A month after Ronny Finvarb completed a Kimpton Hotel in Miami Beach, a general contractor is accusing the developer of skipping out on more than $4 million in unpaid construction work.
Hollywood-based Emerald Construction Corp. sued Finvarb’s Sobe Alton LLC for nonpayment in Miami-Dade Circuit Court on April 9.
The Kimpton Hotel Palomar South Beach at 1750 Alton Road opened in early March, about two weeks before Miami-Dade Mayor Carlos Gimenez ordered all county hotels, motels and short-term rental properties to shut down operations to help slow the spread of coronavirus.
Emerald’s lawyers Oscar Soto and Jose Rodriguez did not respond to phone messages and emails requesting comment.
Trey Tate, Sobe Alton’s attorney, disputed that his client owed any money to Emerald. “Sobe Alton disputes all claims raised by Emerald in the complaint,” Tate said. “Sobe Alton is current on all payments to Emerald and will respond accordingly in court.”
According to the lawsuit, Sobe Alton and Emerald Construction entered into a contract in April 2017, about a month before Finvarb secured a $27.56 million construction loan to build the 96-key hotel near Miami Beach’s Sunset Harbour neighborhood. The loan was provided by a consortium of TotalBank, Florida Community Bank and Apollo Bank.
The project was slated to be completed in 2018, but faced “owner-created and design delays” that resulted in an adjustment to the construction timeline, Emerald Construction alleges.
“Despite Emerald Construction making proper and timely claim for extended general conditions and additional time of performance as a result of these delays and added scope of
work, owner has refused to acknowledge or otherwise compensate Emerald Construction accordingly,” the lawsuit states.
Furthermore, Sobe Alton allegedly refused to approve and fund more than 50 change orders despite requesting them in order to complete the hotel, Emerald Construction claims. In addition, Finvarb’s company has failed to mediate the dispute, despite numerous attempts by Emerald Construction to settle its bill, according to the suit.
Emerald Construction claims it provided a total value of $19.7 million in construction labor, services and material, and is owed roughly $3.7 million. Combined with interest and attorney fees, Emerald Construction is seeking more than $4 million in damages.
Finvarb’s Kimpton Hotel was designed by Kobi Karp with Permuy Architecture as the architect of record. The five-story building features a central atrium, a rooftop pool and a restaurant space overlooking Collins Canal. Finvarb built the property next door to the Marriott Residence Inn South Beach, which the Finvarb Group developed.