4141 N. Miami Ave., Miami (google)
When Miami investor Remy Jacobson purchased a 1961-built church in one of Miami’s trendiest neighborhoods, he knew it was a good deal for several reasons: The Design District building was minutes from new high-end shops and restaurants, and was ripe for redevelopment. He thought it was well worth the $10.5 million price tag.
“It was such a smooth deal—no hiccups,” Boca Raton lawyer Joshua Krut said shortly after the deal closed in April. Krut, a partner at Kopelowitz Ostrow Ferguson Weiselberg Gilbert, helped the investor buy the building at 4141 N. Miami Ave.
What Jacobson allegedly didn’t know was the property was two weeks away from getting a historic designation, a factor that could derail his plans to modernize the property for retail.
Jacobson claims the sellers knew the city’s Historic and Environmental Preservation Board was investigating the building yet kept it secret, hoping to rid themselves of an asset soon to be slapped with a “Do Not Touch” sign.
When Miami designates a historic building or site, any physical change to its exterior must be approved in advance by the city. Major changes, such as new construction or demolition, require further approval from the historic board, which meets once a month.
“Now you’re putting your development plan in the hands of somebody else,” said Miami attorney Jeffrey Schneider, a founding partner at Levine Kellogg Lehman Schneider & Grossman, He represents the investor with co-counsel David Silver of the Silver Law Group in Coral Springs.
A five-count complaint was filed Aug. 25 in Miami-Dade Circuit Court against Miami-based One Fountainhead Center LLC, led by Roberto and Ana Bravo, and One Fountainhead’s agent and developer, Manny Varas, for allegedly misrepresenting crucial facts before the contract was signed Feb. 29. The sale closed April 20. One Fountainhead paid $500,000 for the church in 1999.
The midcentury Miami Modern building lies in the Buena Vista East Historic District, which was designated by the city in 1987.
“One of Miami’s most significant challenges in terms of safeguarding its historic resources is the unusually high number of noncontributing structures that exist within our historic districts,” a May analysis of the district states. “It leaves a large number of buildings vulnerable to demolition.”
The historic preservation office moved to convert about 100 Buena Vista buildings to “contributing” structures, meaning they contribute to the historic character of the district. Jacobson’s property fell into that pool.
“The building was found to be an excellent example of the Miami Modern style,” said Megan Schmitt, a preservation officer with the city’s Planning & Zoning Department.
Language in the sale contract stated there was “no litigation, action or proceeding (zoning, environmental or otherwise) or governmental investigation pending” on the property, according to the complaint.
Before that, however, Varas was working with the Bravos to redevelop the church, the complaint alleges. Varas, president and CEO of MV Group in Miami, is also working with the Bravos on a mixed-use development across the street.
“The process for historical designation takes several months, if not longer,” Silver said. “In this particular context, there were over 100 buildings being redesignated at the time. All owners were given notice to object.”
Because any notice that was physically placed on the property was missing, the only way Jacobson would’ve known about the designation is if the sellers told him, Schneider said.
“It’s inconceivable to think that they did not know about this, which makes the affirmative representation even more egregious,” he said.
Steven Gurian, an associate at Marin Eljaiek & Lopez in Miami who is representing Varas, declined to comment.
Jacobson is suing the seller and developer for breach of contract, fraudulent inducement, conspiracy to commit contract fraud and negligent misrepresentation. He also tacked on a rescission claim against One Fountainhead.
Jacobson is an active investor in that area of town. In March, he scored $22 million on a property he acquired for $3 million in 2014. The investor intended to convert the Design District property into a hip, modern retail venue. But the plaintiffs attorneys say the defendants ripped control out of their client’s hands by keeping the historic designation issue secret.
Jacobson is seeking damages related to how much longer and how much more it will cost to bring new life to his property.