Developer Rishi
Kapoor’s first luxury condominium high-rise project near
downtown Coral Gables looked like a picture of success from
the outside.
Wealthy buyers flocked to the 39-unit, 13-story building —
with a resort-style pool, saunas, weight rooms and other
fitness amenities — which appeared to be completed last
year.
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An architectural rendering of the Villa Valencia ultra-luxury condo tower on the edge of downtown Coral Gables. |
Mironest claims the unit was supposed to
be completed by October 2022, as promised in Flores’
purchase contract.
Mironest also alleges the seller is in “default” on the
contract, noting that the penthouse is uninhabitable: A
photo included in the suit shows that the unit is a “blank,
concrete shell” with “minimal framing.”
Legally speaking, Flores’ attorneys say, even if Flores and
his family wanted to move into penthouse unit 1202, the city
of Coral Gables would be unable to issue a certificate of
occupancy.
Nearly two years since Flores signed the purchase contract,
“the apartment is nowhere close to finished,” says the suit,
filed earlier this month in Miami-Dade Circuit Court.
“Construction was stymied to a halt by what [the buyer] now
knows to be a massive fraud perpetuated by Mr. Kapoor, 515
Valencia SPE, Location Ventures” and others, including the
project’s general contractor, investors and lenders, the
lawsuit alleges.
Reached by email Friday, Kapoor rejected the allegations in
the lawsuit, saying it is an attempt by buyers Daniel and
Rebecca Flores to “throw anything at the wall” to prevent
the loss of their penthouse purchase.
Kapoor said the couple took over a year to finalize custom
plans for their unit, countering that “these threshold
issues and delays fundamentally contributed to the Villa
Valencia team ... being unable to [make] progress [on]
permitting and the buildout, unlike the successful
completion of 36 other units in the building.
“Unfortunately, those delays ran them into the current
issues,” he added. “I have no personal involvement in the
matter, and I wish the remaining parties could work together
for an amicable resolution with a buyer apparently willing
to close.”
Since Kapoor’s departure as Location Ventures’ CEO, his
development company has been temporarily taken over by a
former Miami-Dade Circuit Court judge, Alan Fine, who was
hired by the firm’s board of directors to liquidate assets
and pay off creditors.
In an interview this week, Fine told the Miami Herald that
that there has been a breach of the buyer’s contract to
acquire the penthouse unit and that he’s willing to turn
over a quit claim deed to Flores transferring ownership to
him based on what he has paid so far. Under those terms,
however, Flores would have to complete the interior work on
the penthouse unit at his own expense, he said.
Fine described Flores’ lawsuit as “an opening salvo to get
those liens cleared,” but he added: “We can’t clear those
liens for him.”
Jennifer Recine, a lawyer with the New York law firm
Kasowitz Benson Torres, which is representing Flores’
company in the suit, said that Fine’s offer on the quit
claim deed is hollow because the liens on the condo property
as a whole still pose significant barriers to the buyer
taking ownership of the penthouse unit.
Recine said that her client rejected Fine’s offer because it
doesn’t go nearly far enough to resolve all the legal
problems preventing him from attaining ownership of the
penthouse and moving into it.
“Location Ventures and 515 Valencia SPE, LLC should be
seeking to invalidate liens and claw back monies paid
improperly to contractors, other insiders, and even
shareholders,” Recine said in a statement provided to the
Miami Herald on Friday. “If they did so, they could deliver
clean title to Mironest CG, in which case Mironest CG
remains fully prepared to step in and fit out the concrete
box that is Unit 1202 of Villa Valencia, so its owners can
finally move into their home.” But Recine said that Location
Ventures and 515 Valencia SPE “refuse to do so, claiming to
now be insolvent despite collecting over $104 million in
sales and deposits” from Villa Valencia buyers.
In total, property records show that almost all of the 39
units at Villa Valencia have been sold for $1.5 million to
$6 million over the past three years, with closings
completed and buyers moving into their units. The exceptions
are the two penthouses on the 12th floor, and the single
penthouse on the 13th floor. While Flores is trying to
acquire his penthouse through a court action, the other two
penthouses remain unsold. All three have unfinished
interiors.
To complete the interiors of those penthouse units, which
promised to deliver substantial profits on the Villa
Valencia project, Location Ventures and its development
entity, 515 Valencia SPE, borrowed about $2.7 million from a
Coral Gables private lender, Robert Gutlohn. They also still
owed Gutlohn another $1 million on a prior loan for Villa
Valencia.
In recent months, Gutlohn’s lending companies have sued
Location Ventures or Kapoor over a series of loans for a
handful of luxury condo projects in Miami-Dade County,
including Villa Valencia. According to one lawsuit, Gutlohn
is seeking to foreclose on the three unsold penthouse units
at Villa Valencia to recover the debt on his loans.
Gutlohn also sued Kapoor in a foreclosure action on his $6
million waterfront home in the Cocoplum area of Coral Gables
because, Gutlohn says, he has failed to keep up on his
mortgage payments.
In the latest suit, Flores’ company, Mironest, accused
Kapoor of misappropriating Gutlohn’s loan to complete the
interiors of the penthouse units at Villa Valencia. “Instead
of using the Gutlohn financing to complete construction of
the remaining floors, including [Flores’ unit 1202]
defendant Kapoor stole the monies to repay [Location
Ventures] stakeholders.”
In addition to Flores’ claim, another Villa Valencia condo
buyer, Juan Gronlier, has sued 515 Valencia SPE and Kapoor,
accusing the developer of selling his nearly $2 million
condo unit on which he had made a down payment of $792,000
to another buyer and then withholding his deposit.