Congress Group and Encore Capital Management are in a legal battle over Doral mixed-use project

Real estate firms are in dispute over control of 24-acre site as $74M loan is due in August.

TRD MIAMI /
Jul.July 08, 2019 08:45 AM
Art Falcone and Dean Stratouly

Art Falcone and Dean Stratouly

With a $74 million construction loan due in mid-August, two prominent real estate investment firms are locked in an acrimonious dispute over ownership of a partly completed mixed-use project in Doral.

In a lawsuit filed last month in Miami-Dade Circuit Court, a shell company controlled by Boston-based Congress Group alleges that it was illegally ousted from the partnership that owns the 25-acre multifamily and retail development on the northeast corner of Northwest 58th Street and Northwest 107th Avenue.

The complaint accuses an affiliate of Boca Raton-based Encore Capital Management Group, headed by Miami Worldcenter co-developer Art Falcone, of violating an operating agreement. It alleges the affiliate tried to sell its stake in the Doral project, known as Landmark South, to a third party while muscling out Congress Group.

Dean Stratouly, founder and CEO of Congress Group, and the attorneys representing his firm, did not respond to requests for comment. Joe DiCristina, Encore’s president of multifamily investments, said Congress’ claims are unfounded and misdirected. He claimed that it was Stratouly’s firm that wanted to force Encore out of Landmark South.

“Congress was looking to refinance and take us out of our investment,” DiCristina said. “The terms and logistics of that fell apart and caused certain violations in our agreements.”

Still, DiCristina said, Encore looks “forward to resolving this amicably over the next month.”

In 2014, Encore and Congress teamed up to buy the development site for $30 million amid a hotbed of development in Doral. The property is directly next to Landmark at Doral by Lennar Homes, as well as close to other residential and mixed-use projects by Terra, Terranova Corp.  and Century Homebuilders.

For Landmark South, the developers are planning two eight-story buildings with a combined 630 residential units, split between 420 rental apartments and 210 condos. Landmark South will also include 60,000 square feet of commercial space, a children’s park, tennis courts, a 5,000-square-foot gym and a parking garage with more than 1,000 spaces.

In 2016, Encore and Congress secured a $73 million construction loan for the project from Bank OZK, then known as Bank of the Ozarks. According to the lawsuit, the outstanding principal, $74.16 million, is due to be paid in full on August 16.

Congress claims that Stratouly managed the project and is responsible for having completed the first phase, which entailed two luxury apartment buildings with 418 units. Stratouly also worked out a deal to sell the commercial retail portion of the project to another developer. Construction of the second phase could commence within a few months, according to the lawsuit.

While in discussions on how to move forward with the second phase and whether or not to refinance the Bank OZK loan, Encore entered into an agreement to sell its interest to an unrelated third party without Congress’ consent, the lawsuit states. When Congress refused to accept “unreasonable terms and conditions” for a new operating agreement with the third party, Encore wrongfully removed Congress from the partnership, the complaint alleges.

“Encore is disappointed and its goal of cashing out of the project has been frustrated because the terms of its sale are unacceptable,” the lawsuit states. “In order to sell on those terms, Encore decided to create a pretextual subterfuge.”


Related Articles

arrow_forward_ios
Venezuelan leader Nicolás Maduro and the city of Caracas (Credit: Wikipedia, iStock)

Venezuelan government looks to seize homes of Venezuelans living abroad: report

Donald Trump, and Trump National Doral Miami golf resort (Credit: Getty Images and iStock)

Trump disputes report that Doral golf resort has bedbugs

Felipe Valls Jr., 9000 Northwest 25 Street in Doral (Credit: Getty Images, Google Maps)

Family behind La Carreta and Versailles sells Doral shopping center

Donald Trump and Trump National Doral (Credit: Getty Images)

Donald Trump’s Doral golf resort may host the G7 summit: report

Investors score Doral office and retail complex for nearly $7M

Investors score Doral office and retail complex for nearly $7M

Clockwise from top left: Doral View and Town Fontainebleau Lakes, Alister Boca Raton, Luma West Palm, Glen Apartments, Avana Cypress Creek Apartments

Here are South Florida’s top five multifamily sales in June

Feds to seize Miami real estate allegedly tied to $60M Venezuelan money laundering scheme

Feds to seize Miami real estate allegedly tied to $60M Venezuelan money laundering scheme

Publix at Doral Plaza Shopping Center and Randall T. Jones Sr. Publix CEO (Credit: Google Maps)

Publix goes shopping, buys Doral retail center for $70M

arrow_forward_ios