HFZ Capital off the hook for $6M in failed Shore Club South Beach deal

HFZ’s Ziel Feldman with the Shore Club
HFZ’s Ziel Feldman with the Shore Club (Getty, Facebook via Shore Club) www.therealdeal.com

The win in as anomaly for the financially and legally embattled New York developer

HFZ Capital Group is off the hook from paying $6 million to the planned operator of the Shore Club in South Beach, following litigation tied to the companies’ failed deal.

HFZ Capital Group wanted to redevelop the property at 1901 Collins Avenue in Miami Beach into a condo-hotel and signed luxury Brazilian hospitality brand Fasano to manage the revived project. In 2017, HFZ Capital canceled both its redevelopment plan and Fasano’s contract, in light of the slow condo market.

Fasano, through its affiliate HMI Holdco, sued HFZ’s affiliate, Shore Club Property Owner LLC, in 2019, claiming HFZ Capital did not meet the conditions that would allow it to forego a termination fee.

The only way HFZ Capital could skip payment was for failure to secure financing on reasonable and acceptable terms, only after working diligently to obtain a loan, according to court records.

Miami-Dade Judge Michael Hanzman decided HFZ Capital met these conditions.

Although its attempts to score a loan were “admittedly not Herculean,” HFZ Capital made “commercially reasonable – albeit not ‘perfect’ – efforts,” Hanzman wrote in his May 18 final judgment. Hanzman noted South Florida’s condo market at the time was “volatile.”

By Lidia Dinkova for www.therealdeal.com
Read the full story:  www.therealdeal.com

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