Owner Keeps Historic Brickell House Turned Office After Fighting Buyback
Miami-Dade Circuit Judge Abby Cynamon sides with the current owner of a historic mansion and rejects a buyback attempt.
May 14, 2019 at 04:50 PM
5 minute read
The owner of a historic house repurposed as offices in Miami's Brickell district will keep the property after fighting off a buyback pursued by the previous owner.
The current and the former owners fought in court for four years over the 9,172-square-foot, two-story house at 1548 Brickell Ave. Its Neo-Classical architecture and a portico supported by four colossal Corinthian columns make it more reminiscent of a Southern mansion than part of the busy Financial District.
Banker George Nolan built the home in 1925, fulfilling his wife's wish for ”a big Southern colonial home.” The couple hosted gatherings on what then was known as Millionaire's Row, according to the Miami historic preservation program website. Nolan's family lived there until the 1990s.
Lupetto Inc. sold the house for $5.1 million in 2008 to South Bay Developers Group LLC, led by Ernesto Weisson, through 1548 Brickell Ave LLC.
The two at the time agreed to a give-and-take in which Lupetto reduced the original $6.2 million sale price by $1.1 million in exchange for being given the option to buy back the property by a deadline for $5.1 million.
The price could be reduced by subtracting debts and liabilities on the property, and it was this price reduction that played at least a small part in Lupetto's lawsuit.
Miami-Dade Circuit Judge Abby Cynamon on Friday sided with South Bay owner 1548 Brickell, saying Lupetto missed the 2015 buyback deadline.
Lupetto wrote South Bay in 2014, saying it planned to exercise the repurchase option, but it didn't follow up as required with a purchase agreement within 30 days, Cynamon concluded. Under the agreement, Lupetto was to put $100,000 in escrow, but that didn't happen either.
Lupetto attorney Jon Polenberg said the company is evaluating its options following Cynamon's order.
“We respect Judge Cynamon and the work she did. We respect our opposing counsel and the work they did on the case. We disagree with the result, and the plaintiff is considering what options to do from here,” the Becker shareholder said.
The legal dispute focused on the order and buyback deadlines.
Lupetto sued in 2015 and amended the complaint most recently in 2017, arguing South Bay and 1548 Brickell didn't provide the financial documents needed by Lupetto to move forward with the buyback. Lupetto said it needed documents showing debts and liabilities to arrive at a final price.
In a three-day bench trial ending Jan. 25, Lupetto argued South Bay and 1548 had refused to adjust the $5.1 million price by taking account of the debts and liabilities on the property.
In a post-trial memo filed on Feb. 5, Lupetto noted experts on opposing sides calculated different buyback prices. If Lupetto were to close on the buyback by the end of 2018, the purchase price would have been reduced to just over $3.3 million, Polenberg wrote.
But Glen Waldman, the attorney for South Bay and 1548, said Lupetto was putting “the cart before the horse.” It was supposed to turn over a purchase agreement and meet other obligations before getting the financial documents.
“The agreement said that they don't get the due diligence materials until five days after the purchase agreement is signed,” said Waldman, co-managing partner at Waldman Barnett in Miami.
Cynamon agreed, saying Lupetto had 30 days to turn in an agreement and put $100,000 in an escrow. The financial records were to be provided to Lupetto five days after the repurchase agreement was signed, Cynamon's order said.
There was no requirement to settle on a buyback price before signing the repurchase agreement, Cynamon said. Lupetto also could opt out of the buyback and get its escrow money back.
South Bay and 1548 responded on the 2015 buyback deadline.
“We turned around and countersued them and said, 'You are out of luck, guys. You waited too long. You haven't done all the things you were supposed to do under the agreement and your rights have ended,' ” Waldman said.
The dispute illustrates how valuable Miami property can become contentious in a booming real estate market.
South Bay invested about $2 million in improvements as it converted the house into offices, Waldman said.
“ This property is now worth double, close to double, what the repurchase amount was,” he said. “The spread is probably $4 million between what they were going to repurchase it for and what it would probably command on the open market today, so we are talking about a lot of money.”
Office space provider The Hive at Brickell, which lists the building, offers private and semi-private offices, lounges, event space and meeting areas.
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