Developer Michael Swerdlow is pushing an affordable residential retail project in Miami's Overtown neighborhood after a prospective website developer partially won a lawsuit against him.
Sverdlov, CEO of the Sverdlov Group, will begin construction on Sawyer & # 39; s Landing early next year with 578 affordable housing units, including 85% for residents aged 62 and over and a Target-anchored 251,000 square meter retail segment.
Sverdlov is a partnership with SJM Partners Inc., with offices in Delray Beach and Virginia, and with Alben Duffie in the 3.44-acre development at 249 NW Sixth St., steps from Brightline's Miami Central Station.
It is a controversial property called Block 55 because subsidiaries of well-known black developer Don Peebles and entrepreneur Barron Channer sued Sverdlov in April after the city ended previously granted development rights to the Peebles-Channer warehouse and to Sverdlov and its downtown retail Associates LLC had awarded.
Peebles and Channer claimed backroom deals between Sverdlov and the city's Southeast Overtown / Park West Community Redevelopment Agency seeking developers gave them a pretty much won right.
A subsidiary of the Sverdlov Group, Block 55 Owner LLC, bought the vacant lot from CRA on September 2 for $ 10 million. This is evident from the records of Miami-Dade County.
This is the day Miami-Dade Circuit judge Michael Hanzman issued a summary judgment in favor of Sverdlov for breach of contract.
Peebles and Channer said the CRA urged them to enter into a purchase and sale agreement with Sverdlov for membership shares in order to sell their stake, despite winning the call for development. The CRA is not a defendant.
They cited two breaches of contract and said Sverdlov had breached confidentiality and non-circumvention clauses. The second count, valued at $ 160 million, was based on a provision that Sverdlov could not complete a transaction with the rating agency within 18 months of the termination of the contract.
Hanzman concluded that there was no breach as the agreement was terminated on June 13, 2016 and expired on December 13, 2017. Sverdlov took steps towards a contract with the rating agency but did not close a transaction until after the 18 month window was closed.
“It is also undisputed that the defendants have not“ concluded ”or“ concluded ”any transactions with the rating agency before this point in time. While the defendants apparently took steps to complete a transaction, nothing in the contract prohibited such preparatory steps / actions, ”Hanzman wrote. "Nothing prevented plaintiffs from insisting on any provision that would have limited the defendants' ability to take steps to promote a transaction during this lock-up period."
Sverdlov attorney Alan Kluger, who works with Steve Silverman on the case, declined to comment. Kluger and Silverman are shareholders of Kluger Kaplan in Miami.
Peebles-Channer's attorney, Glen Waldman, was not disappointed with the order, saying the remaining cases will be brought to justice, including a $ 15 million breach of contract, fraud, illicit interference and conspiracy.
"This is one of several points in the infringement lawsuit and we remain very confident that the end result will be achieved for us," said Waldman, partner at Waldman Barnett in Miami.
Waldman, who said he was hoping for a trial in mid-2021, dismissed previous allegations by Kluger that the complaint seeks to stop Sverdlov's project. Development is good news, and without CRA delays and backroom deals, Peebles and Channer would have built.
“We never intended to stop the project. We want the project to move forward, ”said Waldman. "The Overtown people have waited far too long for this."
When the complaint was filed, Kluger said Sverdlov's lender had left. Fresh fThe funding came recently when Sverdlov, SJM and Duffie received a $ 25 million acquisition and pre-development loan from Sawyers Lender LLC.
An amended complaint stated that Peebles-Channer subsidiary Overtown Gateway Partners LLC won the 2013 CRA application for Block 55 and Block 45 at 152 NW Eighth St., but the CRA delayed agreements and votes. The CRA urged Overtown Gateway to abandon Block 45 while in the background talking to Sverdlov about the development of Block 55, although he did not respond to the request.
"It was a consideration: if OGP returned Block 45 to the CRA well, OGP could keep Block 55, but only if it made a deal with Sverdlov," the complaint said. Sverdlov terminated the agreement with OGP subsidiaries and the CRA terminated the development rights for Block 55.
Sverdlov said in a counterclaim that he won the subsequent CRA Block 55 call fairly and did not violate the agreement.
Summing up the OGP's court files, Hanzman said Peebles did not trust Sverdlov and negotiated the deal intensely. If Peebles had been this suspicious, he could have negotiated a clause stating that 18 months after the contract ended, Sverdlov could not, but did not, take any steps towards a contract with the CRA. The deal only stipulated that no deal should be made, and no one did.
Hanzman issued an order on June 17 denying Sverdlov summary judgment on the other breach and denying Peebles and Channer's motion to dismiss the counterclaim.
Peebles became famous as a developer in the District of Columbia. In South Florida, he built the Royal Palm Crowne Plaza Resort, the first large Miami Beach hotel designed and owned by an African American. Also in Miami Beach, he developed the office building The Lincoln and the luxury condominiums The Residences at The Bath Club.
Sawyer's Landing is said to provide an economic boost to the historic Black Overtown neighborhood.
"These needed housing units, along with retail options that serve the area, will have a direct, positive impact on our community in the form of new jobs and new tax revenues," Sverdlov said in a press release.