Affiliates of the Chetrit Group are facing foreclosure of their long-shuttered hotel, The Tides South Beach.
SHEDDF3 VNB LLC, tied to Safe Harbor Equity, filed a foreclosure lawsuit against CG Tides and other companies linked to the New York-based Chetrit Group over the 11-story hotel at 1220 Ocean Drive, court records show.
Joseph Chetrit, a founding partner of the family owned company, did not immediately respond to a request for comment.
The Tides has been closed since Hurricane Irma hit South Florida in 2017, according to the Miami Herald.
The pandemic has wreaked havoc on the hotel industry nationwide, with some properties opting to stay closed until tourism rebounds.
The complaint alleges that the Chetrit entities and Cuesta Construction failed to satisfy the mortgage, which was due Dec. 20. Chetrit secured a $45 million mortgage for the hotel and an assemblage of properties behind the hotel in 2014. Ocean Bank was the lender. In January, Ocean Bank sold the debt to the Safe Harbor Equity affiliate.
According to the lawsuit, filed in Miami-Dade Circuit Court on Thursday, Chetrit secured more than half a dozen extensions until it allegedly missed its final payment.
In addition to allegedly failing to pay off the loan, the borrowers failed to maintain the minimum level of insurance required under the terms of the mortgage, the lawsuit alleges.
Safe Harbor is seeking the unpaid principal of nearly $42 million, plus interest, attorneys’ fees and other costs. A spokesperson for Safe Harbor said that the borrower has “made indications that [it’s] seeking to refinance the loan” but has not yet done so.
The properties include the Art Deco hotel on Ocean Drive, plus a mixed-use building fronting Collins Avenue that Chetrit redeveloped.
Chetrit has stalled on other projects in South Florida, including a major mixed-use development it planned along the Miami River. That project, valued at $1 billion, was expected to have about 1,700 residential units, 330 hotel rooms, 266,000 square feet of retail and office space, and more than 2,000 parking spaces.
It also owns a project under construction in Collins Park in Miami Beach and the shuttered Miami Beach Resort, an oceanfront hotel at 4833 Collins Avenue.