UPDATED, Aug. 25, 4:05 p.m.: A stalled Miami River mixed-use project is getting restarted after Robert Zangrillo and Avra Jain landed new partners in a $21 million buyout deal.
Oklahoma-based Zerby Investments sold its 74.1 percent stake in the development site at 555 Northwest South River Drive to an entity managed by Zangrillo and Jain, as well as two affiliates separately managed by Los Angeles-based developer Zach Vella, and Miami Beach-based private equity firm Arc PE, records show.
The Zangrillo-Jain entity, which previously owned 25.9 percent of the five-parcel assemblage, now owns 33.3 percent of the site. Vella and Arc PE also each own 33.3 percent, the deed shows.
Vella, CEO of Vella Group who is also a partner in Zangrillo’s Magic City Innovation District master-planned community project in Little Haiti, is taking the lead on the Miami River development, Jain said via text.
Vella previously invested in the project through the Zangrillo-Jain entity, 555 SRD LLC, he told The Real Deal.
The site is approved for a mixed-use project with a hotel, an office building, retail and a marina, but the partnership hasn’t made a final decision on what uses the development will entail, Vella said.
The developers hope to break ground in the next nine to 12 months, he added.
In 2019, Zangrillo, Jain and Zerby announced they planned a Carlos Zapata-designed mixed-use project anchored by Miami’s first Sixty Hotel. The 12-story development would include 175 hotel rooms, 39 Sixty Hotels-branded condos and 140,000 square feet of office space.
However, the project didn’t move forward amid Zangrillo’s legal troubles. At the time, he was criminally charged with conspiring to bribe athletic officials at the University of California to designate his daughter as a recruit for the crew team. Zangrillo, along with actresses Felicity Huffman and Lori Loughlin, were among a group of wealthy parents accused of making payoffs to get their children into prestigious universities in Operation Varsity Blues, the largest-ever college admissions scandal in the U.S.
Zangrillo pleaded not guilty, and before standing trial, received a pardon on Jan. 20, 2021 from then-President Donald Trump in one of his last acts as commander-in-chief. But Zangrillo’s battles with the federal government were not over.
A year earlier, the Federal Trade Commission had slapped Zangrillo, his investment firm Dragon Capital and On Point Global, a company he co-owned, with a civil complaint. It alleged On Point ran scam websites that falsely advertised providing services, such as renewing a driver’s license, obtaining a fishing license or checking eligibility for Section 8 housing benefits.
Instead, customers only received a document of “general, publicly available information about the service the consumer sought for a fee,” the complaint states.
Amid the college admissions scandal and the FTC lawsuit, Zangrillo purportedly stepped away from taking an active role in the Magic City project — with Vella taking his place.
On Nov. 15 of last year, following a non-jury trial, Miami Federal Court Judge Robert Scola ruled that the websites did engage in acts to deceive consumers, but found that the FTC failed to establish “Zangrillo’s liability for deceptive acts and practices,” court records show.
Scola also hit Zangrillo’s co-owned On Point Global with $102 million in damages.