Witkoff, Monroe Capital Sued by Shore Club South Beach Partner

From left: Witkoff’s Steve Witkoff and Monroe Capital’s Theodore Koenig with the Shore Club (Monroe Capital, Witkoff, Shore Club, Getty)

Current, July 25, 5:50 p.m.: A former proprietor of the Shore Club in South Beach sued developer Witkoff and its fiscal backer on the project, Monroe Cash, alleging it was illegally reduce out of its share of possession in the oceanfront house through a “crooked and secretive land get.”

An entity tied to The Clark Estates, the loved ones of the late newspaper publisher and businessman Stephen Carlton Clark, is searching for at minimum $125 million in damages, which is the sum it envisioned to obtain from a beforehand prepared undertaking on the website. SC Philips Clark LLC submitted the lawsuit in New York this 7 days, as first noted by Business Observer. It provides to a slew of lawsuits that have associated the Artwork Deco hotel.

The complaint alleges that Steven Witkoff, who heads the New York-primarily based firm, “appears to have hatched and orchestrated the scheme” to in the long run erase SC Philips Clark’s fascination in the Shore Club, a 3-acre property at 1901 Collins Avenue. The lawsuit claims that Witkoff and Monroe violated the gain participation agreement that was place in spot to safeguard SC Philips Clark’s stake.

A spokesperson for Witkoff stated the lawsuit is “baseless.”

“We will protect it vigorously and we keep on being extremely self-confident that it will in the long run be dismissed,” according to the spokesperson’s statement.

Witkoff and Monroe are working on ideas to renovate and redevelop the Shore Club into a luxurious condominium and hotel intricate. The historic resort was crafted in 1939 and redesigned by architect David Chipperfield in the early 2000s, when hotelier Ian Schrager reopened it as a Morgans Lodge Group home. It is been closed considering the fact that the pandemic started.

An affiliate of SC Philips has owned the hotel for yrs. Fortress and HFZ Cash Group joined SC Philips in 2013 to redevelop the home into a luxurious apartment and lodge, according to the grievance. HFZ’s options to do so fell apart when the condominium current market slowed down in 2018, forcing it to cancel the prepared Fasano-branded project and return buyers’ deposits. New York-centered HFZ would later on face a litany of problems in New York, as perfectly, which includes at the Bjarke Ingels-built Xi development.

Monroe obtained HFZ’s pursuits in the Shore Club entities that owned the house in 2020, and partnered with Witkoff to guide the redevelopment of the web site.

“Monroe and Witkoff then targeted Plaintiff’s pursuits — interests that have been not theirs to get,” the complaint alleges, professing that the alleged scheme “unfolded systematically.”

Shore Club Mezzanine Financial institution LLC, which SC Philips Clark refers to as a “Monroe alter ego,” executed a UCC foreclosure with Monroe on both equally sides of the deal, foreclosing on itself, according to the criticism. SC Philips Clark reported it discovered out that Monroe and Witkoff were the new house owners after The Genuine Deal noted on their options for the residence, 5 months after they obtained manage final yr.

Monroe and Witkoff relied on “disinformation, and [conducted] a series of sharp-elbowed, unscrupulous maneuvers — which include clandestine residence assignments, a collusive U.C.C. foreclosure, and selectively and misleadingly withholding critical details from courts in equally New York and Florida,” according to the complaint.

In addition, Monroe and Witkoff “exploited the downfall” of HFZ to choose handle of the entity that SC Philips Clark experienced made its offer with, SC Philips Clark promises in the accommodate.

An affiliate of the Clark Estates sued the HFZ-tied LLCs that owned the Shore Club final spring to quit the sale of the resort. Fasano, the luxury Brazilian hospitality brand that HFZ introduced in to redesign the previous job, also sued for about $6 million. In a uncommon get for HFZ, a choose ruled in favor of the developer in that circumstance last 12 months.