Forman Capital has initiated foreclosure proceedings on a development site in Miami’s Art & Entertainment District after alleging an $8.3 million loan default. The site, located at 1317-1352 North Miami Avenue, was intended for a 30-story condo-hotel project.
The lawsuit was filed on September 5 by an affiliate of Delray Beach-based Forman Capital, which is led by Brett Forman and Ben Jacobson. The complaint in Miami-Dade Circuit Court claims that the two entities owning the half-acre assemblage failed to repay the bridge loan when it matured on August 16. In addition to the principal amount, Forman Capital is seeking about $220,000 in default interest and fees.
Developer Dan Kodsi had been managing the project but is no longer involved. Kodsi and attorney Joseph Pardo confirmed this change to The Real Deal. Pardo, representing the borrowers, said his clients are working toward a solution with the lender.
“This project is transitioning from a land loan to a construction loan, and this is a timing issue,” Pardo said. “We are in active negotiations with the lender to resolve this, and we fully expect that it will be resolved promptly.”
According to Pardo, the ownership entities purchased the property for a total of $10.7 million in 2022 and are currently coordinating with city officials on finalizing design plans and permitted density for the development.
Forman Capital issued the current loan last year as a refinancing measure for an earlier mortgage.
Originally, Kodsi and former partner Rafael Pecchio planned to build a 200-unit apartment building on the site. After Pecchio left the partnership, Kodsi shifted focus last year to develop a condo-hotel with 360 units, some of which would allow short-term rentals.
Kodsi is also contesting another foreclosure related to his Legacy Hotel & Residences project at Miami Worldcenter. Recently, Judge Spencer Eig gave Kodsi’s entity approximately two months to repay over $35 million owed to Monarch Alternative Capital following Monarch’s July foreclosure filing regarding that partially constructed tower at 942 Northeast First Avenue in downtown Miami. Kodsi’s entity has filed a countersuit against Monarch.
This article reflects updates clarifying that Dan Kodsi is no longer involved with the North Miami Avenue project.
