The Real Deal Miami

Miami judge partially derails homeowners’ lawsuit against Privé at Island Estates developers

Homeowners associations plan to appeal the decision: "The fight is far from over" attorney says
By Francisco Alvarado | June 22, 2017 05:30PM

Prive at Island Estates on Jan. 26 (Credit: Katherine Kallergis)

Miami-Dade Circuit Judge William Thomas handed the developers of Privé at Island Estates a victory this week in their tumultuous legal war with neighboring homeowners.

Thomas ruled Tuesday that the statute of limitations had long expired for the Island Estates Homeowners Association and the Williams Island Property Owners Association to challenge a vested rights determination agreement. Lawyers for the developers contend the agreement allows Gary Cohen and BH3’s Greg Freedman, Dan Lebensohn and Charles Phelan to build the two-tower, 160-unit condo project in Aventura, which is almost complete.

The associations sued the developers in 2013 in an attempt to stop construction of the Privé condo development on the basis Cohen had agreed in the late 1990s to only build single-family homes on the project site, which is on an isle north of Williams Island.

“We are confident the court got it right,” said Glen Waldman, a partner with Waldman Barnett representing the developers. “We are absolutely within our rights. Therefore, the buildings will be done in the next 30 days. Any claims impeding the completion, the selling [of units], having people move in and giving them an amazing lifestyle are all gone.”

In siding with the developers, Thomas wrote that homeowners had five years from 2006, when the vested rights agreement was recorded, to challenge it in court. The Williams Island association did not file its lawsuit until April 2013 and Island Estates did not file until October 2013.

“We have counterclaims seeking between $30 million to $50 million,” Waldman said. “Those are very much alive and are bolstered by this ruling.”

Susan Raffanello, a shareholder with Coffey Burlington representing the homeowners associations, said she and her clients were surprised by Thomas’ order, especially since a previous judge, Jerald Bagley, had denied earlier attempts by the developers to have their claims on the vested rights agreement thrown out.

“Obviously, we disagree with the basis for the court’s ruling,” Raffanello said. “In fact, we had won on that issue numerous times with the previous judge. We are extremely confident an appellate court will overturn the decision. The fight is far from over.”

Raffanello also noted that Thomas is allowing the claim by the Island Estates association that the road easement for the Privé project was intended for single family homes to move forward. “We are going to trial on the easement issues,” she said. “In the declaration, it states the road will be used for single family development on the North Island. We are very comfortable with our evidence [on that issue].”

The associations and the developers also have two other pending lawsuits against each other.

In January, New York-based Maxim Capital and Austin-based Prophet Capital Asset Management provided $102 million in financing to the developers, adding to a previous $25 million loan from Maxim. Privé, on an 8-acre island at 5000 Island Estates Drive, topped off in November at 16 stories and is more than 70 percent sold with more than $300 million under contract, according to the developers.