Nahla Capital is suing the seller of the iconic Raleigh property in Miami Beach over a deal involving the use of Peter Marino’s designs.
Nahla Raleigh LLC filed a complaint in New York against BSD Raleigh Trustee LLC last week. In October, BSD Raleigh, a trustee of the Raleigh Land Trust, sold the 3-acre oceanfront assemblage at 1775, 1757 and 1751 Collins Avenue to Nahla for $270 million.
Kevin Neuner, Shvo’s CFO, signed the deed on behalf of the seller.
Shvo, the company led by developer Michael Shvo, declined to comment, citing the fact that it is not a party to the lawsuit. It’s unclear who controls the seller LLC following the sale of the property.
New York-based Nahla, led by Genghis Hadi, alleged that it’s entitled to receive $10 million that’s in escrow because of the seller’s “failure to carry through on its promise that buyer would be able to use certain designs by Peter Marino and Peter Marino Architect,” according to the complaint.
Marino and his firm are not named as defendants. The company did not respond to a request for comment. Hadi of Nahla also did not respond to requests for comment.
Michael Shvo and his partners planned to redevelop the Raleigh, South Seas and Richmond hotels into a luxury condo and hotel project with a private club, but Shvo failed to hold onto the property. Shvo and his partners, Deutsche Finance America and a consortium of German pension funds, paid $243 million for the Raleigh assemblage in 2019 and planned a $1 billion redevelopment.
A spokesperson for Revetas, the London-based fund manager that was tapped to reposition Deutsche Finance America’s investments, did not immediately respond to a request for comment.
Shvo and his partners tapped Marino, a New York-based architect known for his leather-clad biker style and his designs of high-end retail stores, to design the Raleigh alongside Kobi Karp of Miami-based Kobi Karp Architecture and Interior Design. Shvo also inked an agreement with Rosewood Hotels & Resorts to brand the planned 17-story, 44-unit condo tower and manage the 60-key hotel.
Shvo had started work on the project by the time it sold in mid-October.
The seller “repeatedly emphasized” its partnership with Marino and Marino Architect during negotiations with Nahla, and the LLC agreed to deposit $10 million into escrow, pending an agreement to assign a license for the designs to the buyer, according to the suit. If the LLC failed to obtain consent from Marino within 45 days, the buyer would be entitled to receive the funds in escrow, according to the complaint.
“Seller further agreed that the Marino consent would ‘substantially’ be in the form of a certificate and consent attached to the purchase agreement, subject to any ‘reasonable modifications’ requested by Marino and Marino Architect,” the lawsuit states.
That agreement was extended when the seller allegedly failed to make an introduction to Nahla. That introduction was made Dec. 11, with Hadi, Shvo and Marino present.
But on Jan. 8, Marino’s attorneys told Nahla that Marino and his firm would only agree to allow Nahla to use its designs if they agreed to the following: that Marino’s firm was not the architect of record, that Marino’s firms make no representation that the designs comply with local laws or regulations, that the buyer use those designs at its own risk, and that the buyer must exclude Marino’s name and the name of his firm, among other requirements.
Nahla responded that it could not agree to the conditions because “they were materially more restrictive” than what Nahla signed up for in the purchase and sale agreement.
Two days before the extended deadline expired, the seller LLC demanded the escrow agent return the $10 million payment, calling Marino’s conditions “reasonable.”
Shvo’s sale of the Raleigh development largely marked an exit from Miami Beach for Shvo, who also, along with his partners, planned three office projects in the city.
Last year, he and his partners sold their Alton Road office development site via a deed-in-lieu of foreclosure to Infinity Collective for $28.3 million last year. Shvo also planned to develop a clock tower building on Lincoln Road, but his firm did not end up purchasing the property.
Another Shvo affiliate still owns an office development site on Washington Avenue in Miami Beach.
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