The Real Deal Miami

More owners sue Chateau Beach developers, contractors over explosion

Lawsuit refers to damages related to explosion at building now nicknamed "Chateau Boom"
By Katherine Kallergis | December 08, 2016 01:30PM

Rendering of Chateau Beach. Inset: Dan Whiteman and Manuel Grosskopf

Rendering of Chateau Beach. Inset: Dan Whiteman and Manuel Grosskopf

Two additional unit owners are suing the developer, contractor and a subcontractor of Chateau Beach Residences, a luxury condo tower completed last year in Sunny Isles Beach, seeking millions of dollars in damages tied to a gas explosion on the top floor of the building last year.

Arer Investments LLC and Saltwater Trading Corp. filed the suit in Miami-Dade Circuit Court on Wednesday against Chateau Beach LLC, Coastal Construction of South Florida and Professional Plumbing, according to a copy of the complaint obtained by The Real Deal.

They allege that the explosion, which injured six in October 2015, has damaged the value of their units and the 34-story image of the building, referred to in the lawsuit as “Chateau Boom.” Chateau Group delivered the project at 17475 Collins Avenue a month before the explosion, and following the incident, the city of Sunny Isles Beach revoked the condominium tower’s certificate of occupancy. The building continued to be “unsafe for occupancy” while repairs were being made until June 2016, according to the lawsuit.

Arer Investments, a Delaware company, paid $5.7 million for unit 2201, while Saltwater Trading Corp., a Delaware corporation controlled by Silvino Faustino Medeiros Neto, paid $2.6 million for unit 1503. Both entities allege that the eight-month period when they couldn’t access the building coupled with the “complete loss of value of the units” caused them to incur almost $10 million in combined damages.

Lana M. Naghshineh, an attorney for the plaintiffs, told TRD it would be difficult for her clients to sell their units now that the building is “stigmatized” by the explosion and subsequent effects. A final certificate of occupancy has not been issued, she said. “All of the unit owners in the building have been affected.”

In August, the owners of units 1103, 1003 “and all similarly situated unit owners” also sued the developer and Coastal over nearly identical allegations.

Naghshineh said the developers have been helpful, but called their settlement offers insulting. “Forty thousand [dollars] here or there is not going to compensate someone who paid so much for their unit,” she told TRD.

Sean Murphy, co-president of Coastal Construction, said through a spokesperson that the company has not had a chance to review the complaint in detail. “At the present time, the building has been fully repaired, has passed all inspections, and is occupied and fully operational,” Murphy said.

The Chateau Group, led by Manuel Grosskopf, did not immediately respond to a request for comment. Chateau completed Fendi Chateau Residences in Surfside in September.

“My clients don’t want this to go on for years,” Naghshineh said. “They’re reasonable people.”