Miami condo association sues developer over shuttered robotic parking garage on Brickell
South Florida Business Journal
Brian Bandell—Senior Reporter
15 April 2016

The condominium association for Miami’s BrickellHouse filed a lawsuit against its developer over a robotic parking garage that has been shut down, leaving residents with great difficulty parking their cars in the crowded city.

The residents have demanded that the developer spend potentially millions of dollars repairing it or building them a new parking system.

The BrickellHouse Condominium Association sued developer Harvey Hernandez over its shuttered robotic parking system.

The buyers in the 374-unit building were promised South Florida’s first fully automated parking system, which would whisk their cars into and out of a parking garage without them inside their vehicles. It was supposed to maximize the space in its parking garage and make parking faster.

The lawsuit filed by the association claims that the automated parking system operated too slowly, sometimes taking over two hours to retrieve cars. It required constant staff supervision to work properly and the robots would often stall and malfunction, the lawsuit said.

BrickellHouse Holdings LLC and principal Harvey Hernandez, head of Newgard Development Group, turned over the association to the building’s residents/members in September 2015. Since then, residents have lost access to the robotic parking system created by Boomerang Systems. This was the first such machine the company had built.

Newgard Development Group is headquartered in the building. The problems at BrickellHouse come as the company is working to complete several other South Florida condo projects, including Centro and Gale Residences Fort Lauderdale Beach.

"Newgard Development Group is working diligently with the condominium association of Brickellhouse, which now owns and controls all aspects of building management, including the parking garage, to help bring a resolution to the unfortunate matter pertaining the building’s robotic parking garage,” Newgard Development Group and Hernandez said in a statement. "As developers and owners ourselves in the building, those who purchased a unit at BrickellHouse have our assurance that we have [gone], and will continue to go, the extra mile to help arrive at a viable resolution.”

Boomerang Systems filed Chapter 11 reorganization in August and shut off access to the BrickellHouse garage Nov. 4, claiming that it was losing money on the maintenance contract. The company claimed the system was more expensive to operate than it had anticipated.

In January, a bankruptcy judge terminated Boomerang Systems’ contract with the condo association, leaving it unclear who would operate the robotic parking garage. Residents have been forced to use valet service or pay for spaces in nearby garages.

On Jan. 21, the BrickellHouse Condominium Association filed a lawsuit in Miami-Dade County Circuit Court against BrickellHouse Holdings and Hernandez. The complaint was amended March 9 to add more counts. Among the counts are breaching the warranty under the Condominium Act, self-dealing in violation of the Condominium Act, breach of fiduciary duty to the condo association, and Hernandez's failure to make good on his promises to pay for alternative parking at the building.

The developer has yet to file an official answer in court.

"Discovery will confirm that the developer and Mr. Hernandez acted in the best interest of the association, and that they continue to do so,” said attorney Jenelle E. La Chuisa, who represents Hernandez. "There is no factual basis for any of the association’s claims.”

La Chuisa said Hernandez arranged for a company called Keep Right LLC to restore operations to the BrickellHouse garage and make about 100 spaces available by May 1 at the developer’s expense. The association did not respond to this offer, she said.

The lawsuit allege that the relationship between Hernandez and Boomerang Systems went beyond a typical developer and vendor. Parking Source LLC, a company managed by Hernandez, provided about 63 percent of Boomerang Systems’ initial funding and owned 7.1 percent of its stock. Boomerang Systems filed a lawsuit against Parking Source and Hernandez in 2015 for allegedly refusing to advance it more financing, which threatened to halt its operations. That lawsuit was stayed by Boomerang's Chapter 11 filing.

Because of that close financial relationship, Hernandez was well aware of Boomerang Systems’ problems and the flaws with its parking robot before he turned over BrickellHouse’s association to its residents, the association lawsuit said.

“Not only did the defendants know as early as December 24, 2014, that Boomerang’s operations would cease and that Boomerang’s bankruptcy was imminent, but the defendants also knew, well prior to turnover of the association to its members, that they had failed to procure the supply bond, failed to require the ST [software and technology] Escrow Agreement, failed to provide any contingency for the robotic garage whatsoever – leaving the association and its members without any parking alternatives for the 480 vehicles the defendants promised to provide to the association and its members in the congested, metropolitan city of Brickell,” the lawsuit said.

The lawsuit said that when Hernandez and BrickellHouse Holdings controlled the association, they should have budgeted and funded a fix for the parking system. When the developer turned over the association to the residents without doing so, that was a breach of the Condominium Act because parking is a vital function for the building, said attorney Helio De La Torre, who represents the association.

Attorney Lindsey Fallon Thurswell Lehr, who also represents the association, said that each condo buyer was promised one parking space, and some buyers paid extra for a second space.

“We are asking for damages that we’ve suffered already, and the damages that we will be forced to incur to repair or replace the system,” De La Torre said. “The association is in the process of investigating options, and they haven’t really made a final decision yet. The cost is very significant. It’s millions of dollars."

The association lawsuit also claims that Hernandez largely didn’t follow through on his promises in an email and in a town hall meeting with residents to pay the association’s expenses for alternative parking. The lawsuit said he owes $136,791 for these expenses.

"The association sought a carte blanche agreement from the developer to pay for parking expenses without any limits,” La Chuisa said. "Although no agreement was entered into as a result, the developer paid for at least one month’s parking expenses, and continues to focus their efforts on reopening the garage."

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