Lincoln Road landlord seeks $32M following court victory over Walgreens

LLC tied to Richard Chera seeks to recoup future rent, taxes and other damages

Miami /
Oct.October 05, 2020 10:30 AM
 Richard Chera of Crown Acquisitions, 947 Lincoln Road rendering

Richard Chera of Crown Acquisitions, 947 Lincoln Road rendering

A company tied to New York City real estate mogul Richard Chera is looking to collect nearly $32 million from Walgreens after the pharmacy chain lost a civil lawsuit over a Lincoln Road store that never opened.

On Sept. 22, Miami-Dade Circuit Judge William Thomas granted summary judgment to Chera’s 947 Lincoln Road Holdings, effectively rejecting Walgreens’ legal claim for breaking a 10-year lease agreement signed in 2015.

Walgreens had planned to open a store inside a redeveloped historic building at 947 Lincoln Road, but Miami Beach officials passed legislation that prohibited retail pharmacy stores before the company applied for permits in 2018.

Chera, principal of Crown Acquisitions and a son of the late Stanley Chera, closed on 947 Lincoln Road for $25.7 million in 2018.

“Timely applying for a building permit was a mandatory condition to terminate the Lease, and it was not timely satisfied,” Thomas wrote in his ruling. “Based on the undisputed record before the court, Walgreens purported termination of the Lease was untimely.”

Mark Heise

Mark Heise

947 Lincoln Road Holdings filed a motion on Sept. 25 seeking accelerated future rent, accelerated real estate taxes, development damages and other expenses totaling $31.7 million from Walgreens. Mark Heise, co-counsel for 947 Lincoln Road Holdings, said his client is gratified that the judge ruled Walgreens has to honor its lease agreement.

“Walgreens kept saying it was unfair to make them pay rent [$25 million over 10 years] for space that they could not use for a Walgreens,” Heise said in a statement. “But that is what they bargained for.”

Representatives for Walgreens did not respond to requests for comment.

According to the complaint, the landlord was obligated under the lease to obtain entitlements from the Miami Beach Historic Preservation Board that would allow Walgreens to obtain building permits to redevelop the building. The board approved the entitlements, including a near total demolition of the building, in October 2017.

The property was originally developed in 1924 as Mediterranean Revival-style structure.

Both landlord and tenant negotiated the lease knowing that zoning could change and thereby prevent the operation of a Walgreens on Lincoln Road, Heise said. According to Thomas’ order, Walgreens missed an April 23, 2018 deadline to obtain the building permits, waiting months to apply for them.

Thereafter, the city of Miami Beach changed the zoning to effectively prohibit Walgreens from operating on Lincoln Road. Walgreen subsequently sued 947 Lincoln Road Holdings seeking a declaration that it did not have to pay for the 10 years of the lease term. The pharmacy chain had agreed to pay $209,000 a month plus real estate taxes.

Following a Sept. 9 hearing, Thomas issued his ruling that rejected Walgreen’s claim that 947 Lincoln Road Holdings had improperly obtained the entitlements through fraud.


Related Articles

arrow_forward_ios
Alex Rodriguez and Constantine Scurtis at far right (Getty)
A-Rod gets 13 lawsuits dismissed that were filed by ex-brother-in-law over real estate empire
A-Rod gets 13 lawsuits dismissed that were filed by ex-brother-in-law over real estate empire
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
Foreclosure lawsuit targets DoubleTree hotel near Miami International Airport
830 Brickell and the co-developers Cain's Jonathan Goldstein and Vlad Doronin (Getty, OKO Group / Cain International)
Lease roundup: Canada’s CI Financial picks Brickell for new US HQ
Lease roundup: Canada’s CI Financial picks Brickell for new US HQ
Harvey Hernandez and a rendering of his Brickell project
Harvey Hernandez plans three-tower project on riverfront Brickell site
Harvey Hernandez plans three-tower project on riverfront Brickell site
Louis McMillian of Global International Realty and real estate investor Thomas Conway, president of Miami-based Conway CRE (Global International Realty, LinkedIn via Conway)
Jumping the gun? Miami brokerage sues developer for commission on future Bellsouth land deal
Jumping the gun? Miami brokerage sues developer for commission on future Bellsouth land deal
AIMCO founder Terry Considine and a rendering of the Grand Flamingo tower
Miami Beach board rejects Aimco’s proposal for Grand Flamingo tower
Miami Beach board rejects Aimco’s proposal for Grand Flamingo tower
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Infinity project (Kobi Karp)
GPI Real Estate wins $6M settlement over failed Sunny Isles Beach project
GPI Real Estate wins $6M settlement over failed Sunny Isles Beach project
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...