Michael Stern’s JDS Development Group is fighting back against its lender, Cottonwood Management, weeks after Cottonwood sued to foreclose on the Mercedes-Benz Brickell condo site.
The site is home to the partially built yet stalled Mercedes-Benz Places, a nearly 800-unit, two-tower development in Miami’s Brickell. In 2020, Atalaya provided a $43 million loan, which the developer refinanced in 2022 through an $86 million loan from Maxim Credit Group. While that matured in late 2023, Maxim repeatedly extended the maturity date for the JDS affiliates. Cottonwood took over the loan in late March of this year.
In Cottonwood’s foreclosure suit filed last month, the lender alleges the developer defaulted when it failed to repay the loan by the January 2025 maturity date. Cottonwood is seeking at least $100 million in damages, including interest.
But the developer’s lawsuit and related filings allege that Cottonwood began its “underhanded proceeding” before even notifying the developer it had purchased the loan. In September, months before Cottonwood took over, the two entered into a non-disclosure agreement over refinancing the Maxim debt. The agreement limited the use of confidential information and prohibited entering other project-related transactions, according to JDS’ complaint.
Court filings say that the foreclosure has caused “immediate, significant and potentially irreparable damage” to the developer and the project. After the foreclosure was filed, the city of Miami notified the developer that it had defaulted under the public benefits agreement, which requires JDS to build a new fire station for the city. JDS’ approval in 2020 hinged on the developer agreeing to build an $8 million firehouse for the city, and $5 million into public benefits, including a redesign of the adjacent Southside Park.
The developer has also “already received requests for rescission and expressions of concern from approximately 10 percent of buyers” with contracts. The foreclosure filing has also deterred new buyers and “significantly impeded” the developer’s efforts to refinance the debt, according to court filings.
Last month, JDS said in a statement that it is working on closing a construction loan package that will replace the bridge financing. A source previously told The Real Deal that JDS is working on financing totaling $750 million.
A number of subcontractors have also filed liens for allegedly unpaid work on the property, court filings show.
JDS declined to comment on this latest lawsuit. Cottonwood and its attorney did not immediately respond to a request for comment.
The project is valued at more than $2 billion once completed, according to the lawsuit. The 67-story development is planned to have 791 condos, 130,000 square feet of amenities and hospitality space, 200,000 square feet of office, health and wellness space, a 174-key hotel, retail and parking.
The project, designed by ShOP Architects, launched sales in 2024 with unit prices starting at $500,000. JDS’ other South Florida development is the Dolce & Gabbana-branded condo project planned for 888 Brickell Avenue. One Sotheby’s International Realty is leading sales and marketing.Stern is in litigation with one of his partners, Gianluca Vacchi’s GV Development. Vacchi’s entity sued Stern and two LLCs in December. The complaint was temporarily stayed, which means it was paused. Vacchi accused his partner of a “deliberated and calculated fraud” tied to a $2.5 million investment in the Casablanca property, an oceanfront condo-hotel at 6345 Collins Avenue in Miami Beach.
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Development
South Florida
Lender moves to foreclose on JDS affiliate’s Mercedes-Benz Miami project
Development
South Florida
Here’s where Michael Stern’s Miami projects stand amid $100M foreclosure suit