Caroline Weiss locked in legal conflict with daughter over $21M loan tied to massive Blue Lagoon development

UPDATED, July 15, 5:50 p.m.: Developer Caroline Weiss is locked in a mother-daughter feud that could unravel her plans for a massive mixed-use project in Miami’s Blue Lagoon.

A vacant 7-acre waterfront assemblage on Northwest 7th Street and Northwest 48th Avenue is at the center of the family conflict. The site, which consists of three separate properties, has been owned by the Weiss family since the 1970s, records show.

Adeena Weiss Ortiz is accusing her mom of committing fraud in an effort to squeeze her out of her stake in the assemblage, as well as fraudulently obtaining a $21.3 million loan secured by the land.

Weiss Ortiz’s chances of torpedoing the loan hinges on the outcome of a Friday evidentiary hearing in Miami-Dade Circuit Court, where she filed a lawsuit in April against two development entities managed by Weiss and the lender, TIG Romspen. Weiss Ortiz also has a pending eight-year-old lawsuit contesting ownership of the land where the project will be built.

Essentially, Weiss Ortiz is claiming title to the development site by alleging her mother fraudulently deeded the assemblage to entities solely under Weiss’ control a decade ago, and therefore had no authority to enter into the loan agreement with TIG Romspen. Along with the lawsuit, Weiss Ortiz filed a lis pendens, which places the assemblage under the court’s control until the dispute is resolved.

Attorneys for Weiss and TIG Romspen insisted their clients will prevail because Weiss Ortiz recently lost a court ruling in the other case that makes similar allegations. “There is no merit to this matter,” Chris Smart, a Tampa-based lawyer representing TIG Romspen, said in an emailed statement. “We are waiting for the court to dismiss it given it was previously adjudicated.”

Michael Schlesinger, Weiss’ attorney, said Miami-Dade Circuit Court Judge Migna Sanchez-Llorens, who is presiding over the separate 2014 case, concluded Weiss Ortiz has no standing to have the loan nullified. “This is basically a repeat of the same allegations that were already ruled on by [Judge Sanchez-Llorens],” Schlesinger said.

Weiss Ortiz appealed the Sanchez-Llorens ruling which is still pending, court records show.

Until the issue of ownership is cleared up in court, the lawsuits put a cloud on the title for the assemblage, Schlesinger said. “[Weiss] is in the process of discussing a joint venture or doing another development with other parties,” he said. “The lis pendens, which we claim was wrongfully filed, will hinder refinancing of the loan, a sale of the property or a joint venture.”

Weiss Ortiz, a Chicago-based lawyer who also has a license to practice in Florida, said she is fighting for her stake in a highly valuable development site. “The two cases are intertwined, as I am an owner of the properties that have been wrongfully mortgaged,” Weiss Ortiz said. “It has affected my ownership interests to my detriment.”

Weiss Ortiz and her Miami attorney Maurice Baumgarten declined to comment on the specific allegations in the lawsuits.

In 2020, TIG Romspen took over a bridge loan from a previous lender, BI 27, and increased the amount to $21.3 million, according to a copy of the mortgage document. The borrowers are entities solely managed by Weiss, records show.

In 2019, Weiss’ firm Weiss Group of Companies secured approval from the city of Miami to double the development site’s maximum building height from eight to 16 stories. Weiss Group, which is also co-led by Weiss’ other daughter Alitza Weiss, proposed a Kobi Karp-designed project with 882 apartments and two hotels with a total of 433 rooms. The plans also show a parking component, improved roads and pedestrian walkways.

In her complaints and court motions, Weiss Ortiz included various deeds and corporate documents showing that in 1995, after her father Jack Weiss passed away, her mother was removed as shareholder for three entities under the name Towers of Blue Lagoon that owned the properties. As a result, Weiss Ortiz and her sister Alitza were the sole owners.

In September 2021 court affidavits, Alitza and Caroline Weiss disputed Weiss Ortiz’s claims that she and her sister were meant to be the sole owners of the assemblage. In her statement, Caroline said her and her late husband always planned to develop the site and “there simply was no intent to give” the properties to her daughters.

Corporate and property records show that in 2012 Weiss created three new duplicate entities using the same name Towers of Blue Lagoon, and those new entities conveyed the properties to her estate. Two years later, Weiss’ estate transferred the deeds to another trio of limited liability companies under the name 7 at Blue Lagoon, which are solely controlled by Weiss.

In December 2014, Weiss Ortiz filed the first lawsuit, alleging her mother committed fraud through the 2012 creation of the duplicate entities in order to remove her and her sister as the assemblage’s rightful owners. The daughter also accused Weiss of taking out the BI 27 $5 million loan even though she “was not a director, officer, shareholder, authorized representative or agent” of three Tower entities, the lawsuit states. Weiss Ortiz’s sister, her father’s estate, the Weiss-managed entities and BI 27 were also named as defendants in the 2014 lawsuit.

In the most recent complaint, Weiss Ortiz also alleges that Weiss had no authority to sign the mortgage documents for the $21.3 million TIG Romspen loan.

Weiss Ortiz seeks to have title to the assemblage reverted to the three original Tower entities and to terminate the $21.3 million loan, the complaint states.

In a motion to dismiss the most recent Weiss Ortiz lawsuit, TIG Romspen noted that Judge Sanchez-Lorens issued a ruling in the 2014 case that the original $5 million loan was valid. As a result, Sanchez-Llorens granted summary judgment in favor of BI 27 and removed the lender as a defendant. Sanchez-Llorens found that Weiss Ortiz had “failed to offer any summary judgment proof of this fraudulent conveyance or how the fraud was apparent from the face of the deeds,” TIG Romspen’s motion states.

A non-jury trial involving the remaining defendants took place in April, but Sanchez-Llorens has not issued a final ruling, court documents show.