The condo association
for a Miami River project is suing a group of developers and
subcontractors, alleging $10 million in design and
Terrazas Riverpark Village Condominium Association filed suit last month in Miami-Dade Circuit Court against more than 80 parties. The association alleges that unit owners only discovered the defects in the 328-unit project, at 1861 Northwest South River Drive, after buying their condos.
The report notes the
“generally poor conditions” of the roofing system, water
leaks in some of the units, cooling towers “in a state of
abandonment and [that] require significant repairs and
maintenance” and a smell of gas and fuel in the boiler room
that “may present a life safety issue since such gas may be
Terrazas has a complicated history. Miami-based B Developments, one of the defendants named in the lawsuit, built the towers with financing from Argentine investors, according to the South Florida Business Journal. Principal Miguel Angel Barbagallo wanted to target the middle-class market, and built the towers on the site of a former mental institution.
In 2006, New York-based lender iStar Financial, also named as a defendant in the lawsuit, lent $84.5 million to build the towers, but subsequently received a deed in lieu of foreclosure when no condos sold, the Journal reported.
In 2010, Area Property Partners and Wood Partners bought Terrazas in an off-market deal, intending to lease the “distressed property” as rentals, according to a press release. In 2013, Ares Management bought Area Property Partners, according to a press release from that time.
In 2013, Ladder Capital bought Terrazas, according to the website of SRF Ventures, which assisted Ladder in underwriting and due diligence. The price was reported as more than $75 million. Both companies are defendants in the suit.
In 2014, the executives at Terrazas Miami, as the building is also called, marketed the units as condos once again, targeting middle-income buyers with prices between $224,000 and $500,000.
An online listing for Terrazas lists condos between one and three bedrooms for rent from $1,495 to $2,485. The website for the property lists one- to two-bedroom units for purchase, priced between $325,500 and $412,800.
The Miami River towers aren’t the only project entangled in legal woes tied to alleged construction defects. Unit owners at the ultra-luxury condo development Glass in South Beach filed suit in June, alleging the development group failed to build the 10-unit, 18-story condo development in accordance with building codes, manufacturers recommendations and permitted plans. Meanwhile, the condo association for Aria on the Bay filed suit in August, alleging a litany of construction defects at the 53-story luxury tower near Edgewater.