Sunny Isles Beach landlord puts the squeeze on Miami Juice owners: litigation
An entity controlled by Barry Shelomovitz, a Sunny Isles Beach real estate investor who is co-developing the Residence Inn by Marriott, is being sued by his largest mom-and-pop tenant, the Miami Juice restaurant, at another shopping plaza nearby.
Miami Juice’s owners allege Shelomovitz’s investment firm wants to squeeze them out of their long-term lease and evict them, based on a growing list of legal technicalities and allegedly petty complaints. It’s a legal move that they say appears to be a not-so-veiled effort to pave the way for him to redevelop that site into his next multimillion-dollar opportunity.
“This landlord is a bully, and my client plans to fight this to the very end,” said Kluger Kaplan partner Abbey Kaplan, who represents Miami Juice owners Isaac and Bonita Shoki.
The Shokis first sued the developer’s LSB Investments Corp. in January 2016 as the once-amicable business relationship soured over limited and intermittent access to the plaza’s valet parking, they say.
Shelomovitz countersued in February and asked the judge to order the Shokis to vacate the leased space much sooner than expected —immediately, in year seven of a 25-year lease — based on a technicality: He alleges that he did not receive a 60-day written notice from the couple when they renewed their lease in April 2014. The Shokis, who say they had a more congenial relationship with their landlord at that time, instead allegedly told Shelomovitz on three separate occasions they wanted to renew and remain in the plaza. Verbal notification was good enough for Shelomovitz, and the monthly rent increased slightly, about $240 per month, according to the terms in the original lease.
Miami-Dade County Circuit Judge Thomas Rebull earlier this month ruled that Miami Juice can remain — for now — in its long-term outpost in Millennium Plaza at 18660 Collins Avenue, across the street from the epicenter of the $1 billion-plus wave of new condominium towers rising now in Sunny Isles Beach, including the Porsche Design Tower and the first Cesar Pelli-designed Armani/Casa in the United States. It is a storefront the Shokis have occupied for years, long before the current construction boom and even before Shelomovitz purchased the 17,296-square-foot retail strip center in 2009.
Yet, the legal victory may be short-lived, Kaplan said, as Shelomovitz has already informed them he intends to file a new lawsuit with new reasons to evict, including continued haggling over the parking situation — he now says they owe him $1,700 in unpaid valet fees — as well as new noise complaints from some of the other tenants. The small plaza currently counts Il Vecchio Pizzeria, a beauty salon, an eco-friendly dry cleaners and Shelomovitz’s own real estate attorney, Andrew D. Tarr, who is representing him in the lawsuit, among the current tenants.
In effect since 2009, the original lease gives the Shokis the right to lease the space for five years at a time, and renew up to four times, allowing them to remain the largest tenant at Millennium Plaza until 2034. It also contains another key clause: The Shokis retain the first rights to purchase the plaza if he ever decides to sell. It was aimed to be a win-win for everyone: Shelomovitz got to keep a large and profitable anchor tenant in place while his newly acquired property continued to rise in value, and the Shokis, with a long-term location secured for their growing business, could initiate their ambitious plans to transform the modest retail storefront into the upscale eatery it is today, with a loyal client base and 60 employees.
Rebull’s ruling protects the Shokis’ already sizable investments in the restaurant and the leased space. They say they have poured more than $850,000 of their own money into capital improvements for the kitchen, old-fashioned wooden bar and fresh produce market, all with Shelomovitz’s prior knowledge and approval, according to Kaplan. That’s in addition to the $1 million in rent they have paid to date.
If Shelomovitz wanted to evict, he should have initiated legal proceedings in 2014, before the first lease renewal period began, Kaplan said. And if he truly intended to evict over financial reasons, he should not have accepted their rent checks, now topping $12,295 a month, for the past two-and-a-half years, he said.
“I’ve been doing this for 40 years, and there’s nothing worse than an arrogant landlord,” Kaplan told The Real Deal. “Especially one that is being paid every bit of money he is contracted to accept.”
Shelomovitz’s attorneys, Tarr and Ryan Gersten of Rogers, Morris & Ziegler, did not respond to requests for comment from TRD.
Shelomovitz has been a fixture in Sunny Isles Beach for decades — first as a small business owner himself and now as a budding developer in Sunny Isles Beach. He owned the former Wings Beachmarket, a tourist retail shop at 17700 Collins Avenue for 22 years before he partnered with Miami Beach real estate developer Robert Finvarb in 2014 to raze that building and a 31,900-square-foot lot, which he purchased in 1992 for $700,000, to make way for the 194-room, Kobi Karp-designed Marriott hotel. In March 2015, the co-developers secured a $46 million construction loan from Florida Community Bank to finance the 19-story hotel that is currently under construction and expected to be open within the year.
Miami Juice attorneys Kaplan and Marko Cerenko of Kluger Kaplan submitted a request for a final judgment on this case, just before the holiday weekend, and are waiting for a response from the judge.
Kaplan said his clients don’t want a drawn-out legal battle, but are prepared to fight to stay and protect their investment. If Shelomovitz wants Miami Juice out, it could cost him “way north of $2 million” just to buy out the remainder of their lease, in addition to other penalties, he said.
Source: The Real Deal