Baptist Health Under Contract To Buy Coral Gables Dev Site

Baptist Health is under contract to pay $41.5 million for the development site of the Collection Residences in Coral Gables — a property at the center of contentious litigation between developers Masoud Shojaee and Ugo Colombo, court documents reveal.

The Baptist deal could close within two months.

Shojaee and Colombo had planned to jointly develop the Collection Residences, a mixed-use project with 128 condos and retail space at the 2.8-acre site at 250 Bird Road, 4101 Salzedo Street and 4112 Aurora Street before their partnership ended in dispute nearly three years ago.

Shojaee and Colombo, through their firms, jointly owned Coral Gables Luxury Holdings LLC, which planned to develop the project across the street from The Collection. Following a major falling out in November 2015, Shojaee and Colombo pulled out of their joint venture.

In January 2016, Shojaee’s Shoma Coral Gables filed suit against Colombo’s Gables Investment Holdings LLC; Colombo, individually; and The Collection LLC, Colombo’s Coral Gables luxury car dealership, alleging breach of contract, among other counts. Shojaee’s company alleged that Colombo and his companies breached their operating agreement. Earlier this month, the court dismissed Colombo as a defendant in the case.

The suit seeks between $4 million and $5 million in damages, said Shoma’s attorney Andrew Hall, founding partner of Hall, Lamb, Hall & Leto. A civil jury trial set to begin this week was delayed. Last week, Colombo’s firm filed a motion to dismiss the case, citing a contract with Baptist Health to purchase the development site.

“The company is essentially in liquidation mode with an executed contract of sale of its only asset — the property,” the motion states. “If following closing on the contract of sale to Baptist Hospital, [Shoma] receives back every dollar it invested, it will have no actual damage and its claims in this case will be entirely mooted.”

Hall said Shoma objects to dismissing the case. Robert Burlington, a partner in Coffee Burlington, who represents Colombo and his companies, declined to comment. Kathleen Moorman, vice president of Baptist Health Enterprises Real Estate and Development, did not immediately respond to a request for comment.

Baptist Health has been expanding throughout South Florida in recent years. It recently opened a four-story, 60,000-square-foot outpatient facility at Crescent Heights’ mixed-use development at 709 Alton Road in Miami Beach.

The 2016 suit tied to the Coral Gables site alleged that after Shoma refused to give in to Colombo’s demands, Colombo sabotaged the project, “causing substantial damages to Shoma.” Colombo responded to the lawsuit at the time, calling it “a frivolous lawsuit filed by a peculiar fellow.”

“There’s no question that there is an awful lot of money lost to engage in the development that shouldn’t have been lost,” Hall said, citing expenses including architectural engineering plans, sales office construction and operations. “Those millions of dollars were wasted and its seems to me that [Colombo’s CMC Group] needs to basically write the check because they did something they had no right to do, and make us whole.”

Colombo and Shojaee paid $27 million for the property in 2013, plus a $1 million bonus upon execution of a sale or lease of underground parking spaces to the Collection, and 10 percent of the gross rental income from any lease or the sales price for the purchase of any underground parking, according to the suit.

If the lawsuit goes to trial, Colombo’s firm’s motion to dismiss states that if Shoma proves a breach of contract and a jury awards its claimed out-of-pocket damage, Shoma cannot also receive anything from the closing on the sale of the property because it cannot have a double recovery.

But Hall said that even if the Baptist deal goes forward, the $4 million to $5 million is still lost. “It’s money we didn’t need to spend,” he said, ”and we are going to make them pay us back for that.”

Source: The Real Deal