How a developer pushing a luxury Coral Gables high rise became a tenant of the mayor

A developer who hired Miami’s mayor as a $10,000-a-month consultant has also paid tens of thousands of dollars in rent for a storefront owned in part by the mayor of Coral Gables while pushing for city approvals to build a luxury high-rise across the street.

Starting last summer, developer Rishi Kapoor began leasing a former martial arts studio on Ponce de Leon Boulevard from a small group of investors that included Coral Gables Mayor Vince Lago.

The mayor’s group closed on the property, located at 1424 Ponce, in May of last year. Within weeks Kapoor was renting the space, with plans to convert it into a sales center showroom for his proposed 16-story condo project on the other side of the boulevard, at 1505 Ponce.

The landlord-tenant relationship, which Lago publicly disclosed before recusing himself from several crucial votes on the project, received little attention last year.

But mortgage documents, campaign finance reports and a new financial disclosure filed last week by Lago after the Herald began asking questions detail a flurry of activity and connections between the mayor and the developer as Kapoor’s firm Location Ventures sought city approval last year for the 1505 Ponce project.

The new details are emerging following the Miami Herald’s reporting that, at the same time Kapoor was leasing from Lago, he was also contracting privately with Miami Mayor Francis Suarez and pursuing a development project in Coconut Grove — circumstances that have ethics investigators looking into Suarez’s arrangement with a Location Ventures subsidiary.

Lago, whose salary as mayor is about $45,000, lists construction and commercial real estate as his primary sources of income. He said he and his partners leased the vacant martial arts studio to Kapoor after they were “approached by several potential tenants” about their newly purchased retail property.

“After vetting all interested parties,” Lago said in a written statement, “the decision was done to lease to Mr. Kapoor.”

Though the developer moved quickly to lease the storefront, the retail property remains empty today, nearly one year later. The 1505 Ponce project has yet to break ground.

Lago, who says he owns 40% of the company that purchased the retail building, declined to say whether he’d spoken with the developer or city officials about the 1505 Ponce condo tower project. He stressed that he recused himself from votes pertaining to Kapoor’s project in June, July, October and December. “I am a businessman and I look for business opportunities that do not conflict with my duties as Mayor,” Lago said.

Brian Goodkind, an attorney for Location Ventures, described the rental agreement as a “market rate lease for a location that was in demand.”

“Location Ventures sought the location as a sales center because it is directly across from (and the closest available space to) the Location Ventures project planned for 1505 Ponce de Leon Boulevard,” Goodkind wrote in an email statement. “It is typical for condo developers to secure space for a sales center as close as possible to the planned project.”

Sources familiar with the matter tell the Herald that Kapoor’s firm first made a payment of about $15,600 for the space in June of last year, followed by monthly rental payments of about $12,410.

Bob Jarvis, a Nova Southeastern University law professor specializing in ethics, said the mayor’s decision to establish a financial relationship with a developer who was seeking city approvals to turn a profit created a conflict of interest.

“Politicians should never be lining their pockets on deals where they have better information than the public, even if there’s nothing wrong or illegal. I just think the optics look terrible,” Jarvis said. “It puts you in a very dicey position as a public servant.”

Lago acknowledged the potential for a conflict last summer when he abstained from voting on Kapoor’s condo tower project. But he said during a brief interview outside his City Hall office that his decision to invest in the retail building was unrelated to Kapoor’s development across the street.

“Am I not allowed to buy real estate?” Lago asked.

Political connections

Lago said he has known Kapoor “for years.” The extent of their relationship is unclear, but Lago has attended Location Ventures’ promotional events, is connected to the brokerage that took credit for the sale of the 1505 Ponce property and is close with Mayor Suarez, who also has a financial relationship with Kapoor.

Kapoor, a Coral Gables homeowner who recently purchased the Cocoplum Yacht Club, hosted Lago at Location Ventures’ 2019 groundbreaking for Villa Valencia, a luxury project in the city. The two were photographed together again at the project’s “topping off” ceremony in 2021.

Lago is also a childhood friend of Francis Suarez, who was called on last year to help Kapoor resolve permitting issues for a project in Coconut Grove while quietly working as a consultant for Kapoor’s company URBIN, according to internal Location Ventures records.

Both Suarez and Kapoor have denied that the mayor’s consulting job had anything to do with City Hall. Kapoor said Suarez provided “feedback on programming and the greater mission of the brand to bring new housing opportunities to urban markets” in Miami-Dade and beyond. Suarez’s spokesperson said he did not lobby for the developer, but rather “provided and participated in capital introductions and pitches as well as other forms of business development related to raising capital.”

