Coral Gables Country Club is open for business as city "seizure" goes to court

The historic Coral Gables Country Club is open for business as usual. For now, anyway.

While the contents may have been “seized” Wednesday by a strange middle-of-the-night court order in the midst of a dispute between the city and the operators, there are fundraisers and birthday parties and galas planned through the end of the month. There was a wedding there Saturday with 335 guests.

The Coral Gables Athletic Club is open for workouts and you can even get a coffee or a gelato at the Liberty Caffé.

It’s almost as if nothing happened. As if Miami-Dade Police didn’t show up out of the blue Wednesday morning to kick the operators off the property and seize their equipment, furniture, documents, computers, inventory — everything. As if the city hadn’t gotten some secret court order in the middle of the night, to appoint a “receiver” — purportedly an unbiased, neutral third party assigned to “protect” assets — after inferring that the operators wanted to strip the place clean. As if the city hadn’t ordered 24/7 police presence — later cancelled — to stop them from doing just that.

Coral Grand and and the Di Donato family are still running things until the end of April, which is the agreement they reached with the city last year after the city chose not to renew their lease.

The only difference now is that they have a babysitter: Attorney Joel Brown has been tasked by Miami-Dade Circuit Court Judge Carlos Lopez to safeguard the city’s historic property while everyone determines what belongs to the public and what belongs to the operators. We think.

Because the order from the judge, provided to Ladra by the city, is not found online on the Miami-Dade clerk’s website. It doesn’t have the judge’s name and information printed on it, just his illegible signature. It doesn’t have the names of a gazillion attorneys under “copies furnished to,” it just says “counsel of record.” There’s no time stamp. It doesn’t look like any other court order.

The Di Donato’s attorney, David Winker, says he has asked for an official order from the court without success and has filed motions to dissolve it and make any actions by the receiver moot. “This order has not been submitted to the court. I dispute its validity,” he told Ladra.

He was a little more dramatic in his motion to reverse the receivership, which quotes Karl Marx on the theory of the communism being summed up by the abolition of private property.

“In almost thirty years of practice, I have never seen such a blatant attempt to misuse the Court as Plaintiff’s corrupt effort to steal Defendant’s private property,” Winker wrote. “American citizens do not normally have to be worried about government officials obtaining secret orders in the middle of the night to seize their private property.”

There is a hearing at 1 p.m. Thursday.

Meanwhile, the court order puts the Coral Gables Country Club and all its contents, as well as bank accounts and computer records, in the possession of the receiver — but the Di Donatos are still running things. After all, there’s an event for St. Stephen’s Episcopal Day School on Tuesday, a wedding rehearsal on Thursday, a graduation with 180 guests on Friday and a little girl’s 2nd birthday party with 35 guests.

City Manager Peter Iglesias did not return calls from Ladra. The city issued a statement on his behalf.

“To protect a valuable and historic city asset, the Coral Gables Country Club the city petitioned, and a Judge granted an emergency injunction appointing Joel H. Brown, Esq. as receiver on April 12. This helps insure a smooth transition of operations from the current operator.
Additionally, a receiver was necessary because the current operators have stated that they will remove many items that are part of this facility not only causing considerable damage to this historic building but delaying the re-start of operations. In fact, yesterday when Coral Grand management was asked to vacate the premises, they attempted to remove the computer server and other items in the presence of the receiver.
The city is committed to working cooperatively with the receiver as he operates the club and safeguards the interests of all Coral Gables residents.
It is important that Fitness Club members and entities and/or people that have scheduled events at the club this month should rest assured that the Coral Gables Country Club remains open and operational.”

But the whole affair has the look and feel of a government takeover of a private entity. A coup de club.

The city’s position is that they’ve been robbed. They accuse the Di Donatos at least since 2020 of hiding profits (read: stealing) so they don’t have to pay participation rent. These accusations came 10 years after the lease agreement was first signed and right as it was up for renewal — and were timed perfectly with a bid to take over operations by a group of investors led by the politically-connected Rodney Barretto. It was withdrawn after a lot of backlash from the community rejecting what everyone feared was an inside deal that would change the character of the iconic club.

Bad blood between the Di Donatos and the city continued to boil. The city, which cannot refuse the renewal unless the operators are in default, says the operators are in default with both base and participation rent. They have not furnished any proof, however, and put the onus on the operators, saying they have not turned over audited financials.

