In the final days of the Surf Club, one of Miami’s most elite social clubs, the atmosphere has turned decidedly unsocial.
Members have turned against members.
There are lawsuits and countersuits.
After all the soirées, the charity balls, the extravagant shows, the lounging by oceanfront cabanas, after more than eight decades of seeing and being seen in this bastion of the leisure class, it’s all come down to a grab for the money.
Things turned sour last year after the 1930-vintage club, owned by its members, agreed to a $116 million acquisition by a deep-pocketed developer.
One group of members claims the other side cut them out of their share of the money.
Recently, the Florida attorney general intervened, asserting that if some members or their heirs can’t be found, the state is entitled to those proceeds.
The battle royal has managed to ensnare an Austrian-born baron, a philanthropist, several horse breeders, a luxury-retail magnate and the wife of Dolphins coaching legend Don Shula.
“It looks like it’s turned into a real bag of worms,” said Addison H. King, of Indianapolis, whose wife, Sue Krafft King, was a club member on inactive status. She is among those who recently reached individual confidential settlements.
In another squabble, the club sued Miami attorney Stanley B. Price, whom it hired to help obtain historic designation and tax breaks. The club alleges the historic status cut $30 million to $50 million from its market value, limiting development on the site, an 8.7-acre jewel at 9011 Collins Avenue, which boasts 815 feet of oceanfront in Surfside.
Spearheading the takeover was Nadim Achi, founder and managing partner of the Miami real-estate investment firm of Fort Capital Management.
Achi put together a group composed of the Koç Group, a Turkish conglomerate; the Cabot family of Boston; and several Brazilian and Peruvian families. They outflanked a number of other suitors.
Plans call for erecting a glass-clad, luxury condominium and a five-star hotel around the historic structures, which are to be meticulously restored.
New York “starchitect” Richard Meier has been brought in to design the project.
The deal (approved by 92 percent of active members) was made necessary by dwindling membership and soaring maintenance bills at the 80-year-old facility.
The active members got $727,000 each for their stakes.
But another group of equity members was allowed over the years to go on “inactive’’ status. Most are heirs of members who quit paying dues and gave up the right vote or use the facility while retaining the right to a share of proceeds if the club were dissolved.
There’s the rub: The club asserts the “reverse merger” didn’t dissolve the club; rather, the acquirer ended up as its sole member.
The club filed suit last year, seeking a ruling on its stance that inactive members aren’t entitled to a payout because the club wasn’t “dissolved.”
The club has set aside $17.5 million in escrow, awaiting the court’s decision.
“All the inactive members interests are fully protected,” said Robert Zarco, the club’s attorney. “It has all been done in accordance with the law.”
Things started heating up after Zarco was hired as general counsel in 2011. He was introduced to members by Mary Anne Shula, its executive vice president, who knew him from his restaurant franchise work for her husband, Don, the retired Dolphins coach. Zarco received his membership as part of his legal fees, and he led negotiations for the merger.