A company owned by investor Remy Jacobson has filed suit against the sellers of his recently acquired Design District building, alleging they knew the property would soon be designated historic and therefore more difficult to develop.
Miami Acquisitions Trust LLC and 4141 Design LLC are suing One Fountainhead Center LLC, Roberto G. Bravo, Ana M. Bravo and Manny A. Varas in Miami-Dade County Circuit Court in late August for alleged breach of contract, fraudulent inducement, conspiracy to commit fraud, negligent misrepresentation and more.
Jacobson bought the building at 4141 North Miami Avenue for $10.5 million in April, but put it on the market later this year for sale at $15.5 million, as well as for lease.
The lawsuit alleges that One Fountainhead Center and the others sold Jacobson the property because they knew it would be substantially more difficult to develop with a historic designation. The deal closed April 20, and about two weeks later, the property received historical designation from the city of Miami as a “contributing structure,” which restricts the use and value of the building, according to the suit.
The sellers claim they weren’t aware of the historic designation and that “no such proceedings existed” despite receiving notice from the city, the suit says. It goes a step further, and alleges that Varas, who’s currently developing the property across the street, abandoned his attempts to redevelop 4141 North Miami Avenue and instead sell because of the challenges a historic designation provides. A Miami historic preservation website shows the building is in the Buena Vista Historic District.
The suit says Varas, who is also president and CEO of MV Group, claims he was only involved as a broker on the deal, despite receiving a $525,000 developer fee in addition to the $630,000 brokerage fee.
Varas could not immediately be reached for comment.
As TRD previously reported, Tony Arrellano of Metro 1 Commercial represented Jacobson in the sale. In June, Metro 1 said the plan was to either sell, or to renovate and lease the building to a restaurant tenant and/or retail tenants. The renovation would take anywhere from 12 to 18 months. Arrellano also could not immediately be reached for comment.
The nearly 16,000-square-foot building sits on a 9,700-square-foot lot with 100 feet of frontage on North Miami Avenue. It’s around the corner from the De La Cruz Collection and the new Institute of Contemporary Art Museum.
Across the street, Varas is building a mixed-use, Mediterranean-style building at 4136 North Miami Avenue with retail and office space.