DEVELOPMENT

BrickellHouse foreclosure suit dismissed

 

Miami condominium developer Harvey Hernandez cleared a cloud from his BrickellHouse project this week by paying in full a lienholder who had filed a foreclosure suit in October on a $15.8 million loan due in the summer of 2016.

The lienholder, JBG Development LLC, which is controlled by Jose Baboun, voluntarily dismissed a foreclosure action it had filed Oct. 4 in Miami-Dade Circuit Court upon receiving $17 million plus attorneys’ fees, according to JBG’s lawyer, Carlos A. Marin.

“We obtained a loan from an institution” and paid off the lienholder, said Hernandez, chairman and managing director of Newgard Development Group. “What we want to transmit to our buyers and our brokers and the business community is we see it as business as usual. Due to our financial success and our strength and our commitment to the project, we in essence paid a loan three years ahead of schedule just, because we don’t like confusion.”

According to Hernandez, the 374-unit project is “99 percent sold” and construction has reached the 40th floor of the 46-story tower. Hernandez said the building is set to top-off next month — several months ahead of schedule — and is expected to be completed in the summer of 2014.

“They paid us off in full,” Marin said.

The suit, filed against Hernandez, his business partner Jesus Quintero, and BrickellHouse Holding LLC, the company formed to develop the project, pertained to a $15.8 million loan that wasn’t due for three years.

The dispute between Hernandez’s Newgard Development Group and JBG Development, which sold the land at 1300 Brickell Bay Drive to BrickellHouse Holding LLC in August 2012, erupted as Newgard sought to subordinate that lien in order to obtain a construction loan.

In its suit, JBG acknowledged that the loan agreement specified it had to subordinate its lien under certain circumstances, but it argued that Newgard hadn’t met those conditions and was in violation of non-monetary terms of the loan. JBG said BrickellHouse pressured Baboun to accept a subordination that was disadvantageous and in violation of the loan agreement.

The suit also sought an accounting of the books and records at BrickellHouse “to determine if net sales proceeds have been properly allocated, whether BrickellHouse has paid money to parties in contravention of the note.”

The Baboun family was involved with the Brickell Bay Drive site for years. Kenneth Baboun, Jose’s son, worked with Hernandez on the BrickellHouse project during its early phases but left last year.

During the last building boom, the Babouns tried to develop the site themselves. However, in February 2006, Kenneth Baboun, president of BBB Group, announced he was abandoning the project and returned all the deposits to the unit buyers.

The foreclosure action was the first to be filed during the current condominium cycle but caused few ripples.

Alicia Cervera Lamadrid, managing director of Cervera Real Estate, which is in charge of marketing the BrickellHouse project, said the litigation proved to be a non-event among unit buyers. “It was not an issue,” Cervera Lamadrid said. “Nobody held up a payment. Nobody tried to cancel.”

Read more Breaking News - Business stories from the Miami Herald

  • New York to push Congress on response to oil train fires

    New York state fire officials are pressing Congress for $100 million in emergency funding to pay for a nationwide training program for firefighters to address the new scale of risk presented by trains carrying millions of gallons of flammable crude oil.

  •  
ADVANCE FOR MONDAY, JULY 28, 2014, AT 12:01 A.M. AND THEREAFTER - The Trianel power plant is pictured in Luenen, Germany, Thursday, July 24, 2014. The 750-megawatt Trianel power plant relies completely on coal imports, about half from the U.S. Soon, all of Germany’s coal-fired power plants will be dependent on imports, with the country scheduled to halt all coal mining in 2018 when government subsidies end. Coal mining’s demise in Germany comes as the country is experiencing a resurgence in coal-fired power, one which the U.S. increasingly has helped supply.

    US exports help Germany increase coal, pollution

    One of Germany's newest coal-fired power plants rises here from the banks of a 100-year-old canal that once shipped coal mined from the Ruhr Valley to the world.

  • Report for Detroit creditor boosts value of art

    One of the companies challenging Detroit's bankruptcy plan says the possible value of the Detroit Institute of Arts' collection is $8.5 billion — a figure that's higher than previous estimates.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category