Mayor Vince Lago said in September that the city manager was conducting an audit. But they can’t do it without getting a look at the operators’ books.

“They have not held up their part of the bargain,” Lago told Ladra. “They have not been transparent. They have not been up front.”

He said the city has had to spend $2 million on the building in the last year to make repairs and replace the roof and that inspectors found a lot of things had been done without the proper permits.

In any case, the city has decided that its parks and recreation department is going to run the club (read: nobody else wants to). Why not? They run the youth center, right? This is a set-up for failure so that the city can say it’s lucky when Barreto comes back to save the day. Meanwhile, the city commission has already approved a $1.8 million budget for a staff of 31 new city employees. These include the manager of the gym and most, if not all, the employees of the club.

But the city will also need the kitchen equipment and gym equipment and lockers and pool chairs and patio umbrellas and banquet chairs and tables, chandeliers, planters, sofas in the bridal suite, and mirrors and alabaster features, just to start. Or they’re going to have to make a sizeable investment and delay a reopening.

Athletic Club members are already, and rightfully, worried that they won’t be able to use the equipment come May 1. Ladra would venture to say the city administration is also scared and that’s why all this is happening.

There’s a whole inventory list of stuff that is owned by the Di Donatos, not the city, as listed on the settlement agreement. The city wants it. They got an appraisal that says it is all worth $370,000 in total. Including the chandeliers, exercise equipment and industrial kitchen appliances.

Seems lowball. Can the city get all that for $370K on the market?

It’s a ridiculous offer, say the Di Donatos. “If you have to build a restaurant, it’s far more than that,” Anthony Di Donato told Ladra.

They value their stuff at around $1 million. Seems like they could have settled somewhere in the middle. They would rather sell it for that than pay to haul it all back to Canada. But sources on both sides report the city and operators were at an impasse.

“I have a responsibility to operate on behalf of the residents and I have a certified appraisal from a reputable company which provides a value for the FFE,” Lago told Ladra, referring the fixtures, furniture and equipment. “And the tenant is unwilling to negotiate.”

Really?

In an April 12 email to Zeida Sardiñas, an asset manager with the city’s economic development department — copied to Iglesias and Assistant City Manager Alberto Parjus — patriarch Nick Di Donato says from Toronto:

“I did not hear back from you on this matter and want to understand the City’s position on this matter. We would like a smooth and amicable transition and want to confirm we are able to start removing the chattels and equipment listed on our settlement agreement commencing May 1, 2022.
“I would appreciate a response so that we may start our preparations. Thank you.”

The response: Hours later, the very same day, the city, arguing that the Di Donatos were going to strip the place clean, went to the court with the emergency motion — filed just before 8 p.m. — to have a receiver appointed. The next time the Di Donatos hear from the city, the police are barging in.

Two weeks before they are about to leave, a receiver walks in with the police and says, ‘Give me all the keys and passwords and get the fuck out of here.’ Basically.

The city’s motion to get the receivership said that the operators “had established an alter ego” corporation to operate the fitness center. “By hiding this information, the Di Donatos deprived the city of crucial data necessary to calculate the percentage rent owed,” it reads. “The city presumes the Di Donatos’ motive in establishing and concealing this tenant-subtenant relationship was to obtain a windfall at the expense of citizens.”

They likely told the judge that Coral Grand had been ripping them off so that they can go through the books and see if they can make a case for keeping the stuff as payment owed.

The Di Donatos say that the arrangement has been the same from the beginning and that the city knew about it. “The city gave us a certificate of use. The mayor gave us an award,” Anthony Di Donato told Ladra, referring to the Athletic Club and the former mayor. “The city is just creating fear so they can do what they want. We’ve been bullied long enough.”

When Ladra asked City Attorney Miriam Ramos what items belonged to the operators and which were the city’s, she said that was yet to be determined. And that’s strange because there is a list of items in the settlement agreement and a list of items that were appraised and an offer made on the purchase of said items, so it seems that it has already been determined that these things belong to the operators.

The city maybe wants a redetermination by the court based on what they say is owned rent.

Coral Gables Country Club, Vince Lago

Coral Gables Country Club is open for business as city “seizure” goes to court added by Ladra on April 18, 2022
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