947 Lincoln Road, Michael Comras and 940 Lincoln Road
Litigation blocking the multimillion-dollar sale of two properties on Lincoln Road could be nearing an end after a judge ruled in favor of the owner, Leon Zwick, in a three-year dispute with Michael Comras and his partners the Cayre family of New York. Yet, Comras and Cayre vow to appeal the judge’s decision, according to their attorney.
At issue are two buildings at 940 Lincoln Road and 947 Lincoln Road in Miami Beach, which Zwick and his late brother bought in 1984 and 1986. Current tenants include Finnegan’s and the Frieze Ice Cream Factory.
In October 2012, Zwick entered into a deal to sell 940 Lincoln and 947 Lincoln to an entity managed by Comras and the Cayre family — including Robert Cayre and his uncle Harry Adjami — according to legal documents.
Soaring property values on Lincoln Road
Just up the street this September, Comras and his partner Jonathan Fryd sold the entire block from 1001 to 1035 Lincoln Road to Spanish billionaire Amancio Ortega for $370 million, or $7,708 per square foot for the land and $4,933 per square foot for the buildings. The transaction marked one of the largest real estate deals in Miami-Dade history.
In the 2012 Comras and Cayre deal, the property at 947 Lincoln was to sell for $25 million and 940 Lincoln for $61 million, according to a 96-page deposition from Comras. That equates to about $3,822 per square foot for the land and an average of $1,911 per square foot for the buildings.
Miami-Dade property records show that back in the mid-’80s, the Zwick entity had paid $301,000 for 947 Lincoln Road and $585,000 for 940 Lincoln Road. The buildings, with 8,625 square feet and 36,377 square feet, were built in 1925 and 1926, respectively.
Deal to sell is derailed
On Dec. 19, 2012, nine days before the scheduled closing, Zwick’s sister, Bella Miller, sued both sides involved in the deal in an attempt to prevent the sale from closing, legal filings show. The notice of lis pendens claimed she had a right to the ownership of both properties.
At the same time, Comras and Cayre were becoming concerned that the seller was not complying with pre-closing obligations to remove existing tenants from the building, legal documents show.
On Dec. 28, 2012, the buyers exercised their right to terminate the contract and requested the return of deposits. Their attorney, Todd Legon, partner in Legon Fodiman, said they had been told that the seller could not go forward with the sale because of the sister’s suit, and that Zwick would re-enter into a contract once that issue was resolved. “It was an oral promise that they said we will redo the contracts,” Legon told The Real Deal. Zwick’s attorney Michael Schlesinger said his client disputes that allegation.
Zwick agreed to the cancellation, and Comras and his partners received their deposits back: $5.5 million for 940 Lincoln and $2.3 million for 947 Lincoln, said Schlesinger, of Schlesinger & Associates, who is co-counsel along with William Davis of Foley & Lardner.
New buyer emerges
Zwick then entered into a separate contract to sell 947 Lincoln to the Richard Chera family, also of New York, Schlesinger said.
The deal was signed the day after the termination, but email correspondence shows it was arranged while Comras and Cayre’s deal was still pending and before it was terminated, in violation of exclusivity and “no shop” provisions, Legon said.
According to Schlesinger, Comras and Cayre were upset with the pending sale, and sued Zwick in February 2013 in three different complaints. One stated that Zwick asked them to cancel and gave them an oral extension to buy the property for the same price in the future. Another said they had an option of first refusal to buy the property. And the third said they were fraudulently induced to cancel.
“We did not seek to enforce an oral promise,” Legon said. “What we were saying is that we were fraudulently induced to terminate the contracts.”
New deal in flux
Schlesinger told TRD that Chera is under contract with Zwick for 947, but “we can’t close until the case closes.” He declined to disclose the sale price. “We can’t transfer title. All the litigation is holding up the sale of the building.”
Zwick moved for summary judgment, and last month, Miami-Dade Circuit Court judge Migna Sanchez-Llorens granted it, except for one count of breach of contract. She also dissolved Zwick’s sister’s lis pendens, which had been dismissed in November 2013 for lack of merit, and was affirmed on appeal.
The next chapter
“Now 947 is close to being sold to Chera, and 940 is closer to being free so Zwick can do what he wants with it,” Schlesinger told TRD. “They used the legal system to hold these buildings hostage for three years.”
Yet Legon said Comras and Cayre will “definitely” appeal.
“We’re disappointed with the court’s ruling, but this case is far from over. We have substantial damages claims for breach of contract that we intend to vigorously pursue,” Legon said, declining to provide a figure, “in addition to our appellate rights.”
Source: The Real Deal