Investor alleges Chetrit Cut It Out of Hollywood Beach Deal
Joseph Chetrit with Hollywood Beach Resort (Getty, Google Maps)
An investor alleges New York megadeveloper Joseph Chetrit and a Miami attorney conspired to cut it out of a lucrative deal to redevelop the Hollywood Beach Resort.
Miami-based private equity real estate firm EquiShares, led by CEO Matt Press, alleges it brought Chetrit and his firm Chetrit Group into a deal to form a partnership that would redevelop the oceanfront condo and commercial property. But instead, EquiShares alleges Chetrit created a company with the help of Miami attorney Oren Lieber to buy out all the condo units, take control of the property and push Press to the sidelines, according to a lawsuit filed last week in Miami-Dade Circuit Court.
Chetrit did not return requests for comment. Lieber declined to comment. Chetrit has yet to file a response in court to the allegations.
Chetrit’s plans to remake the struggling property at 101 North Ocean Drive made a big splash in Hollywood. Over the years, developers have tried and failed to gain control of the condo association and revamp the nearly 100-year old property that spans 10 acres of beachfront land. Chetrit, who has already bought out about 90 percent of the residential units, according to the suit, appeared to have the cash and experience to do it.
EquiShares’ lawsuit alleges Press initially spotted the Hollywood Beach deal and brought Chetrit into the project in 2019. The two had previously worked together on a portfolio deal in Virginia where EquiShares’s role was an originator, and Chetrit and his firm would contribute capital, according to the lawsuit. That deal was structured as a joint venture partnership.
Press claims in the suit that he made a similar agreement with Chetrit for the Hollywood Beach property. Chetrit would contribute capital, while EquiShares would receive some equity in the project for putting the deal together and assisting with operations and labor.
EquiShares said it was in discussions with other developers to join the project, but Chetrit told Press the Chetrit Group didn’t need another partner, according to the lawsuit. Chetrit also suggested the law firm Ritter Zaretsky Lieber & Jaime, and attorney Oren Lieber, represent them and assist in their partnership agreement.
The deal required a big lift. Before development could begin, Chetrit and EquiShares would have to buy out a majority of the 400 individual units at the property.
Press’ work included convincing the condo board president that the Chetrit Group/EquiShares’ proposal was better than the other competing bids, the lawsuit states. He also brought in a broker to negotiate the sale of the residential units, while he handled the sale of the commercial units, according to the suit.
But to buy out the residential units, Chetrit and Lieber then created a company called Hollywood Horizons, according to the suit. Hollywood Horizons listed Jonathan Chetrit, the son of Joseph Chetrit, as the sole manager.
In the lawsuit, Press claims that he asked Lieber about Hollywood Horizons, but Lieber assured Press he didn’t need to be part of the entity. It was the partnership agreement with Chetrit and the Chetrit Group that mattered.
Press then worked to finalize the partnership agreement in writing. In June of last year, Press and Chetrit had a phone call to discuss the partnership agreement, in which Chetrit told Press to take a 5 percent equity stake, an amount much lower than what they initially agreed upon, according to the lawsuit.
“Joe, I have to tell you that I’ve been working with you in good faith on the Hollywood Beach Resort deal, but I’m starting to feel like it’s being hijacked from me,“ Press said in an email to Chetrit, the suit states.
Press rejected the 5 percent equity stake offer. Chetrit then offered Press another deal. He could recruit another investor group to take a 25 percent equity interest in the project and Chetrit Group would retain a 75 percent equity interest. Under the agreement, EquiShares would receive 10 percent of the Chetrit Group’s 75 percent interest and an additional equity stake from the third-party investor, according to the lawsuit.
Press claims he agreed to this revamped deal. Chetrit and Lieber allegedly refused to put anything in writing, however, while Press continued to work on the project.
Press eventually retained separate counsel to represent EquiShares’ interest in the partnership. But it was too late. They discovered that Hollywood Horizons had already started closings on the residential units and Press was cut out of the deal, according to the lawsuit.
Press’ counsel told Lieber and Chetrit that they were required to provide Press and his investors the 25 percent equity stake. Chetrit responded the agreement with Press was for a 10 percent profit share, not an equity stake. Press alleges they never discussed a profit share, the suit states.
“I don’t want to be in a situation where I have to now pay ordinary tax income when I’ve worked and will continue to work on a project for years to come,” said Press in an email to Chetrit, according to the lawsuit. “I want to be part of the development process, plus I want to ensure that my 10% is protected and that I have a right to the books and overall project.”
Chetrit allegedly responded, “The active party in this deal is Chetrit, we are not doing a partnership.”
Press said after considering the profit share, he refused to accept the terms of the deal. EquiShares is suing Chetrit and Chetrit Group for fraud. It is suing Ritter Zaretsky Lieber & Jaime LLP and Oren Lieber for aiding and abetting fraud.
