Developer, Lender Trade Lawsuits For Control Of Stalled 50-Story Miami Tower

Monarch Alternative Capital has been the senior lender for an unfinished 50-story hotel and condo tower at the Miami Worldcenter megaproject for a month, but it is already pursuing a court-ordered foreclosure to take over the project from its developer.

The developer, Royal Palm Cos., filed a countersuit Monday morning claiming Monarch is engaging in predatory tactics and that the project's original lender, an affiliate of World Trade Center developer Silverstein Properties, stopped funding the construction loan last year.

Monarch, through its affiliate, Legacy Lender Holdings LLC, sued to foreclose on the Legacy Hotel & Residences last week, alleging that RPC, led by Dan Kodsi, defaulted on a construction loan issued by Silverstein Capital Partners.

The New York-based investment firm, which specializes in opportunistic and distressed assets, purchased the partially funded note from Silverstein on June 6, according to the lawsuit, and filed the suit July 2.

Kodsi landed a $340M construction loan from Silverstein in December 2021 for the 50-story project planned at 903 NE First Ave.

The loan was for the construction of the 308 condo units and 218 hotel rooms that RPC had broken ground on in August that year. The loan was modified once in December 2023, increasing the debt by $3.2M.

In March 2024, construction on the tower on the 1.5-acre lot was indefinitely stalled due to penetrators for plumbing and electrical being in the wrong place, Kodsi told the South Florida Business Journal last year. He said at the time he expected the work to resume in a matter of months.

Kodsi told Bisnow on Sunday that Silverstein couldn't fund the loan due to capital pressures with other projects, which led to the delays in construction.

“Despite the loan being fully closed, Silverstein abruptly informed RPC that it would no longer fund the remaining balance, creating significant disruptions and major delays for the Legacy projects,” Kodsi said in a statement.

Silverstein didn't respond to Bisnow's requests for comment.

In March, Kodsi told the SFBJ that he was getting ready to restart construction and find a new senior lender, but during the break in construction, disputes from contractors started to pile up.

A dozen contractors filed liens and lawsuits against the developer in Miami-Dade Circuit Court. The lien foreclosures on the property totaled nearly $27M, the SFBJ reported.

Monarch claims in the suit that RPC began missing payments on the debt this January, adding that the stalled construction constitutes a loan default. It also alleged the borrower missed April interest payments and left fees unpaid. It also failed to pay 2023 and 2024 property taxes, according to property records provided by Vizzda.

The 1,000-page-long complaint names Legacy MWC Trustee LLC, Kodsi, Royal Palm Cos., Participant Capital Fund and more than 30 other related entities as defendants.

In the counterclaim filed Monday morning, RPC alleges that Monarch’s move to foreclose stemmed from a prior dispute over a failed joint venture involving the Coco Beach development in Puerto Rico, where the partners built a Hyatt Regency hotel.

Kodsi claimed RPC exposed misconduct on the project, including alleged fraudulent misrepresentation, bank fraud and civil conspiracy on the project. His claims couldn't be independently verified.

Monarch declined Bisnow’s request for comment. Josh Rubens, a partner at Kluger Kaplan who is representing Monarch, didn't respond to Bisnow’s request for comment.

“This is not a routine lender-borrower dispute — it is a calculated and retaliatory attack by Monarch, following a failed attempt to strip Royal Palm of its rightful equity in a separate project,” Kodsi said in a statement. “After their misconduct was exposed in that earlier dispute, Monarch shifted its focus to the Legacy Project and deliberately acquired a partially funded loan with the intent to force Royal Palm into foreclosure.” 

RPC claims that Silverstein conspired with Monarch to transfer the loan without providing notice and that Monarch is withholding nearly $3M of RPC’s capital in the project.

This isn’t the first predatory accusation against Monarch. 

In 2021, New York-based 601W Cos. accused Monarch of a “loan-to-own” scheme, claiming it used the pandemic and civil unrest to force default on the mostly vacant, $350M renovation of the Dayton’s department store in Minneapolis after buying its $78M mezzanine loan, the Minneapolis/St. Paul Business Journal reported at the time.