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A commercial real estate firm is suing a Delray Beach, Fla., real estate investor and developer claiming it’s owed about $765,000 for helping him put together a hotel deal. Boca Raton, Fla.’s PMK International claims Harold Van Arnem and his affiliated companies used its brokerage services for several months during negotiations to buy the Holiday Inn & Suites in Boca Raton, according to a Palm Beach, Fla., Circuit Court lawsuit. But when the deal closed, the lawsuit claims Van Arnem refused to pay a 4 percent commission. A phone message for Van Arnem was returned by attorney Drew Levitt, a Boca Raton solo practitioner, who said his client does not owe a commission because he did not buy the hotel, which sold for $19.1 million in December. “My client was not the purchaser of the property,” Levitt said. “And even if my client was the purchaser, they still wouldn’t be entitled to a commission because my client didn’t agree to the commission agreement referenced in the complaint.” County records indicate HEI Hospitality sold the hotel at 1950 Glades Road to Boca Hotel GP LLC, a company managed by Mitchell B. Robbins, who is believed to be Van Arnem’s partner in the deal, according to PMK attorney Patricia Leonard. While working with PMK, Van Arnem brought Robbins into the talks and referred to Robbins as a partner, said Leonard of Beasley Hauser Kramer Leonard & Galardi in West Palm Beach. Robbins is a principal of Sawyer Realty, a Needham, Mass.-based real estate investment firm, Leonard said. The Florida Division of Corporations lists Robbins as secretary and treasurer of Sawyer Realty. “They formed [Boca Hotel GP] trying to make it look like this is not this group that is buying the hotel,” Leonard said. “The only reason to do that would be to not pay the commission.” Boca Hotel GP was incorporated in Delaware last Oct. 9 and was registered to do business in Florida on Dec. 14, four days before the hotel deal closed, according to Florida records. “Mr. Robbins was considering joining” Van Arnem in the purchase, “but that did not work out,” so Robbins pursued the deal by himself, Levitt said. Van Arnem owns the real estate companies Van Arnem Properties and HVA Corp., which are all listed as defendants in the lawsuit. Van Arnem also is a member of Delray Beach’s board of education, a city advisory board. Levitt is not representing Robbins or Sawyer Realty, which also are named as defendants in the lawsuit. Messages left for Robbins at Sawyer Realty were not returned. Sawyer Realty’s chief executive officer, David Rosenberg, who is not named in the lawsuit, also did not return a message. Levitt said he does not know if Van Arnem ever referred to Robbins as “partner.” “He has no relation to Sawyer or Boca Hotel management,” Levitt said. “He is an acquaintance of Mr. Robbins, who ultimately pursued [the deal]. Robbins was aware of the hotel sale way before my client was aware of it.” PMK, which is owned by Peter M. Kaplan, had been involved in the hotel deal for several months, Leonard said. In early 2007, PMK was representing a potential buyer for the hotel and Van Arnem was a client on an unrelated lease transaction, according to the complaint. The potential buyer, Tony’s Co., lost interest in the deal, and while working on the lease, Van Arnem asked Kaplan what other real estate projects he was working on around May 2007. Kaplan told him about the hotel, and Van Arnem said he was interested, Leonard said. Van Arnem and Kaplan had an oral agreement that if Van Arnem or any of his affiliates, clients or subsidiaries bought the property, PMK would be entitled to a 4 percent commission, according to the lawsuit. Based on the hotel’s sale price, the commission would be about $765,000. Several days later, PMK prepared a commission agreement May 17 and sent it to Van Arnem, who never signed it, according to Leonard. “Things got rushed, and they didn’t sign it,” she said. On the same day, Van Arnem sent PMK a draft letter of intent to buy the hotel for $24.5 million. PMK sent the letter to CB Richard Ellis, which represented seller HEI Hospitality, a large, privately held hotel investment company based in Norwalk, Conn. PMK later sent due diligence and confidential documents to Van Arnem along with a letter stating that if the deal closed, PMK would be entitled to a 4 percent commission, according to the complaint. Although Van Arnem did not sign the commission agreement, it used PMK’s services, the lawsuit claims. As negotiations continued for several more weeks, Van Arnem included Robbins in the talks. PMK continued to assist with negotiations among CBRE, HEI and Van Arnem, who started copying Robbins on the communications, according to the complaint. In August, Van Arnem told PMK that Sawyer Realty representatives would be meeting at the hotel for final review of the hotel and the contract prior to signing a purchase contract. Shortly after that, PMK learned a “new buyer” had visited the hotel. “All of a sudden they started excluding PMK from the discussion,” Leonard said. “Finally PMK learned the hotel was getting purchased and asked what was going on,” she said. Van Arnem confirmed his companies and his partner, Sawyer Realty and Robbins, would be buying the hotel. PMK sent Van Arnem and Robbins a letter demanding the commission. “They refused to pay,” Leonard said. This article originally appeared in the Daily Business Review, a publication of ALM. •

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