Big Overtown project moves ahead as judge dismisses part of a lawsuit that froze it
A Miami-Dade circuit judge has dismissed a principal piece of a lawsuit that briefly froze a major redevelopment project aiming to bring a Target, other big retail stores and new housing to impoverished Overtown.
Following the partial dismissal, developer Michael Swerdlow and partner Alben Duffie announced they have closed on the purchase of the property for the project from the city of Miami’s Southeast Overtown/Park West Community Redvelopment Agency. Earlier, Swerdlow had said in court filings that the $160 million lawsuit by rival developer R. Donahue Peebles had caused his principal project financier to walk away from the deal.
On Monday, Swerdlow and Duffie said they have secured $25 million in financing for the purchase and pre-development planning, and hope to start construction in early 2021. The partners also said the housing component, originally planned as a mix of market-rate and affordable housing, will now be composed exclusively of affordable housing. Of those 578 affordable units, 85 percent will be earmarked for people 62 and over. Full financing for the $350 million project is pending, a spokesman for Swerdlow said.
“These needed housing units, along with retail options that will serve the surrounding area, will deliver a direct, positive impact to our community in the form of new jobs, new tax revenue, and an affordable place to call home for hundreds of Miami seniors,” Swerdlow said in a statement.
Peebles and Swerdlow originally had a contract to jointly develop the publicly owned property, a long-vacant city block sitting across the street from Miami police headquarters and abutting Interstate 95. In his March 26 lawsuit, Peebles made a series of incendiary claims with little proof, contending that city and CRA officials first forced him to take Swerdlow as a partner, then “conspired” to force him out of the project.
After the partnership fell apart, Swerdlow and Duffie won the right from the CRA to purchase and develop the property on their own.
In his complaint, Peebles alleged that Swerdlow and Duffie breached their contract by secretly negotiating with the CRA to oust him while they were still ostensibly partners.
The Sept. 2 decision by Miami-Dade Circuit Judge Michael Hanzman did not get into the meat of the allegations. But it dismissed one of two breach-of-contract claims, concluding nothing in it barred Swerdlow from trying to negotiate a different deal with city or CRA officials. Hanzman noted a simple clause in the contract written by any competent lawyer could have accomplished that.
“The issue presented here is not particularly difficult to adjudicate,” the judge wrote.
The judge left standing a second claim that alleges Swerdlow breached confidentiality provisions in the contract in communicating with city officials.
Glen Waldman, an attorney handling the suit for Peebles, said he and his client believe the confidentiality claim is “viable and strong.”
“We are pleased that the property has closed and from the outset we have had no intention to in any fashion interfere with the proceeding forward with this project, which has been delayed far too long to the detriment of the residents who deserve the completion of this project,” Waldman said in an emailed response to a request for comment. “Had my clients not been removed from the deal, we strongly believe the residents would already have a completed project which would positively impact the quality of their life.“
The city and the developers have touted the Swerdlow project as a major step in the revitalization of historically Black Overtown, which has been losing population for decades. It’s also raised fears of accelerating gentrification in the neighborhood.
The agreement with the CRA also obligates the Swerdlow venture to spend $1 million to restore the deteriorated Sawyer’s Walk public pedestrian promenade, named after a pioneering Overtown doctor, that runs along Northwest Seventh Street adjacent to the planned project.
This story was originally published September 14, 2020 at 3:14 PM.