New York developer Michael Stern allegedly welched on paying $10 million to another investor for securing rights to build a mixed-use tower in Miami’s Brickell neighborhood, according to a recently filed lawsuit.
Southside Place LLC is suing Stern and his company, JDS Development, in Miami-Dade Circuit Court to enforce its deal, which involved obtaining air rights over an existing fire station at 1111 Southwest Second Avenue, according to the suit.
In late February, the Miami City Commission approved a public benefits agreement with a JDS Development entity that allows Stern to build a $500 million, 62-story tower on the fire station site and an adjoining property at 191 Southwest 12th Street that he purchased last year.
The project will encompass 1,000 rental apartments, 200 micro-units, a 200-key hotel, 250,000 square feet of office space and a new $8 million fire station. The city also gets roughly $2.2 million in cash for fire station equipment, about $5.4 million in public benefits and $200,000 in streetscape improvements, and will pay for the renovations to the park and the transfer of development density rights, according to the public benefits agreement.
However, Southside Place alleges it conducted all the legwork to obtain the zoning approvals for redeveloping the two sites, and backed off its initial plan to buy 191 Southwest 12th Street in order to flip the project to Stern for a $10 million assignment fee.
Michael Green, Southside Place’s lawyer, declined comment. A JDS Development spokesperson said Southside Place’s claims are baseless. “We expect this frivolous lawsuit to be quickly dismissed,” the spokesperson said. “JDS is committed to delivering this exciting project for the benefit of the community and the city.”
According to the complaint, Southside Place — which is managed by an offshore company called Crystal Clear Holdings — secured a public benefits agreement with the city in 2018 when it was negotiating to purchase 191 Southwest 12th Street. However, Southside Place “encountered difficulties” with the property’s then-owner and began talks with Stern to take over the project, according to the suit.
“Stern promised to acquire the adjoining property if Southside would assign its interest under the Public Benefit Agreement to Stern, and Stern would, of course, compensate Southside for Southside’s efforts,” the complaint alleges. “Southside, based on Stern’s promises, introduced Stern to the broker handling the sale of the adjoining property, so that Stern could begin efforts to acquire that property.”
Southside Place alleges Stern agreed neither he or anyone acting on his behalf would approach and negotiate with the city directly. Instead, after acquiring 191 Southwest 12th Street, Stern caused city officials to cancel the previous agreement with Southside Place in order to sign a deal only with him, according to the suit.
“Stern and [his development entity] were only able to obtain their public benefit agreement with the City of Miami because of Southside’s efforts,” the lawsuit claims. “Despite this, Stern [has] refused to deliver any compensation to Southside.”