Airbnb, Miami Natiivo Developer End Lawsuits, Minimize Partnership
The two settled lawsuits against each other and won't be partnering on the Natiivo Miami condominium project.
March 11, 2020 at 04:21 PM
4 minute read
Airbnb Inc. and Miami developer Harvey Hernandez appear to have ended at least part of their joint venture providing for the development of home-sharing units weeks after suing each other.
San Francisco-based Airbnb and Hernandez and his NGD Homesharing LLC, which is developing projects intended for short-term rentals under the Niido and Natiivo brands, filed notices of voluntary dismissal with prejudice Tuesday after entering a confidential settlement. Airbnb's case was dismissed Wednesday.
The notices gave no details of the settlement, but the parties appeared to scale back their relationship.
"Moving forward, our relationship with Mr. Hernandez and NGD/Niido/Natiivo will not mirror our prior operating relationship," Airbnb said in an emailed statement. "We look forward to continuing to work with real estate partners to help guests have amazing experiences and hospitality entrepreneurs grow their businesses."
Hernandez in an emailed statement added he is happy the lawsuits are over.
"Now it's business as usual. I look forward to continuing work with Airbnb and other home-sharing booking platforms in the future," he said.
Airbnb's federal lawsuit was filed to deflect attention from the home-sharing company's shortcomings, attorney Michael Austin said when he sued for NGD and Hernandez.
"NGD and Airbnb have reached a mutually acceptable settlement of their business disputes, and both parties have now dismissed their respective lawsuits with prejudice to effectively end all litigation between them. The parties can now focus their energy on moving forward with their respective business operations," Austin, partner at McDermott Will & Emery in Miami, said in a news release Wednesday.
NGD confirmed Airbnb won't be a partner in the Natiivo Miami condominium tower project. NGD previously identified Airbnb as a design consultant for common areas and unit interiors.
That news release sent last September before the lawsuits said Natiivo Miami unit owners would be able to use Airbnb's Friendly Buildings Program, which would allow owners and property manager NGD to share revenue generated from home sharing.
"We will continue to utilize Airbnb's platform for our Bookings @ Niido and Natiivo," Hernandez said in an email.
The lawsuits said the two sides started collaborating in 2016 and expanded to an operating agreement signed in January 2019.
Airbnb was the first to sue, filing a lawsuit Jan. 23 in the Northern District of California against Hernandez and NGD after investing $11 million.
Airbnb claimed its partner failed to deliver any of the seven promised projects last year and siphoned off $1 million from their joint venture as a project loan that went into default. Airbnb claimed NGD produced fraudulently backdated documents when asked about the loan.
The suit listed a collaboration agreement that Airbnb argued it allowed to end the partnership if NGD failed to build the projects in 2019 and the same number again this year.
Covington & Burling's W. Douglas Sprague in San Francisco, a former head of the white-collar crime unit in San Francisco's U.S. Attorney's Office, signed Airbnb's complaint. Covington attorneys Ethan Forrest and Annie Shi in San Francisco and David Buckner of Buckner + Miles in Miami also represented Airbnb. They didn't respond to a request for comment by deadline.
The lawsuit filed the next day in Miami-Dade Circuit Court by Hernandez and NGD argued they were allowed to take the $1 million loan and Airbnb was to blame for project delays by making unnecessary demands and then going "radio silent."
Hernandez's NGD is developing several Niido and Natiivo projects across the U.S. with a home-sharing capability. In a traditional condominium, the homeowner association limits or bans short-term rentals.
The 50-story Natiivo Miami under construction at 159 NE Sixth St. will have 412 units and 70,000 square feet of amenities. The building will include 104 office condos totaling 135,000 square feet. A March 2 news release said Airbnb wasn't a partner but the project would open to all home-sharing platforms, including Airbnb.
Some of its other projects are the 324-unit Niido Powered by Airbnb in Kissimmee and 33-story, 249-unit Natiivo Austin set to open next year.
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