Chetrit’s lender alleges company stole $ 2 million insurance payment

Joseph Chetrit with the Tides Hotel (Getty, Tides via Facebook)

The Chetrit Group’s new lender alleges the New York real estate company stole $ 2 million in insurance money related to damage to the long-shuttered Tides South Beach hotel, court documents show.

The latest allegations are part of a $ 45 million foreclosure lawsuit filed earlier this year by Safe Harbor Equity affiliate SHEDDF3 VNB LLC against CG Tides and other companies related to the Chetrit Group for the loan backing the hotel 11 story building located at 1220 Ocean Drive.

Ocean Bank provided the financing in 2014, and the loan principal was due in December, according to the original complaint. Ocean Bank sold the debt to subsidiary Safe Harbor Equity in January. The loan is backed by the Art Deco hotel on Ocean Drive, as well as a mixed-use building overlooking Collins Avenue that Chetrit has redeveloped.

Safe Harbor alleges that Chetrit defaulted on his loan when he pocketed the insurance check without the lender’s knowledge or consent. Safe Harbor alleges that the default on the loan triggered Chetrit’s contractual obligation to pay interest from that date.

Joseph Chetrit, founding partner of the family business, did not immediately respond to a request for comment. Safe Harbor declined to comment.

The Chetrit entity filed a motion for partial summary judgment in March, based on its argument that it had not defaulted on the loan. “Safe Harbor cannot claim default interest on the basis of this non-existent default,” CG Tides alleges.

In May, in response to Chetrit’s petition, the Safe Harbor entity declared that the proceeds from Hurricane Irma damage insurance belonged to Ocean Bank, and that by keeping the check without the approval of Ocean Bank, the subsidiary of Chetrit would have committed a great theft.

“Although the Tides defendants claim to have informed Ocean Bank of their receipt of” the insurance payment of $ 2 million, “there is no competent evidence to support this claim and there is ample evidence to refute it,” according to the complaint.

Court records show that Tides’ defendants alleged that Joseph Chetrit informed Ralph Gonzalez-Jacobo, then Ocean Bank’s loan manager, of the insurance check. Gonzalez-Jacobo died at the end of 2019, according to his obituary.

The Safe Harbor subsidiary also alleges that the borrower “both ignored requests for updates from Ocean Bank” and “falsely stated that the insurance proceeds had not been received.”

Emails attached as file attachments also show that Chetrit’s ownership allowed insurance coverage to expire at the start of the hurricane season last year.

“There is currently no property coverage in place for Tides Hotel, Tides Village or Tides Garage,” read an email from an assistant vice president of Alliant Insurance Services, and, later, “l ‘Insured informed that he did not plan to tie the blanket. “

The hearing on the summary judgment motion is set for July 21.

Also in South Florida, Chetrit blocked a major mixed-use development he was planning along the Miami River. This project, valued at $ 1 billion, was to include approximately 1,700 residential units, 330 hotel rooms, 266,000 square feet of retail and office space and more than 2,000 parking spaces.

Chetrit owns the closed Miami Beach Resort, an oceanfront hotel at 4833 Collins Avenue, as well as a project under construction at Collins Park in Miami Beach. In May, Chetrit Group secured a $ 62.5 million construction loan for the Collins Park project.

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