Cottonwood Group filed a foreclosure lawsuit against affiliates of Michael Stern’s JDS Development Group on Apr. 6, days after taking over the loan backing the Mercedes-Benz Places condominium project in Miami.
The legal action follows JDS’ alleged default on an $85 million loan originally provided by Maxim Credit Group in July 2015. According to records from Vizzda, the maturity date for this loan was extended several times before ultimately expiring in January 2025. Cottonwood, through its affiliate CWRE SSF Flamingo Capital, assumed control of the debt on March 24 and claims that nearly $100 million is now owed—including a principal balance of $80.4 million and almost $20 million in interest—with daily interest accruing at more than $53,000 since March 30.
The disputed financing is secured by properties at Southwest 12th Street and includes Southside Park. Construction began last year on Mercedes-Benz Places, an 800-unit development with two towers designed by ShOP Architects. The project launched sales in early 2024 with prices starting at $500,000 per unit and plans for over 130,000 square feet of amenities such as restaurants, fitness centers, pools, and a hotel with more than 170 rooms.
JDS said it is working to finalize new construction financing that would replace the current bridge loan. “We are aware of the action recently filed by a bridge lender related to a routine loan maturity, and are in active discussions with them to reach an amicable and swift resolution,” JDS’ statement reads.
A source told The Real Deal that this new package may total $750 million across various forms including senior loans and preferred equity. Meanwhile, court filings indicate several subcontractors have placed liens alleging unpaid work at the site.
JDS previously agreed to provide public benefits for city approval of Mercedes-Benz Places—specifically building an $8 million firehouse for Miami along with other improvements valued at about $5 million near Southside Park. In addition to this development, JDS has projects planned or underway elsewhere in South Florida including Dolce & Gabbana-branded condos on Brickell Avenue and luxury units near Monad Terrace in Miami Beach.
Stern is also involved in ongoing litigation with Gianluca Vacchi’s GV Development concerning allegations related to another Miami Beach property investment.
