The Brickell Arch condominium association claims Conrad Miami hotel owner Mast Capital Inc. tried to overcharge for shared-use facilities, such as elevators and the pool deck, and corridors maintenance, according to a lawsuit.
A joint venture between Mast Capital and New York-based investment adviser Angelo, Gordon & Co. paid $72 million for the Conrad in the Brickell Arch building in July 2017. The building is a 36-story development with luxury residential condos, the 203-room Conrad and offices.
But the Mayfield Condominium Association Inc. sued Mast Capital, a Miami-based real estate investor and developer, alleging its proposed 2018 budget of $733,109 for shared facilities and hallways jumped 151 percent in a year, according to the Miami-Dade Circuit Court complaint filed May 24.
The association claims it asked to review the books but the request was denied. Even without those details, the association spotted several items in the proposed budget it was given that were charged either mistakenly or in bad faith, according to the complaint.
Mast Capital said through a spokeswoman that it’s not the right party to blame in the lawsuit and it was erroneously named as a defendant.
“The plaintiff will be amending the complaint to reflect that Mast Capital is not the proper defendant to this action,” Laura Guitar of rbb Communications said in an email. In a follow-up email, she said tying allegations in the complaint to Mast Capital would be inaccurate in part because “the complaint was incorrectly filed.”
Miami attorney Jason Alderman, who represents the association, said he plans to amend the complaint following a request by Mast Capital attorneys, but he’s still evaluating whether to drop Mast Capital as a defendant.
“Mast Capital is the beneficial owner of the property. They’ve requested to substitute the titular owner of the hotel lot in their place, which is AG-M Miami Hotel Owner LLC,” Alderman said by email. “We are evaluating their request at this time.”
AG-M Miami Hotel Owner lists Angelo Gordon’s New York office address in state records, and a document filed with the state Division of Corporations was signed by Jennifer Niebla, Mast Capital’s director of accounting and finance.
Angelo Gordon declined to comment for this article.
The breach-of-contract complaint seeks injunctive relief and a jury trial.
The association said a 2003 master agreement signed when Brickell Arch was built at 1395 Brickell Ave. makes the hotel owner responsible for maintaining all the corridors in the building, but in turn the association pays for all of these maintenance costs. Also, the hotel owner is required to allow condo owners to use shared hotel facilities with the association paying 10 percent of the costs, according to the complaint.
Hotel shared-use facilities include the heating, ventilation and air conditioning system, elevators, the pool and pool deck, according to the master agreement.
A 2010 settlement agreement between the association and Holborn LC, which sold the hotel to Mast Capital and Angelo Gordon, capped certain increases in the shared-use facilities and corridor costs, according to the complaint.
Some of the disputed charges in the budget are $102,747 for taxes on the commercial unit corridors, a space the association says isn’t taxed; a $35,000 charge for an audit and tax preparation that costs $46,000, the full cost of a security guard, $34,597 for accounting and $19,158 for administrative costs, even though the association insists its share is limited to 10 percent.
The association rejected the 2018 budget, which means the 2017 budget totaling $291,150 is still in effect this year, according to the complaint.
When Mast Capital and Angelo Gordon bought the Conrad Miami last year, extensive updates to the Hilton brand hotel rooms and public spaces were planned, the Daily Business Review reported.
“This property was extremely compelling because of its prominent location on Brickell Avenue and world-class architectural design,” Mast Capital CEO Camilo Miguel Jr. said in the July 14, 2017, article. “It is exciting to have the opportunity to fully realize the potential of the property. We are confident that the Conrad brand’s concept of smart luxury will be favored by guests and residents for years to come.”