Six years ago, mixed-use project Lotis Wellington scored zoning approval, with a development partner at the time presenting the plans for an ambitious community with residences, retail, restaurants and offices.
But the partly finished project in Palm Beach County has devolved into developer infighting playing out in court, as well as two lawsuits and a flurry of liens adding up to over $5 million of allegedly unpaid bills to subcontractors and a potential restaurant tenant, according to records.
Lotis Group’s known partners are James Gielda, Adam Freedman and John Markey, a trio that has been in real estate together since 2009. But they had a falling out recently, according to court records.
Two of the development partners, who are fighting each other in court, said they’re paying off the debts, and one of them said most of the liens have been satisfied.
Lotis Wellington is underway on the west side of State Road 7, north of Wellington Regional Medical Center. Roughly 16,500 square feet of offices and 35,000 square feet of retail in five buildings are completed, a day care is nearly finished, and construction on a restaurant outparcel and 372 apartments is planned, Gielda said.
Lennar is developing 100 single-family homes and 72 townhomes, and the developers want to sell to another developer a portion of the site entitled for 60,000 square feet of medical offices, Gielda said.
Part of the alleged debts include over $1.5 million to Cooper’s Hawk restaurant, which sued Lotis Wellington in February, claiming it’s owed the funds, plus 8 percent annual interest, as part of a construction allowance and for building a service yard on the site, according to the complaint. Lotis Wellington denied the allegations in court, and its attorney declined to comment.
Subcontractor Fine Line Electric sued this month, alleging it’s still owed $331,817, plus 8.44 percent annual interest, for work it did on the project, according to the complaint.
Roughly $5 million of liens have been filed this year, with Ferreira Construction filing one of the biggest, for $1.2 million allegedly unpaid under a $22.2 million contract for earth work, storm drains, lift stations, roadways, sidewalks and lake excavation. Other liens include one by Fontoura Stone Flooring for $46,528 for precast concrete and tile installation in the day care, and a Dixie Plumbing Service lien for $135,492 for plumbing labor and materials for the retail portion, according to records.
One of the larger liens appears to be an inter-company claim for $2.9 million filed by Lotis Builders, the project’s general contractor, which is led by Gielda and Freedman, against Lotis Wellington, the site owner.
In March, Gielda and Freedman sued Markey, alleging that after he separated from Lotis in 2023 he continued to contact company investors, partners, consultants and other personnel, misrepresenting himself as a “person with authority” in projects and trying to “influence or disrupt” Lotis operations, according to the Palm Beach Circuit Court complaint. His separation and redemption agreements barred him from such communication, the suit says.
Under the agreements, Markey transferred his stake in any joint limited liability companies to Gielda, Freedman and their affiliates for $2 million total to be paid off monthly through 2029 to a Markey affiliate, the complaint and its exhibits allege.
The lawsuit references a January email Markey sent outlining a “strategy” to remove Gielda and Freedman as managers of the Lotis Wellington project and a Tamarac apartment project, appoint himself and Brian Lulfs as managers and “seize control of accounting records, server, staff and bank accounts,” according to the email that is included as an exhibit to the complaint.
The email claimed Freedman had made and “concealed” loans to Lotis at a 15 percent interest without investor approval, financing nearly $3.3 million in loans and paying himself nearly $286,600 in interest. Freedman and Gielda “conspired” with each other and commingled funds, Markey wrote in the email.
Gielda and Freedman’s lawsuit, which raises defamation, injunctive relief and breach of redemption and separation agreements claims, says Markey’s statements in his email are false and defamatory.
Markey denied the allegations against him in a court filing and countersued, demanding an accounting of the amounts Gielda and Freedman received in loans and investments, and the distribution of those investments.
Gielda declined to comment on the suit, and Freedman and Lulfs didn’t immediately return requests for comment. Markey declined to comment.
As The Real Deal started making inquiries about the alleged Lotis Wellington debts to a spokesperson that previously provided information about the project, the spokesperson responded with a news release that announced Markey “has come out of retirement to reassume leadership” of the project.
Markey and his partners have purchased all of the project’s debt and are “actively” working to bring all vendor accounts current, address outstanding obligations and ensure partners are paid, the release says.
The spokesperson confirmed Markey retired three years ago but said he remained an owner of Lotis Wellington.
Markey will prioritize “restoring confidence and stability” to Lotis Wellington, the release says.
The release doesn’t specify who Markey’s partners are.
Records show that in March, an entity led by Lulfs, called Wellington Bailout, was assigned millions of dollars of loans to Lotis Wellington LLC, which owns the project’s development site, and entity Salmon Wellington LLC.
Gielda said “a significant number of liens and invoices have been paid as of last Friday,” adding that this resolution isn’t yet reflected in public records.
Lotis Wellington has a focus on nature, with Markey’s news release describing the project’s centerpiece as more than a 35-acre lake and cypress preserve with a public pedestrian and biking path that will include a dog park.
PopStroke, a mini-golf provider tied to Tiger Woods, pulled out of Lotis Wellington this year. Since then, the village of Wellington has approved a restaurant and retail building on the site, Gielda said.