Intracoastal Mall, 3881 NE 163rd St. in North Miami Beach. Photo: Google

Dezer Development LLC has lost its push to evict a seafood restaurant from a North Miami Beach mall where the high-end condominium developer plans a new project.

The lawsuit against Sea Grill is one of several Dezer Development filed against some of the tenants at its Intracoastal Mall over allegedly unpaid rent and other expenses due under the leases.

Sea Grill attorney Gary Phillips argued Dezer's legal salvo is a way for the developer to clear out existing businesses to pursue its new project. Dezer's attorney denied any connection between rent issues and redevelopment.

Dezer Development has no issues with many mall tenants, general counsel David Reimer noted last year.

Regardless of the motivation for the lawsuits, the Sea Grill tenant gets to stay at its location and isn't on the hook for higher rent after the Third District Court of Appeal on Wednesday affirmed a trial court final judgment siding with the restaurant.

Miami-Dade Circuit Judge Jorge Cueto in December 2017 ruled in favor of Sea Grill, which Dezer Development sued in March 2016 for eviction and claiming breach of lease.

Sea Grill leased a 7,081-square-foot space at the Intracoastal Mall starting in January 2012 for a base rent of $19,481 a month plus taxes, utilities and operating expenses.

Sea Grill's contribution toward the operating expenses, or the restaurant's cost share for the building maintenance and repairs, is capped at a 3% increase annually, even if the operating cost is higher, according to court filings and a lease rider. The operating expenses often are referred to as common area maintenance, or CAM, charges.

Sea Grill's lease was signed with a previous mall owner, MSW Intracoastal Mall LLC, and transferred to subsequent owners CJUF III Intracoastal LLC and a Dezer Development affiliate.

Dezer Intracoastal Mall LLC bought the 26.2-acre property at 3881 NE 163rd St., north of the causeway connecting North Miami Beach and Sunny Isles Beach, in December 2013 for $63.5 million, according to Miami-Dade County property appraiser's records.

During the first year and a half of owning the mall, Dezer Development accepted the same rent paid to the previous owners, Cueto wrote in his final judgment.

In June 2015, Dezer demanded an additional $602,380, which included a retroactive $84,456 annual increase for operating expenses, late fees and interest. Dezer's calculation exceeded the 3% cap, and its ledgers were in agreement with Sea Grill's showing the restaurant paid all that was due under its lease, Cueto wrote. In fact, Cueto found a Sea Grill overpayment of $2,111.

“The law is not so powerless as to allow the landlord to run roughshod over the tenant's rights, ignore the clear and unambiguous terms of the lease and attempt to evict a tenant who overpaid its rent,” Cueto said.

Judge Eric Hendon wrote for the unanimous appellate panel, with Judges Kevin Emas and Thomas Logue concurring.

Dezer Development's attorneys, Rosenthal Law Group founder Alex Rosenthal and associate Amanda Jassem Jones in Weston, didn't return a request for comment by deadline.

Reimer, Dezer Development's in-house counsel, also didn't return a request for comment by deadline.

Dezer has won some of its other lawsuits against Intracoastal Mall tenants.

In September 2014, the company sued tenant Rudy's Barbershop and Spa LLC, saying it didn't pay monthly rent and assessments. The court ordered the tenant out.

Dezer Intracoastal sued to evict Prestige Beauty Academy International Inc. alleging it owed $126,370. The two sides settled, and the case was dismissed, court records show.

Dezer Development has submitted no redevelopment plans or applications to the city for the mall, according to community development director Justin Proffitt.

In 2015, it obtained a zoning change allowing redevelopment with up to 2,000 residential units, 2.5 million square feet of commercial space and buildings up to 40 stories tall on the east side of the site. Building heights would scale down to three stories on the west side. 

Dezer submitted a traffic study in May showing an aerial site plan that marks areas for retail, restaurants, townhouses and other residences. The aerial view also shows a plan to carve out some of the land and allow water from the Intracoastal Waterway to flow into the property.

Dezer Development, based in Sunny Isles Beach, was founded by Michael Dezer and is run by his son, Gil Dezer. Its most recognized project out of its many luxury high-rises is the car elevator-equipped Porsche Design Tower.

Phillips, who represented Sea Grill, said he isn't surprised with the outcome of his client's case.

“We expected the appellate court to affirm the trial court because the trial court's ruling made sense based upon the clear and unambiguous language set forth in the lease,” Phillips said. “Our clients paid all CAM charges and increases they were supposed to pay, and we don't believe the landlord ever had any case to try and evict them.”

Phillips is founding shareholder and managing partner at Phillips, Cantor & Shalek in Hollywood. He worked on the case with shareholder and equity partner Jeffrey Shalek.

If Dezer Development is trying to push out tenants, Phillips said alternatives are available.

“He can always buy out a lease, he can promise to move them into a new retail spot that he is going to be developing on the property and then negotiate the tenant improvement allowance,” he said. “The parties can always agree to change the terms of a contract.”

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Dezer Evicting Some Tenants From Mall It Wants to Redevelop