Cottonwood Group filed a foreclosure lawsuit against affiliates of Michael Stern’s JDS Development Group on Apr. 6, following its recent acquisition of the loan for the Mercedes-Benz Places condominium project in Miami.
The legal action centers on an $85 million loan originally provided by Maxim Credit Group in July 2015. According to records from Vizzda, Maxim extended the maturity date several times before the final deadline passed in January 2025. Cottonwood’s affiliate, CWRE SSF Flamingo Capital, alleges that JDS defaulted when it failed to repay the outstanding balance by that date and subsequently took over the loan on March 24.
The debt is secured by property at several addresses along Southwest 12th Street, including Southside Park. Construction began last year on Mercedes-Benz Places, a planned two-tower development with about 800 units. The developer had previously engaged broker Ryan Serhant’s firm for sales and marketing and opened a sales center early last year.
According to court filings, Cottonwood claims nearly $100 million is owed—$80.4 million in principal and almost $20 million in interest—with additional daily interest accruing after March 30 at over $53,000 per day. In response to the suit, JDS said: “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.”
A source told The Real Deal that JDS is working on closing new financing totaling $750 million—including senior loans, mezzanine financing, C-PACE funding, and preferred equity—to replace existing bridge financing. Meanwhile, multiple subcontractors have reportedly filed liens alleging unpaid work at the site.
Mercedes-Benz Places was designed by ShOP Architects with amenities such as restaurants, pools facing sunrise and sunset views, health facilities, and a hotel component with more than 170 rooms. Sales launched last year with prices starting at $500,000 per unit.
JDS received city approval for construction in 2020 after agreeing to provide public benefits including an $8 million firehouse for Miami and improvements worth $5 million for Southside Park nearby.
Elsewhere in South Florida, JDS has announced other projects such as Dolce & Gabbana-branded condos at Brickell Avenue—marketed by One Sotheby’s International Realty—and another luxury tower planned for West Avenue led by Terra’s David Martin next to Monad Terrace. Separately Stern remains involved in litigation with partner Gianluca Vacchi regarding alleged fraud connected to investment activities tied to properties including Casablanca condo-hotel.
