More legal woes for Location Ventures. A lender is seeking to foreclose on the firm’s co-living development site in Miami Beach for nonpayment of a $14.8 million mortgage debt.
On July 21, an affiliate of Coral Gables-based Spectrum Mortgage Group sued a Location Ventures entity that owns two commercial parcels at 1234 and 1260 Washington Avenue. In addition to the alleged unpaid loan, 1234 Washington Acquisitions is seeking roughly $505,000 in interest. Also named as defendants are a mezzanine lender and contractors that have filed liens against the property for alleged non-payment.
The mortgage, the complaint states, was personally guaranteed by Rishi Kapoor, the embattled founder of Location Ventures who stepped down as company CEO last week. Kapoor is being investigated by the Miami-Dade ethics commission and state attorney’s office for his role in giving a $10,000 a monthly side gig to Miami Mayor Francis Suarez. The FBI and the Securities and Exchange Commission are also separately investigating Kapoor’s tenure at Location Ventures.
Jason Alderman, the lawyer for the Spectrum affiliate, declined comment. Alan Fine, a retired Miami-Dade Circuit Court judge who recently took over management of Location Ventures, said the company is formulating a plan to sell its assets, and pay off its creditors without having to seek bankruptcy protection.
According to the Spectrum affiliate’s lawsuit, it acquired the mortgage from another lender that provided the Location Ventures entity with $14 million in financing to purchase the properties at 1234 and 1260 Washington Avenue, which were acquired for $20 million in 2021.
The firm began work on a proposed six story building with 69 co-living condos and 20,000 square feet of co-working space. Last month, city of Miami Beach building officials issued a stop work order because Location Ventures had failed to obtain permits to begin construction.
In June of last year, the Location Ventures entity increased the loan to $14.8 million. The Spectrum affiliate recently acquired the loan.
The developer failed to repay the mortgage by its maturity date last month, the lawsuit states. Location Ventures is also in default because the city of Miami Beach and six companies filed liens against the two properties totalling more than $1 million, the complaint alleges.
Since the beginning of the year, Location Ventures and several affiliates have been hit with five lawsuits by vendors, investors and the company’s former CFO, Greg Brooks. In one of the more recent complaints, its partners Diana Ulis and Alex Kleyner are seeking to recoup $25 million of $45 million they invested in the company and two co-living projects.