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Articles Posted in Real Estate Development

nsiegfriedjmilesThe firm’s Joseph A. Miles and Nicholas D. Siegfried were featured in an article in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, about a major verdict that they recently secured for one of the firm’s clients.  The article, which is titled “South Florida Lawyers Win $4.1M for Cable Company Fired Over Service Delays,” focuses on their work in securing the verdict for an affiliate of Miami-based OpticalTel in a case involving the company’s wrongful termination by a Central Florida HOA.  The article reads:

Coral Gables lawyers Joseph A. Miles and Nicholas D. Siegfried landed a $4.1 million verdict for Miami-based company PC Services LLC, which claimed the Cascades of Groveland Homeowners’ Association Inc. in Lake County should never have terminated an agreement with the company because it wasn’t responsible for a flurry of delays and problems with services.

The 2012 lawsuit arose from years of bad blood between the parties over a deal that turned sour. On July 2007, the homeowner association terminated its contract with PC Services, claiming it had failed to properly do its job. But PC Services argued it had and lost the opportunity to make a profit on its $1.6 million investment.

The defense argued it was right to terminate the agreement because it didn’t get what PC Services promised.

dbrlogo-300x57Defense lawyers Aristides J. Diaz and Thomas R. Slaten Jr. of Larsen & Associates in Orlando did not respond to requests for comment before deadline.

Making the case was no small feat for the Siegfried Rivera lawyers, as it was laced with technical jargon that would likely stump the average juror.

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The use of the limited liability company (“LLC”) corporate structure has become very common in the real estate industry. It is the go to structure for the acquisition and development of properties by parties joining together behind a venture.  LLCs are governed by operating agreements among the members. These agreements are akin to the shareholder agreements among the shareholders of closely held corporations, and they govern many aspects of the operations of the venture.  One element in these operating agreements that bears close scrutiny by all of the members is the enforcement mechanisms that they put in place should any members fail to honor their obligations to fund future capital calls.

In truth, many LLC operating agreements contain inadequate payment enforcement provisions, making them potentially problematic and inequitable for the company itself and the members who honor their obligations and make future capital calls on a timely basis.  For example, if a member fails to meet their financial obligations, it is fairly common for these agreements to provide that the other members of the LLC may contribute the missing funds and treat them as a loan to the non-funding member.  Often times, the agreements provide that the loan will then be repaid to the funding members, with interest, once the LLC is in a position to make future distributions to its members, with no further enforcement methodology.

Such arrangements provide an unmerited level of flexibility to the non-funding member, as it enables them to weigh the pros and cons of making their required contributions or taking a loan from their partners to avoid any additional loss risk exposure in the endeavor.

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OscarRivera2014.jpgThe firm’s Oscar R. Rivera wrote an article that appeared today in the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which was titled “Best Practices for Buyouts of Unit Owners at Older Condos,” discusses recent changes in the Florida condominium termination law and important considerations for developers in these property acquisitions. Oscar’s article reads:

A recent ruling involving a lawsuit by Wells Fargo Bank against the former ownership group of the Palm Beach Mall is emblematic of the post-recession efforts of lenders to recover damages from their commercial real estate borrowers. The convoluted case included several counts alleging various types of damages against the former owners and operators of the mall, but the lender lost on all of its counts and motions in both the trial and appellate courts. While it ultimately may not have impacted the outcome, a couple of seemingly minor mistakes and omissions in the guaranty and loan agreements created significant difficulties for the lender that it was unable to overcome in court.

A report earlier this week in the Tampa Bay Times about the brisk pace of sales at the new One St. Petersburg luxury condominium illustrated the changes that are taking place in the city’s downtown area. The article reported that buyers at the new development, which at 41 stories will be the tallest building in the city, have reserved 104 of the 253 units since they were introduced a few months ago, totaling more than $106 million in sales.

New condominium developments often face significant challenges from municipalities and neighboring property owners. As the wave of condo development in Florida appears to have no end in sight, developers should be cognizant of potential complaints that may be raised against their proposed towers, and they should be prepared to negotiate to win all of the necessary approvals and overcome the challenges that are presented.

The recent article from The Miami Herald that also appeared in other Florida newspapers about the plans for the new Brickell City Centre near downtown Miami focused on the developer’s innovative approach to creating an open-air shopping center that will keep visitors cool and comfortable during hot or rainy days. With the help of a Paris design firm and the universities of Carnegie-Mellon in Pittsburgh and Cardiff in the U.K., Swire Properties is creating an undulating canopy comprised of steel, glass and massive fabric-covered louvers that will cover the open concourses of shops, which will extend across four city blocks.

Oscar Rivera 2014.jpgThe firm’s Oscar Rivera contributed a guest column that appeared in today’s edition of the Daily Business Review about the instability in the real estate and insurance industries that will be caused by the failure of the U.S. Senate to reinstate the Terrorism Risk Insurance Act. Our firm congratulates Oscar for drawing attention to this vital legislation and calling on the Congress to make it a priority when it reconvenes in January.

Jeff Vinik, owner of the Tampa Bay Lightning, has plans to turn vacant land and other underused property across a portion of downtown Tampa into a thriving urban core. An entity controlled by Vinik has purchased various sites surrounding the Amalie Arena, home to the Lightning, with a goal of adding hotel, office, residential and retail space to the area as well as a new medical school for the University of South Florida. The project, which could exceed the billion-dollar mark, would progress over the next five to ten years.

Much has been made of the real estate and housing trend of “New Urbanism” and its calls for compact and walkable mixed-use neighborhoods with a range of housing types as well as retail and offices. The model has proven to be successful, especially for areas that are undergoing a gentrification process with a variety of new real estate development attracting new residents and businesses. Now, we are seeing a growing number of real estate developers catching on to the trend by launching small yet visionary projects in neighborhoods that are undergoing such a metamorphosis.