Suarez’s cousin and 2013 mayoral campaign manager, Esteban “Steve” Suarez, is among four investors named on the mortgage for the 1424 Ponce property that Kapoor is leasing, Lago confirmed.

Additionally, Lago’s real estate license is registered with the brokerage that took credit for closing on Kapoor’s $35.5 million purchase of the 1505 Ponce project. Lago denied any involvement with the sale. “I am a licensed and registered real estate agent in Florida, and as such, I am required to work under a licensed broker’s umbrella,” he said in a written statement.

The brokerage firm, Rosa Commercial Real Estate, is owned by former Hialeah Councilman Oscar De La Rosa. According to state records, six people total have their real estate licenses registered with Rosa Commercial Real Estate, including Lago’s chief of staff and also Hialeah Mayor Esteban “Steve” Bovo, who is De La Rosa’s stepfather.

Meanwhile, Kapoor is one of Lago’s campaign donors. His development company gave Lago $9,000 when he first ran for mayor in 2021.

Then on May 18 of last year — as Lago kicked off his reelection campaign — Lago’s PAC, Coral Gables First, reported a $10,000 donation from Location Ventures.

About a week later, Lago and his partners purchased two properties from City National Bank: the retail building at 1424 Ponce, and the 5,500-square-foot vacant lot behind it. Shortly thereafter, Kapoor began renting the former martial arts studio.

Lago, who was reelected without opposition in February, omitted his ownership of the investment properties on the financial disclosure form he was required to submit earlier this year when he filed paperwork to be a candidate.

After the Miami Herald began asking questions about his investments last week, Lago filed an updated financial disclosure form saying he has a 40% stake in the two corporations listed as the property owners in public records, 1424 Ponce LLC and 211 Menores LLC.

The Ponce Properties

On May 25 of 2022, the sale closed for the 1424 Ponce property, according to county property records. Mortgage documents from the sale list Lago as one of the borrowers for a $1.82 million loan. Steve Suarez and two other partners also mentioned on the mortgage did not respond to the Herald’s requests for comment.

Meanwhile, through a limited liability corporation called Location Acquisitions, Kapoor was seeking City Hall approval for the 1505 Ponce project across the street from Lago’s new real estate investment.

The developer applied in early 2022 for zoning and land-use changes, and other privileges that required City Commission approval to develop the project. The application estimated a $100 million price tag to complete the luxury tower with 80 condo units, including four penthouses, as well as a pool deck and over 10,000 square feet of retail space.

On May 5 of last year, the city’s Board of Architects approved the project’s design. Weeks later on May 23, Kapoor, along with the project’s lobbyist and architects, hosted a neighborhood meeting to discuss the project with residents.

According to the meeting minutes, Kapoor predicted that the clientele would hail from the Gables, the Grove and Miami Beach, and as far away as California and Illinois.

The 1505 Ponce project went before the City Commission on June 28 and again on July 25, when the commission approved the development by a 4-0 margin, with Lago abstaining from the vote.

It would be another four months before Kapoor purchased the property, as he waited for the city to allow for the transfer of development rights from neighboring properties so he could build the project as designed. The sale for 1505 Ponce closed on November 29, according to county property records.

Lago confirmed late last month that Kapoor is “still my tenant,” but declined to discuss the length of the agreement. He said the 1424 Ponce property has a triple net lease, which means the tenant agrees to pay for expenses like property taxes, insurance and maintenance.

The 1424 Ponce property, which is divided into three separate storefronts, remains largely untouched. Employees of neighboring businesses said they rarely, if ever, see people going in and out. The city received an application for an exterior remodel of the existing facade and demolition of the building’s interior late last year, and it issued a permit for the work in April, according to permitting records.

Kapoor hasn’t broken ground yet on the 1505 Ponce project. As a contingency for approval, the developer agreed to open a temporary dog park — the city’s first — on the property prior to construction.

Earlier this year, Lago attended the ribbon-cutting ceremony, where he posed for photos alongside two city commissioners and two Location Ventures employees. In an Instagram post, the mayor celebrated the park’s opening.

“Located at 1505 Ponce de Leon Blvd, the city welcomes all including our furry friends to enjoy the new temporary space which will be fully programmed once the neighboring project is complete,” Lago wrote in the Feb. 22 post. “We hope to see you there.”