The condo association
for a Miami River project is suing a group of developers and
subcontractors, alleging $10 million in design and
construction defects.
Terrazas Riverpark Village Condominium Association filed
suit last month in Miami-Dade Circuit Court against more
than 80 parties. The association alleges that unit owners
only discovered the defects in the 328-unit project, at 1861
Northwest South River Drive, after buying their condos.
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Terrazas Miami |
The report notes the
“generally poor conditions” of the roofing system, water
leaks in some of the units, cooling towers “in a state of
abandonment and [that] require significant repairs and
maintenance” and a smell of gas and fuel in the boiler room
that “may present a life safety issue since such gas may be
flammable.”
Terrazas has a complicated history. Miami-based B
Developments, one of the defendants named in the lawsuit,
built the towers with financing from Argentine investors,
according to the South Florida Business Journal. Principal
Miguel Angel Barbagallo wanted to target the middle-class
market, and built the towers on the site of a former mental
institution.
In 2006, New York-based lender iStar Financial, also named
as a defendant in the lawsuit, lent $84.5 million to build
the towers, but subsequently received a deed in lieu of
foreclosure when no condos sold, the Journal reported.
In 2010, Area Property Partners and Wood Partners bought
Terrazas in an off-market deal, intending to lease the
“distressed property” as rentals, according to a press
release. In 2013, Ares Management bought Area Property
Partners, according to a press release from that time.
In 2013, Ladder Capital bought Terrazas, according to the
website of SRF Ventures, which assisted Ladder in
underwriting and due diligence. The price was reported as
more than $75 million. Both companies are defendants in the
suit.
In 2014, the executives at Terrazas Miami, as the building
is also called, marketed the units as condos once again,
targeting middle-income buyers with prices between $224,000
and $500,000.
An online listing for Terrazas lists condos between one and
three bedrooms for rent from $1,495 to $2,485. The website
for the property lists one- to two-bedroom units for
purchase, priced between $325,500 and $412,800.
The Miami River towers aren’t the only project entangled in
legal woes tied to alleged construction defects. Unit owners
at the ultra-luxury condo development Glass in South Beach
filed suit in June, alleging the development group failed to
build the 10-unit, 18-story condo development in accordance
with building codes, manufacturers recommendations and
permitted plans. Meanwhile, the condo association for Aria
on the Bay filed suit in August, alleging a litany of
construction defects at the 53-story luxury tower near
Edgewater.