Sued away again in Margaritaville: Newmark claims chain breached exclusive contract
Brokerage says Jimmy Buffett-founded chain owes it at least $3.5M
All is not well in Jimmy Buffett’s famously laid-back Margaritaville.
Newmark Knight Frank is suing the restaurant and hotel chain for breach of contract, claiming that it purposefully froze the brokerage out of its deal for a major development in Times Square.
The relationship between Newmark and Margaritaville dates back to late 2011, when Newmark’s George Graf cold-called the flagship location in Orlando and spoke with representatives about helping it expand to New York, according to the lawsuit. The two companies entered into an exclusive agreement the next year, giving Newmark the sole right to handle all Manhattan real estate deals for Margaritaville and requiring the chain to refer all questions and offerings about real estate it received to Newmark for negotiations, court documents say.
The initial agreement was set to last for one year, and it was ultimately extended through June 30, 2017, the suit says.
Newmark showed Margaritaville about 43 possible expansion locations in states including New York, New Jersey and Virginia over the course of their agreement, and the brokerage also “made a continuous effort to keep the Margaritaville brand name ever-present and at the top of the mind of the real estate community in New York City,” according to the lawsuit.
However, Newmark alleges that Margaritaville still intentionally cut it out of its massive deal for a West 40th Street complex that will include a hotel and five Margaritaville-branded bars and restaurants. Margaritaville representatives admitted to the brokerage that they were working with the company IMCMV Holdings and without Newmark on this project in May 2017, according to the lawsuit.
Margaritaville’s Chief Development Officer Jim Wiseman allegedly reassured Newmark on June 30, 2017 — the last day of the exclusive agreement between the two companies — that “‘[w]hen we have something definitive I will call you and we’ll try to work something out.’” The hospitality chain then chose not to extend the agreement, and Newmark relied on Wiseman’s assurances that they would figure something out to get paid, according to the lawsuit.
However, Newmark says it still hasn’t received any money for any aspect of the Times Square deal and claims in the lawsuit that it is owed at least $3.5 million. The suit also requests a jury trial to resolve the situation.
Representatives for Newmark and Margaritaville did not respond to requests for comment.
Sharif El-Gamal is co-developing the Times Square site at 560 Seventh Avenue with brothers Chip and Andrew Weiss. The 30-story hotel is expected to open at the end of 2020 with 234 rooms across 170,000 square feet, and the developers landed a $270 million loan for the project from Related Fund Management, Angelo Gordon and Hana Financial Investment earlier this year.