the Brickell House condo association $40.6 million from the development group after the technology malfunctioned and left residents without a working garage.


Related Articles

arrow_forward_ios
From left: Mayor Bill de Blasio, 54 West 39th Street, 62 Grand Street, and 208 West 30th Street (Credit: Google Maps)

The Airbnb crackdown continues: City targets three more buildings

The Airbnb crackdown continues: City targets three more buildings
Mayor Bill de Blasio and Stanley “Skip” Karol, an Airbnb host (Credit: Getty Images and Youtube)

Airbnb host narrowly clears hurdle in First Amendment claim against city

Airbnb host narrowly clears hurdle in First Amendment claim against city
A West Village Airbnb listing (Credit: Airbnb)

Airbnb Luxe launched without listings in one of their biggest potential markets — why?

Airbnb Luxe launched without listings in one of their biggest potential markets — why?
Clare Bronfman and 8517 Franklin Avenue (Patrick McMullan/Getty, Zillow)

Heiress and sex cult financier sues over Los Angeles infinity pool

Heiress and sex cult financier sues over Los Angeles infinity pool
Backal Hospitality Group CEO Arthur Backal, 627 West 42nd Street and Moinian Group CEO Joseph Moinian (Images via Backal, Google Maps, Moinian)

Win for Moinian is bright spot for commercial landlords

Win for Moinian is bright spot for commercial landlords
Quarters CEO Rui Barros and 251 DeKalb Avenue in Brooklyn (Credit: Linkedin and Google Maps)

“Schoolyard-style” dispute between landlord and co-living firm

“Schoolyard-style” dispute between landlord and co-living firm
Walker Tower at 212 West 18th Street with in-contract buyer Ron Vinder (left), and prior owner Khadem al-Qubaisi (right) (Images from JDS Development, Morgan Stanley, Pixabay)

Walker Tower board fights “low-ball” sale of 1MDB-linked penthouse

Walker Tower board fights “low-ball” sale of 1MDB-linked penthouse
Gap at 1530 Broadway (Google Maps)

Gap must keep paying rent at Times Square flagship: Judge

Gap must keep paying rent at Times Square flagship: Judge
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...