Michael Stern's Mercedes-Benz Condo Project Hit With Foreclosure Suit
Another one of JDS Development Group’s high-profile projects is the subject of a court dispute after its new lender filed an $80M foreclosure lawsuit on the site of the developer's planned Mercedes-Benz-branded condo tower.
An affiliate of The Cottonwood Group filed to foreclose on the site at 100 NE Eighth St. in Brickell less than a month after it acquired a bridge loan that was allegedly in default, according to its suit filed in Miami-Dade Circuit Court last week.
An affiliate of JDS Development, led by Michael Stern, purchased the assemblage, including city-owned property and adjacent land, for a total of $24M in 2020. Two years later, the developer landed an $86M acquisition and construction loan from Maxim Capital Group for the project.
In 2024, JDS announced its partnership with the car company to brand the mixed-use tower as Mercedes-Benz Places in Brickell. The SHoP Architects-designed building is planned to reach 67 stories with 791 condos, a 174-key hotel and 200K SF of office space.
But JDS' affiliate, 191 SW 12 Owner LLC, didn't repay its loan upon its Jan. 15, 2025, maturity date, according to the suit. Maxim transferred that loan to Los Angeles-based Cottonwood affiliate CWRE SSF Flamingo Capital in March, the South Florida Business Journal reported.
“We are aware of the action recently filed by a bridge lender related to a routine loan maturity, and are in active discussions with them to reach an amicable and swift resolution,” a JDS Development representative told Bisnow in a statement. “We are fully committed to the long-term success of the project and we remain focused on completing it to the highest standard of excellence.”
The team is in the process of finalizing a construction loan financing package to replace the bridge financing in the coming weeks.
A source close to the matter told Bisnow the loan is for $755M, which would be one of the largest in Florida’s history behind Related Ross' $772M loan it landed last year for the 10 and 15 CityPlace office towers in West Palm Beach.
The suit doesn't directly name JDS or Stern. Cottonwood claims the borrower owes $80.4M in principal and interest and fees.
The suit also names construction vendors who have filed liens against the developer. Six construction lien foreclosure suits have been filed against 191 SW 12 Owner LLC, which is managed by Stern, SFBJ reported.
Holland & Knight attorney Christopher Ezell, who is representing Cottonwood in the suit, declined to comment.
Stern made a name for himself in NYC, developing the world's skinniest skyscraper, the 1,428-foot-tall 111 W. 57th St. on Billionaires' Row, as well as Brooklyn's tallest building before losing it to Silverstein Properties. The developer relocated to Miami Beach and is tied up in a handful of lawsuits with his local projects.
The developer was hit with a lawsuit in December from an investor, Italian entrepreneur Gianluca Vacchi, claiming Stern schemed to gain a $2.5M investment for a development in Miami Beach.
Vacchi also invested in the Mercedes-Benz tower, JDS' upcoming Dolce & Gabbana Residences at 888 Brickell Ave. and the $120M condo buyout development at 1250 West Ave. in Miami Beach with Terra Group.
Stern is also suing the anonymous operator of the website JDSPulse.com over its online "smear campaign." At the time the suit was filed, the website was removed or inactive. It is now back online and stating that "all such claims remain subject to judicial review and have not been conclusively proven."
Stern's attorneys, Stearns Weaver Miller's Grace Mead and Joseph Onorati, withdrew from that suit in December due to "irreconcilable differences." No replacements have been made, according to the docket in Miami-Dade Circuit Court.
