CIM Group escalated its legal war with Goodtime Hotel’s owners, filing a $149.3 million foreclosure complaint to seize the Miami Beach property.
On Jan. 27, an affiliate of Los Angeles-based CIM sued an entity managed by Eric Birnbaum and Michael Fascitelli, who lead New York-based Imperial Companies, for allegedly failing to live up to forbearance agreements since 2024 when the entity stopped making regular interest payments on a $152 million loan. The developers also allegedly did not pay off the debt when it matured the same year.
Birnbaum, Fascitelli and Jeffrey Gilbert, the attorney for CIM’s affiliate, declined comment.
The two partners have also been battling the lender over the 266-room hotel at 601 Washington Avenue in New York Supreme Court, where the same CIM affiliate last year sued Birnbaum and Fascitelli over a $10 million personal guarantee payment.
The developers bought the site for $36 million in 2015 and brought in music producer Pharrell Williams, nightlife impresario David Grutman and designer Ken Fulk as partners. Construction of Goodtime Hotel, which spans an entire block, was financed with a $45 million Bank OZK loan. Opened in 2021, the property is part of Marriott’s Tribute Portfolio.
A spokesperson for Grutman said he and Pharrell are no longer involved with Goodtime Hotel, according to the Miami Herald, which first reported the foreclosure. Despite its celebrity cachet, the property has struggled and faced operational challenges, including noise complaints that prompted a review of its conditional use permit by the Miami Beach Planning Board in 2021, court filings show.
Goodtime Hotel’s ownership entity owes roughly $149.3 million, plus accrued and default interest, late fees, costs and any advances under the loan documents, according to the foreclosure complaint.
CIM is also seeking to enforce the assignment of leases, rents, hotel revenues and security deposits, demanding that Birnbaum and Fascitelli either turn over or deposit all hotel income into the court registry while the foreclosure case is pending.
Meanwhile in the New York case, CIM alleges that the duo breached the guarantee by failing to make the $10 million payment when the loan matured. At the time, Birnbaum and Fascitrelli were negotiating with CIM to surrender the hotel via a deed-in-lieu of foreclosure.
In response, Birnbaum and Fascitelli filed a counterclaim accusing CIM of exploiting a drafting error in the guarantee that they claimed turned what was supposed to be a three-month obligation into a potentially open-ended exposure to operating shortfalls, taxes and debt service until the property reached stabilization.The developers contend that their former lawyer at Latham & Watkins missed the error when the CIM loan, originally for $164 million, replaced a previous financing. CIM later used the disputed language to force them into a 2023 forbearance and an additional personal guarantee, the counterclaim alleges.
