Disgraced developer Rishi Kapoor allegedly failed to pay back an investor’s $792,000 deposit on a pre-construction condo at Villa Valencia in Coral Gables, according to a recently filed lawsuit.
The investor and Kapoor had no intention of consummating the purchase, the complaint alleges. Juan Gronlier sued Kapoor and two Villa Valencia entities on Aug. 29 in Miami-Dade Circuit Court for breach of contract, fraudulent misrepresentation and unjust enrichment.
In July, Kapoor resigned as CEO of Location Ventures, the Coral Gables-based development firm that completed the 39-unit Villa Valencia last year. The firm has since imploded under an avalanche of lawsuits by other investors and vendors.
Kapoor is also at the center of an FBI public corruption probe and a separate joint investigation by the Miami-Dade state attorney and ethics commission into his business dealings with Miami Mayor Francis Suarez. In addition, the Internal Revenue Service and the Securities and Exchange Commission are also investigating Kapoor’s management of Location Ventures, the company he founded in 2016.
In the latest civil complaint. Gronlier alleges that he was under contract to buy a fifth-floor Villa Valencia unit that Location Ventures ultimately sold to another buyer. Kapoor made a deal with Gronlier to pay him back his $792,000 deposit or provide him a 7.9 percent equity stake in Villa Valencia prior to all the units being sold, the lawsuit alleges. Gronlier claims he received neither.
In a text message, Kapoor denied the lawsuit’s allegations, asserting that Location Ventures did make Gronlier a minority partner in Villa Valencia.
“The facts as Juan has presented them are not accurate at all, and he is trying to revise the past,” Kapoor said. “He asked and agreed to convert his purchase to an equity interest in the project, which we have documentation for.”
Kapoor added that he would respond in detail to the lawsuit through “the appropriate legal process.”
Location Ventures is now managed by former Miami-Dade Judge Alan Fine, who has been charged with liquidating all of the firm’s assets to pay off creditors.
Last month, the city of Coral Gables agreed to use proceeds from a construction bond to finish minor punch list items and some public infrastructure components at Villa Valencia, so the project can obtain a final certificate of occupancy. Villa Valencia generated more than $100 million in sales for Location Ventures.
In 2020, Kapoor allegedly convinced Gronlier to invest in Villa Valencia by having him agree to a $1.9 million purchase contract for the fifth floor unit, and paying a $200,000 deposit. Kapoor allegedly told Gronlier that he needed to have a certain number of units pre-sold or under contract to meet the terms of construction financing for Villa Valencia, the lawsuit states.
In exchange, Gronlier and the Villa Valencia affiliates had a side deal allowing him to back out of the purchase contract at any time with no penalty, or be paid any profits from the sale of the unit to another buyer procured by Location Ventures, the lawsuit alleges. Gronlier also had until April 30 of this year to close on the unit.
After the Villa Valencia entities obtained the construction loan, Location Ventures paid Gronlier back his $200,000, but the purchase agreement obligated him to make a second deposit for $792,000, the lawsuit states.
In the event the unit was not sold to another buyer by Dec. 31, 2020, Gronlier’s $792,000 would be repaid as services provided by his company, J & P Tiles, which was a Villa Valencia subcontractor, the lawsuit states. Kapoor and the Valencia entities used the deposit money to cover construction expenses, Gronlier alleges.
Instead of paying back the $792,000 through tile work, Kapoor told Gronlier in 2021 that he would pay him interest until the unit was sold to another buyer, the lawsuit states. Kapoor also allegedly “promised Gronlier” to convert the $792,000 deposit into the 7.9 equity stake in the 13-story condo project. But Kapoor never provided Gronlier with proof of his minority interest in Villa Valencia, according to the suit.
In June of last year, Location Ventures sold Gronlier’s unit to another buyer for $1.9 million, but did not tell him about the sale, the lawsuit alleges. And he is still allegedly waiting for his $792,000 refund.
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