Privé developers win $26M jury verdict against Williams Island homeowners
Prive at Island Estates and BH3’s Charlie Phelan, Greg Freedman and Daniel Lebensohn and Gary Cohen
Score a court victory for the developers of Privé at Island Estates in Aventura. Builders Gary Cohen and BH3 are walking away with a $26 million jury verdict against the Williams Island Property Owners’ Association, which had sought to stop the luxury two-tower development since 2013.
On Tuesday, after a seven-day trial, a jury in Miami-Dade Circuit Court ruled that the association breached a 1982 agreement requiring it not to object or oppose future developments by Cohen on the 84-acre Williams Island. Jurors awarded Cohen and BH3 $26 million in damages according to the verdict form, and there is an additional $8 million in interest the association will also have to pay, said Glen Waldman, the developers’ attorney.
“My clients have been wrongfully attacked from all sides for so long,” Waldman said. “They feel very good that a jury listened to the evidence, got it right and ordered substantial damages against the people who caused harm to the project.”
Jeffrey T. Foreman, lead lawyer for Williams Island Property Owners’ Association, declined comment. Waldman said he expects the association to appeal.
The developers’ win comes seven months after Miami-Dade Circuit Judge William Thomas, who presided over the case, dealt a signficant blow to the association’s complaint and a separate lawsuit filed by the Island Estates Homeowners Association, which represents another group of homeowners. Thomas ruled the statute of limitations had long expired for both associations to challenge a vested rights determination agreement.
Williams Island Property Owners’ Association originally sued the City of Aventura, Cohen and Prive Developers LLC, a partnership between BH3 and Cohen in April 2013. The Island Estates group sued in October 2013 and filed a separate complaint a year later accusing the city of allowing BH3 to build an illegal sidewalk that encroached on homeowners’ properties. A judge ruled in favor of Island Estates in October.
Waldman said Cohen and Williams Island Property Owners’ Association are bound by a 1982 settlement agreement between the original developers of the 84-acre luxury enclave in which neither parties would interfere with new projects. “Neither guy would mess with one another’s development plans they had on the islands,” Waldman said. “They also would not encourage or participate with others to object. It is that simple.”
Williams Island Property Association violated the agreement by filing its lawsuit and encouraging Island Estates Homeowners Association to also sue Privé’s developers, Waldman said. “These three lawsuits really hurt us,” he said. “Instead of being able to obtain a conventional loan at a 5.5 percent interest rate for a project that was awesome in terms of loan to value and contracts already in place, we could only get vulture funding at a 15 to 18 percent interest rate.”
As a result, the developers had to pay roughly $21 million in interest, Waldman added. Furthermore, the ongoing litigation put a cloud over the project that resulted in delays in selling out units. “Buyers were scared,” he said. “Brokers testified that they wouldn’t even go to the project. We should have sold out two years ago.”
The 150-unit project at 5000 Island Boulevard is 75 percent sold out and opened two weeks ago.
Condos range from 2,500 to 6,200 square feet and priced from $2.3 million to $8.6 million.
“We have our temporary certificate of occupancy and people are moving in,” Waldman said. “We are looking forward and not looking back.”
Source:: The Real Deal