24 Jul Partner in Failed Miami Project Sues to Recoup $59M Investments
Partner in Failed Miami Project Sues to Recoup $59M Investments
A subsidiary of a Hong Kong construction engineering firm is asking Miami-Dade Circuit Court to enforce the sale of a vacant 2.4-acre site and repayment from the proceeds.
By Lidia Dinkova | Daily Business Review, July 19, 2019 at 04:30 PM
A would-be developer on a defunct project in Miami’s Brickell District claims a partner still owes over $58.8 million for this and another venture that didn’t pan out.
The developer wants to recoup its money either through the sale of the Brickell site and a lien foreclosure or the dissolution of the limited liability company that owns the property.
The joint venture project, CCCC Miami World Trade Center, was supposed to be a 3 million-square-foot development on 2.4 acres, rising 59 stories with a mix of condominiums, hotel, office and retail.
Nearly five years after the plan launched, the property bounded by Miami and Southwest First avenues and 14th Street and 14th Terrace remains vacant.
The two sides were locked in lawsuits between each other in Hong Kong. The feud moved to Miami-Dade Circuit Court on June 25 when Champ Prestige International Ltd. sued erstwhile partner China City Construction (International) Co. Ltd. and the site owner, CCCC International USA LLC, seeking to recoup its investment.
Champ Prestige is a British Virgin Islands-based subsidiary of Hong Kong-based Asia Allied Infrastructure Holdings Ltd., a construction engineering company.
The complaint seeks dissolution and foreclosure of an equitable lien.
In 2014, China City Construction, a Hong Kong-based subsidiary of China City Construction Holding Group Co., formed Dingway Investment Ltd. and three companies through which Dingway owned the Brickell site, according to the complaint. CCCC International USA is the last company in the chain making it the titleholder. It bought the site for $74.4 million in 2014.
In 2016, Champ Prestige paid $40.5 million for a 45% interest in Dingway, and China City Construction retained the rest. The agreement covered the potential failure to meet financing and development goals. China City Construction agreed to repay Champ Prestige by buying back the stake or selling the property, according to the complaint.
China City Construction has yet to hold up its end of the bargain, said Miami attorney Stevan Pardo, who filed the complaint. He is a partner at Pardo Jackson Gainsburg.
At one point, Champ Prestige and China City Construction hired a CBRE Inc. professional to appraise the value of the Dingway shares and sell them. The trio communicated via the WeChat cellphone app, but China City Construction stopped responding to Champ Prestige’s inquiries, according to the complaint.
CCCC International USA attorney Maria Isabel Hoelle declined comment. She is working on the case with Hector Lombana, founding partners at Lombana Hoelle Trial Law in Coral Gables.
China City Construction and company representative Shan Gao didn’t respond to emails seeking comment.
Pardo said the legal threshold to dissolve CCCC International, a Delaware-registered company, has been met. He also filed a lis pendens with the suit.
In addition to the $40.5 million, $18.4 million is allegedly owed on a different transaction in which a Champ Prestige sister company agreed to acquire subsidiaries of China City Construction’s parent company with future joint projects in mind, Pardo said.
Listco Group is the parent company of Champ Prestige and Asia Allied. Another subsidiary, AAI Investments Holdings Ltd., in 2015 agreed to buy the shares of CCCC Development Ltd., a subsidiary of China City Construction sister company China Chengjian Investment Ltd. for $84 million, according to the complaint.
“That transaction also unfortunately went south. Our client, the parent of Champ Prestige, paid a substantial portion, about $140M in Hong Kong dollars,” Pardo said.
The two sides walked back on that acquisition and China Chengjian returned some of the money AAI Investments already had put in. AAI Investments sued in Hong Kong for the rest.
In 2017, Listco and China City Construction Group entered a series of agreements, one of which said AAI Investments would be paid back through the Brickell land sale. AAI Investments sought and won enforcement of this agreement in a Hong Kong court. AAI designated Champ Prestige the recipient of this money.
“This was an investment into a series of projects,” Pardo said. “The only important aspect to it is that the sale of the property in Brickell by agreement is proposed to pay off that obligation as well.”
Lidia Dinkova covers South Florida real estate for the Daily Business Review.