The new development sales arm of Fortune International Group is suing the Chetrit Group for alleged breach of contract tied to the stalled Miami River development.
Edgardo Defortuna’s Fortune Development Group filed the lawsuit against CG Miami River LLC this week, alleging that it’s owed a $200,000 termination fee, plus other costs incurred.
The Chetrit Group had planned to build a $1 billion, multi-phased mega project at 501 Southwest Third Avenue in Miami with about 1,700 residential units, 330 hotel rooms, 266,000 square feet of retail and office space, and more than 2,000 parking spaces.
According to the lawsuit, filed in Miami-Dade County Circuit Court, Fortune entered into an exclusive sales and listing agreement with the Chetrit entity in August 2015 to sell 318 units at the project. Fortune was hired to create a marketing plan, hire agents to sell units, attend meetings with the developer, market the project to the broker community, and host presentations.
Chetrit and then-partner and consultant Ari Pearl won approval for the megaproject in October 2015, a month after Fortune was hired. But the project has failed to move forward, according to the lawsuit. Since the developer scored approval for its plans more than three years ago, the condo market has lagged, especially for new projects along the Miami River.
“Despite Fortune’s efforts to perform its duties as listed in the Listing Agreement, CG Miami did not progress in the development and became uncommunicative,” Fortune alleges.
Chetrit and Fortune were not immediately available to comment.
New York-based Chetrit closed on a $55 million pre-development loan from Rabina Properties last summer, which replaced prior financing from Natixis Real Estate Capital. The site was previously home to the River Yacht Club, which closed after Hurricane Irma in 2017.
Plans for the riverfront property included four towers, a hotel, shops, restaurants, and a public river walk with boat slips. Phase one would have featured a 56-story building with a 207-room hotel, more than 300 condos, 42,100 square feet of retail and a parking garage.
Chetrit previously bought out its former partner, Michael Stern’s JDS Development Group, in the project. In late 2018, Pearl, a former consultant for the development and a longtime partner of the Chetrit family in South Florida, filed a lawsuit against a Chetrit entity for the final piece of his exit settlement, which was $1.1 million.