City of Miami sues to foreclose East Little Havana apartment complex

City is alleging developer is in default of a $3M mortgage

Teatro Marti Apartments
Teatro Marti Apartments

UPDATED July 12, 1:50 p.m.: The city of Miami is looking to foreclose on Biscayne Housing Group’s 27-unit Teatro Marti Apartments in East Little Havana.

The city recently filed a foreclosure lawsuit for the 37,415-square-foot building at 400 Southwest Eighth Avenue after Miami leased the property to the developer and awarded it a $3 million mortgage, the South Florida Business Journal reported.

The lawsuit takes issue with a recent change in ownership after two of Biscayne Housing Group’s managers, Michael Cox and Gonzalo DeRamon, appointed attorney Joel Tabas as the company’s main operator. The city is alleging that all changes in management and ownership of Teatro Marti Apartments must be approved by the city. Appointing Tabas would place the mortgage in default, according to the suit.

Cox and DeRamon have been in the muck before. In December, they were among seven developers who pleaded guilty for inflating construction contracts to the Florida Housing Finance Corp. in two projects co-developed by Biscayne Housing Group and Carlisle Development Group. Together they stole $36 million in federal government funds.

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Cox and DeRamon were sentenced to 18 months in prison, home confinement and ordered to forfeit $4.4 million each to the federal government.

The Teatro Marti Apartments development, which was completed in 2014, was not cited as one of the projects in part of the fraud indictment.

Last year, former Carlisle executives were convicted of stealing $34 million in subsidies by inflating construction costs for more than a dozen affordable housing developments in Miami-Dade County.

The U.S. Attorney’s Office is cracking down on affordable housing fraud in Miami-Dade County. Biscayne Housing Group and Carlisle are among several other developers whose projects were listed in a subpoena to the county, including Carrfour Supportive Housing, the Cornerstone Group, Pinnacle Housing Group and Related Urban Development Group. Federal prosecutors now are trying to determine whether developers inflated construction costs. [SFBJ] – Amanda Rabines