Ian Bruce Eichner’s Continuum Company is being sued by a lender that alleges it’s owed more than half a million dollars in fees tied to the firm’s planned condo buyout in North Miami.
Boston-based CW Investment Advisers filed a lawsuit against New York-based and Miami-based Continuum over the financing backing the $61 million buyout of the Mariners Bay condo building at 12000 North Bayshore Drive. The complaint was filed in New York County Court.
The four-story, 46-unit condo building would eventually be torn down and replaced with a 20-story, 267-unit condo building.
Continuum tapped a national mortgage brokerage firm to shop for financing for the project last year and selected CW, according to the lawsuit.
On the morning of the proposed closing this summer, CW alleges that Continuum “threw a curveball” and was no longer willing to meet negotiated project milestones. Continuum walked away from the deal, according to the complaint.
The lawsuit is tied to the term sheet the developer and lender signed, in which Continuum allegedly agreed to pay CW’s expenses for negotiating, underwriting and syndicating the proposed loan. Continuum also agreed to pay a 1 percent break-up fee, CW alleges. CW sued for breach of contract.
“After abandoning the transaction at the last minute, Continuum refused to honor its
obligation to pay CW’s loan expenses or the break-up fee,” the lawsuit alleges.
Eichner, chairman and CEO of Continuum, declined to comment on pending litigation, but disputed the allegations and said the firm will “vigorously defend ourselves against these spurious charges.”
An affiliate of Continuum entered into a deal to acquire the units at Mariners Bay, records show. The developer has not yet completed the purchase.
Continuum did not respond to a request for an update on the buyout, but condo buyouts are often delayed and are notoriously tricky to complete.
The term sheet between CW and Continuum was based on a purchase price of more than $61 million and a loan amount equal to the lesser of $51 million, an amount not exceeding a 61 percent loan-to-cost ratio based on an approved predevelopment budget, or an amount not exceeding a 75 percent loan-to-cost ratio based on an appraisal of the property, the complaint alleges.
CW alleges that Continuum’s obligations to reimburse its loan expenses and pay a breakup fee were binding, according to the complaint.
Its costs and expenses, which CW claims totaled more than $820,000, included paying for a flood risk report, insurance consulting, outstanding judgments and liens, and more. The firm also states that it uncovered issues that included obligations imposed by the city of North Miami and a zoning appeal filed by a neighboring property owner “that added complexity, delay and cost to the transaction,” the complaint states.
CW said it only received $325,000 from Continuum in deposits, leaving a shortfall of nearly $500,000 in unpaid expenses. The lending firm is seeking damages totaling no less than $510,000, according to the lawsuit.
Continuum has a $3 billion, 1,000-unit condo portfolio in South Florida that includes planned projects in North Bay Village and Bay Harbor Islands. In August, Continuum secured a $67 million construction loan for the second phase of its Bay Harbor Islands condo project. The developer received the financing for La Baia North from S3 Capital Partners, a New York-based alternative lender that provides middle-market construction loans and bridge loans..
This summer, the development firm secured unanimous approval from the North Bay Village Commission for a special area plan, site plan and development agreement for the Continuum Waterfront District. The district is planned to have two Continuum condo towers, a 200-key Continuum hotel and a marina. One tower can now be up to 440 feet tall. The site includes the former Shuckers Waterfront Bar & Grill, now called the Palm Tree Club.
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