Richard Chera, the New York investor who purchased the Van Dyke building in July 2012, had begun targeting another hot property — 947 Lincoln Road — as far back as April 2012, according to a commission claim document filed with the court.
That’s before the property was tied up in three years of litigation between the owner, Leon Zwick, and potential buyers Michael Comras and his partners, the Cayre family of New York. It’s also before Chera signed a new deal for 947 Lincoln, which remains tied up in lengthy litigation.
Broker’s commission for Chera deal
Zwick, the owner of both 947 and 940 Lincoln Road, had signed a document to pay a $620,000 commission to broker Eric Hochman, CEO of Vortex International Realty, to exclusively procure a deal with Chera on April 9, 2012, the commission claim document shows.
Hochman confirmed to The Real Deal on Thursday that he was “the procuring broker of Richard Chera or any related entity of Richard Chera for the exclusive right of sale of 947 Lincoln Road.” He declined to provide the sale price, or disclose Chera’s plans to redevelop the property.
Michael Schlesinger, Zwick’s attorney, told TRD that Zwick had signed a listing agreement for the property for 45 days.
“A company owned by Chera went to contract on 947 prior to Comras, but they terminated the contract,” he said via email. “We are aware of the broker’s claim, but believe there are legal and factual defenses to the suit.”
Chera and his family own New York-based Crown Acquisitions and Crown Retail Services. In addition to the Van Dyke building at 846 Lincoln Road, Crown Acquisitions owns such Manhattan properties as 450 Park Avenue, the St. Regis, 650 Madison Avenue, the Olympic Tower, 261 Fifth Avenue, 358-362 Fifth Avenue and 600 Broadway, among others, according to the company’s website.
Crown’s first acquisition in South Florida was the historic Van Dyke building, the former home of the Van Dyke Cafe, which it bought for $16 million from Mark Soyka, Miami-Dade property records show. The building is now leased to lululemon.
The document citing Hochman’s commission serves as a notice of lien on sale proceeds, tied to Comras and Cayre’s litigation. That litigation, which has blocked the sale of both buildings, now may be nearing the end, after a judge last month ruled in favor Zwick. Comras and Cayre vow to appeal the judge’s decision, according to their attorney, Todd Legon.
940 and 947 Lincoln
Zwick and his late brother had bought the two Lincoln Road buildings in 1984 and 1986.
In October 2012, Zwick entered into a deal to sell 940 Lincoln and 947 Lincoln to an entity managed by Comras and the Cayre family — including Robert Cayre and his uncle Harry Adjami — legal documents show.
Soaring property values on Lincoln Road
Just up the street this September, Comras and his partner Jonathan Fryd sold the entire block from 1001 to 1035 Lincoln Road to Spanish billionaire Amancio Ortega for $370 million, or $7,708 per square foot for the land and $4,933 per square foot for the buildings. The transaction marked one of the largest real estate deals in Miami-Dade history.
In the 2012 Comras and Cayre deal, the property at 947 Lincoln was to sell for $25 million and 940 Lincoln for $61 million, according to a 96-page deposition from Comras. That equates to about $3,822 per square foot for the land and an average of $1,911 per square foot for the buildings.
Miami-Dade property records show that back in the mid-’80s, the Zwick entity had paid $301,000 for 947 Lincoln Road and $585,000 for 940 Lincoln Road. The buildings, with 8,625 square feet and 36,377 square feet, were built in 1925 and 1926, respectively.
Deal to sell is derailed
On Dec. 19, 2012, nine days before the scheduled closing, Zwick’s sister, Bella Miller, sued both sides involved in the deal in an attempt to prevent the sale from closing, legal filings show. The notice of lis pendens claimed she had a right to the ownership of both properties.
At the same time, Comras and Cayre were becoming concerned that the seller was not complying with pre-closing obligations to remove existing tenants from the building, legal documents show.
On Dec. 28, 2012, the buyers exercised their right to terminate the contract and requested the return of deposits. Their attorney, Legon, partner in Legon Fodiman, said they had been told that the seller could not go forward with the sale because of the sister’s suit, and that Zwick would re-enter into a contract once that issue was resolved. “It was an oral promise that they said we will redo the contracts,” Legon told TRD. Zwick’s attorney Schlesinger said his client disputes that allegation.
Zwick agreed to the cancellation, and Comras and his partners received their deposits back: $5.5 million for 940 Lincoln and $2.3 million for 947 Lincoln, said Schlesinger, of Schlesinger & Associates, who is co-counsel along with William Davis of Foley & Lardner.
Chera signs new deal
Zwick then entered into a separate contract to sell 947 Lincoln to the Richard Chera family, Schlesinger said.
The deal was signed the day after the termination, but email correspondence shows it was arranged while Comras and Cayre’s deal was still pending and before it was terminated, in violation of exclusivity and “no shop” provisions, Legon said.
The sale of 940 was also in discussion while Comras and Cayre’s contract was pending, Legon said.
According to Schlesinger, Comras and Cayre were upset with the pending sale, and sued Zwick in February 2013 in three different complaints. One stated that Zwick asked them to cancel and gave them an oral extension to buy the property for the same price in the future. Another said they had an option of first refusal to buy the property. And the third said they were fraudulently induced to cancel.
“We did not seek to enforce an oral promise,” Legon said. “What we were saying is that we were fraudulently induced to terminate the contracts.”
New deal in flux
Schlesinger told TRD that Chera is under contract with Zwick for 947, but “we can’t close until the case closes.” He declined to disclose the sale price. “We can’t transfer title. All the litigation is holding up the sale of the building,” he said earlier this week.
Zwick moved for summary judgment, and last month, Miami-Dade Circuit Court judge Migna Sanchez-Llorens granted it, except for one count of breach of contract. She also dissolved Zwick’s sister’s lis pendens, which had been dismissed by another court in November 2013 for lack of merit, and was affirmed on appeal.
The next chapter
“Now 947 is close to being sold to Chera, and 940 is closer to being free so Zwick can do what he wants with it,” Schlesinger told TRD. “They used the legal system to hold these buildings hostage for three years.”