Cottonwood Group filed a foreclosure lawsuit against affiliates of Michael Stern’s JDS Development Group after acquiring the loan for the Mercedes-Benz Places condominium project, according to an April 6 announcement.
The legal action highlights ongoing financial and development challenges at one of Miami’s major real estate projects. The outcome could affect hundreds of future residents and reshape plans for a prominent site in the city.
Maxim Credit Group originally provided an $85 million loan for the project in July 2015, with maturity extended several times before expiring in January 2025, as shown by records from Vizzda. Cottonwood took over the loan on March 24 and now alleges that JDS affiliates defaulted by failing to repay it. The financing is secured by property at several Southwest 12th Street addresses, including Southside Park in Miami, where construction began last year on an 800-unit, two-tower development.
According to court filings, Cottonwood claims nearly $100 million is owed—$80.4 million in principal and almost $20 million in interest—with additional daily interest accruing since March 30. Several subcontractors have also filed liens alleging unpaid work at the site.
JDS said its team is working to close a new construction loan package that would replace current bridge financing. “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,” JDS’ statement reads.
A source told The Real Deal that this package may include a $450 million senior loan, $100 million mezzanine financing, a $195 million C-PACE loan, and $100 million preferred equity—for total planned funding of $750 million. Sales for Mercedes-Benz Places launched last year with prices starting at $500,000 per unit; plans call for more than 130,000 square feet of amenities including restaurants and fitness facilities alongside a hotel component. In exchange for city approval granted in 2020, JDS agreed to build an $8 million firehouse and contribute another $5 million toward public benefits such as improvements to Southside Park.
Elsewhere in South Florida, JDS is planning other high-profile developments—including Dolce & Gabbana-branded condos at Brickell Avenue—and remains involved with projects like Monad Terrace on West Avenue despite ongoing litigation between Stern and his partner Gianluca Vacchi over investment disputes.
