The companies seeking to redevelop the Berkman Plaza II property in Downtown Jacksonville are being sued by a group previously tied to the site.
That group is seeking $1.1 million in damages.
On July 27, Cambridge Capital Group LLC, along with A&T Development Company LLC, Tallahassee attorney Tim Howard and TTSM Inc. filed a complaint against 500 East Bay LLC and others in the 4th Judicial Circuit Court.
The complaint alleges breach of contract, unfair and deceptive trade practices, unjust enrichment and failing to agree to pay the plaintiffs $1.1 million for funds invested.
Also named in the suit are 500 East Bay LLC registered agent and developer Bob Ohde, his investment partner company MVJFL LLC, and the property’s previous owner, Choate Construction Co. of Atlanta.
Ohde’s group proposes to redevelop the site into a $150 million hotel and family entertainment center.
On Wednesday, the Downtown Investment Authority approved $36 million in city-backed financial incentives, allowing the project to seek City Council approval.
The crux of the lawsuit revolves around $1.1 million Cambridge and A&T Development claim is owed to them by the defendants for taking over the deal in 2018.
According to the suit, that includes $700,000 in funding from Howard, who is listed as the sole investor and majority owner’s representative of A&T Development Co., and $400,000 allegedly promised by Ohde in a Dec. 11 email to Howard, according to the complaint.
Howard said by email Thursday that he introduced Ohde to the project and that the Dec. 11 email clearly explains Ohde’s financial commitment for taking over the project.
In the December email, Ohde said in part that he was “very interested in this deal” but felt it was “running like a train wreck at the moment.”
He also wrote that he “would be willing to take over the contract from you and pay you back the money you have invested when I close on the property. I would also be willing to pay you an additional $400,000 when I close on the construction loan which I have a commitment on to close in 90 days after closing on the property.”
Howard said Thursday that he expects a reasonable resolution to the matter.
“We consider the parties to be honorable. We are looking to do the best for the City of Jacksonville,” he said. “This was the goal of our participation since last spring’s inspiration.”
Odhe said in a telephone interview Thursday that the claims are not legitimate.
“I can’t say much about this right now, but our counsel is working on a response,” Ohde said.
He said the Berkman II redevelopment will not be impacted by the suit.
“We’re trying to bring something great to Jacksonville and we’re going to do that,” he said.
According to the lawsuit, the $700,000 invested by Howard’s companies paid for initial funding along with appraisals, engineering, legal work, consulting and other site work ahead of a deal.
As reported, in 2014 Choate secured the land through a settlement in a lawsuit against the building’s previous owners.
The construction company was the lead contractor on what was supposed to be the second condominium project along Bay Street.
The project stopped after an attached parking garage collapsed, killing a 26-year-old construction worker and injuring several others.
Calls and emails to Choate were not immediately returned Thursday.
By 2017 the property remained untouched.
According to the complaint, Cambridge and A&T Development began negotiating that year with Choate and enlisted consulting firm TTSM Inc. to begin work on their behalf.
A July 20 letter from TTSM Inc. to Howard states that the firm spent “thousands of hours in calls and emails” working on the project.
In exchange, TTSM was to receive a fee of $180,000 “plus a 3 percent equity share in the existing property and profit on the completion of the development and retail holdings,” according to the letter.
Thamir Massraf, TTSM CEO, states in a letter that the appraisals and equity information was “unknowingly used by Ohde and his company to acquire funding for his own personal gain.”
Massraf was not available for comment Thursday.
The complaint said that by May 2017, Choate had a $5.5 million purchase and sale agreement with Cambridge, but by December the deal was reassigned to A&T Development.
In February, Howard wrote to Choate Construction Chief Administrative Officer Michael Hampton that A&T Development was assigning the agreement again.
This time it was assigned to Ohde and 500 East Bay LLC, which closed on the sale in July for $4.75 million, $700,000 less than the previous price.
The suit claims that Choate, Ohde and 500 East Bay LLC unfairly profited from the $700,000 price reduction, plus all the engineering, appraisal and due diligence performed by Cambridge and A&T Development.
Ohde is partnering with Barrington Development to pursue the mixed-use project.
Barrington Vice President Cono Caranna said the suit will have no impact on the Bay Street project.
“We consider this litigation to be a frivolous lawsuit, without merit and intend to have our counsel respond aggressively,” Caranna said through a statement.
The initial complaint listed Iguana Investments Florida LLC as a defendant and an amended complaint added Rimrock Devlin Development LLC and DeBartolo Development LLC.
Those three were dropped from an amended complaint filed Thursday.