'It Was a War Zone': Landlord Seeks $6.5M for Hollywood Office Damage

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This photo shows the water damage at the office building at 4601 Sheridan St. in Hollywood.[/caption] A Hollywood landlord claims he's owed $6.5 million by a contractor that installed a new facade but left the offices exposed to rain, forcing out luxury brand Louis Vuitton and other tenants. The renovation work at the six-story building is complete, and new tenants have moved in, but the legal battle between owner GRE Properties Sheridan Hills LLC and Doral-based Burke Construction Group Inc. is ongoing. A trial is set to start after Nov. 1. GRE hired Burke to build a more modern outer shell for a maximum $6.6 million with the tenants staying in place at 4601 Sheridan St., according to the December 2013 contract. Burke agreed to protect the interior from, among other things, rain with a temporary wall but instead used tarps, polyvinyl sheeting and other plastic sheeting which failed to protect the building, according to the 2015 complaint and GRE attorney Etan Mark, a partner at Mark Migdal & Hayden in Miami. The lawsuit claimed rain poured in and soaked the ceilings, which tumbled down. "Literally they'd be sitting at their desks and water would start pouring in on top of their computers. The ceiling would collapse ... because it would get saturated with water. It was a war zone," Mark said. In pretrial work, "the question was why didn't one of these tenants stay through the construction. Her response was because she couldn't grow gills." Bank of America, a ground-floor tenant, left the 70,024-square-foot building. Other departing tenants were the Law Offices of Alex T. Barak, accounting firm Sheldon D. Dagen and the Law Offices of Gilbert & Smallman, according to Mark. "Louis Vuitton, they had a beautiful space that got completely destroyed," he said. He filed the complaint when he was with Berger Singerman in Miami along with partners Michael Higer and Gina Clausen Lozier. Mark took the case with him when he co-founded Mark Migdal. The complaint lists negligence, breach of contract and breach of implied warranty counts. Rembold Hirschman partners Kimberly Hirschman and Scott Rembold represent Burke. The attorneys and Burke didn't return requests for comment. In court filings, Burke denied failing to install protection and argued GRE didn't notify tenants about the planned construction. The alleged water damage could have been caused by existing building problems like cracks and loose joints, and GRE and other contractors were to blame for some of the problems, according to an April 27, 2016, filing. In a motion for partial summary judgment filed Jan. 23, Burke also argued GRE's property insurance covers water damage, precluding the landlord from seeking these damages from Burke. Burke also sued subcontractors Deerfield Beach-based Crawford-Tracey Corp., which installed windows; Fort Lauderdale-based D&D Welding & Fabrication LLC, which installed metal framing; Sunrise-based Riteway Systems Inc., which did demolition work; and US Shrink Wrap Inc., which installed protective shrink wrap and caulk. IF the subcontractors are at fault, Burke said they should be held liable under the hold harmless and indemnity protections in their contracts, according to the Nov. 23, 2015, complaint. Crawford-Tracey's attorneys at Kubicki Draper declined comment. D&D Welding, Riteway and US Shrink Wrap attorneys didn't issue comment. At trial, GRE plans to seek more than $6.5 million, which includes water damage to the building, loss of rent, attorney fees and a $1,000-a-day fee charged for each day Burke hadn't completed construction. While Burke finished the job in 2015, which was later than agreed, it still hadn't obtained a certificate of completion, prompting the daily fee, Mark said. After the facade was done, the drywall, carpeting and other interior had to be replaced. GRE, which is registered to Matan Ben-Aviv and Zipora Ben-Aviv, has been signing new tenants since then, including a 6,400-square-foot lease to Coastal Community Bank and a 2,800-square-foot lease for probiotics cleaning products company Airbiotics Inc. "I think it's a fairly common theme in this market for general contractors to make a whole bunch of promises and not keep those promises," Mark said.