Investors’ lawsuit claims Miami developer with ties to Mayor Suarez owes them $25 million

Two of the biggest investors in developer Rishi Kapoor’s company and real estate projects in South Florida have sued him, claiming he owes them $25 million under a contract agreement to buy out their interests that was signed at the end of last year.

The lawsuit claims Kapoor failed to pay the two investors in a series of scheduled equity payments this year. During this same time frame, the Miami Herald reported in May, corporate and public records show the developer’s company, Location Ventures, LLC, was paying Miami Mayor Francis Suarez $10,000 a month as a consultant on its mixed-use projects for services that included helping Kapoor cut through red tape at City Hall to obtain permits for a Coconut Grove development.

Both the FBI and Securities and Exchange Commission, along with the Miami-Dade State Attorney’s Office and county ethics investigators, have opened probes of Kapoor, his business and his consulting arrangement with Suarez, the Herald reported last month.

The new suit, filed in Miami-Dade Circuit Court last week, names Kapoor, the CEO of Coral Gables-based developer, Location Ventures, and another one of his companies, Patriots United, LLC, as defendants. Kapoor did not return an email seeking comment; his attorney, Brian Goodkind, said he had “no comment” and indicated that he would not speak to a Herald reporter on the phone.

The breach-of-contract suit, brought by three companies controlled by Diana Ulis, a trustee, and her husband, Alex Kleyner, a wealthy businessman, is only the latest legal claim against Kapoor and Location Ventures suggesting the development firm faces mounting financial problems.

The couple’s lawyer, Alan Kluger, declined to comment about the suit on Friday.

Kleyner, a New Yorker who heads a company called National Debt Relief, invested more than $45 million into Location Ventures and its South Florida real estate projects, starting in 2021, according to several sources familiar with the deal. But Kleyner and his wife, who both sit on the Location Ventures board of directors, eventually soured on Kapoor and started pressuring him to return their money. Last year, Kleyner and his wife were able to recover more than $20 million of their initial investment from Kapoor — thanks to a private lender that financed the payment to the couple by Location Ventures.

But, as the new suit says, the couple signed an agreement to sell their remaining $25 million equity interests to Kapoor. He and his company, Patriots United, failed to pay them, according to the lawsuit. The agreement, signed on Dec. 31, 2022, is included as an exhibit in the suit.

In their suit, the couple say Kapoor still owes them $8.5 million for their investment in Location Ventures and an additional $16.5 million for their equity in two of the development firm’s projects in Coral Gables and Fort Lauderdale.

There are other signs of strain in Kapoor’s company, according to public and court records and sources familiar with Location Ventures.

Other lawsuits, layoffs

Last week, sources said, Location Ventures downsized, with about 10 employees laid off and a handful of others deciding ti leave the company. The developer also has been unable to move forward on the construction of a few projects, including one in Miami Beach that was shut down by the city because it had not obtained building permits. A former chief financial officer of Location Ventures, Greg Brooks, also filed a court motion last week to collect $150,000 in back pay and other compensation from Location Ventures, saying Kapoor’s company violated a settlement agreement requiring the full payment by mid-June.

In the motion, Brooks’ lawyer Brian Pollock says he was told by an attorney for Location Ventures that the developer had not yet made the settlement payment “because it was having financial difficulties.” Pollock noted that Location Ventures has failed to fulfill its obligation to Brooks “despite lavish spending and portraying its successes in the public arena,” according to the court motion.

If Location Ventures fails to pay Brooks’ settlement amount, a Miami-Dade Circuit judge could enforce it — but, ultimately, the former executive may have to pursue his claim as a potential creditor if the Location Ventures were to file for bankruptcy, according to legal experts.

Separately, court records in another lawsuit brought last December by a group of minority investors against Kapoor and one of his companies show that, to avoid foreclosure on its Coconut Grove project, Kapoor obtained extensions on two loans that cost $150,000 in extra fees to one lender and about $132,000 to another lender.

The minority group also complained in the suit that Kapoor obtained a $16 million loan for the Grove project without consulting them about taking on such substantial debt, as required by the operating agreement. The investors suing Kapoor are seeking his removal as “manager” of the Grove project, which is being developed by Location Ventures’ URBIN subsidiary, and millions of dollars in damages. The developer has denied the investors’ allegations.

Kapoor, a 39-year-old University of Miami graduate, founded Location Ventures in 2016 and owns a waterfront home in Coral Gables. He started making a name for himself by attracting wealthy people to invest more than $100 million in his company’s projects — including a signature development, Villa Valencia, a 10-story luxury condo building in Coral Gables. Kapoor, corporate records show, now holds about 25% of Location Ventures’ ownership. About 60 investors — including Ulis and Kleyner — either own a stake in Location Ventures or in individual projects, according to corporate records

Kapoor, portrayed as a rising star in real estate publications, is still developing projects in Miami Beach, Fort Lauderdale and elsewhere., according to sources familiar with his company.

The Herald reported in May that Kapoor’s company had paid Suarez at least $170,000 since September 2021, and that the firm’s records showed that the mayor and his office had assisted Kapoor in obtaining critical permits for the $70 million mixed-used residential and commercial project in Coconut Grove last year.

Suarez, who launched a bid for the GOP nomination for president last month, told the Herald that he was raising investment capital for Location Venures and its URBIN division, which has been developing three projects in Coconut Grove, Miami Beach and Coral Gables.

Suarez, a lawyer now in his second term as mayor, did not report his side income from Location Ventures on a financial disclosure form in 2022 and 2023, citing a loophole that didn’t require him to do so because the payments represented less than five percent of his total earnings in those years.

But Kapoor, Location Ventures’ CEO, said that Suarez’s role was providing marketing and “programming” services, offering ideas on the mix of retail stores and restaurants at URBIN’s projects in Miami-Dade County.