A joint venture between Slate Property Group and The Carlyle Group initiated a foreclosure lawsuit on September 22 against developer MG Developer over an alleged $31.1 million default linked to the Metro Parc South project, a rental tower under construction with 347 units in Hialeah, famously known as the most Cuban city in the United States.
The lawsuit was filed by Scale Lending, the real estate lending arm of both firms, as part of a $105 million construction financing package secured by MG Developer, based in Coral Gables and led by Alirio Torrealba, back in April 2025.
Court documents cited by The Real Deal indicate that the lenders accuse the developer of failing to make required deposits into reserve accounts, allowing construction liens to accumulate on the property, and neglecting to pay the 2025 property taxes.
Scale Lending had issued notices of default in January, May, and June of this year. Following these notices, the parties entered into a forbearance agreement, which later expired without resolving the issue, prompting the lenders to take legal action.
The lawsuit seeks the recovery of the $31.1 million plus accrued interest, attorney fees, and court costs.
Metro Parc South represents the third phase of a more extensive MG Developer project in Hialeah: a 10-story tower situated near East 24th and 25th Streets and Ninth Avenue, adjacent to the Metrorail. The land was acquired in 2024 for $16.3 million through three transactions over almost two acres.
The foreclosure is not the sole legal challenge facing the company. Since summer, eight additional lawsuits have been filed in Miami-Dade Circuit Court by creditors claiming default on promissory notes, collectively seeking $21.4 million.
The plaintiffs primarily consist of entities linked to individual investors who loaned between $750,000 and $6 million each, lacking mortgage security on the property.
This distinction matters: if the project goes into foreclosure, unsecured creditors are in a weaker position to recover their funds, exposing small investors to potentially significant losses.
MG Developer acknowledged the situation but denied responsibility. A spokesperson for the company told The Real Deal, "We fully recognize that the lender has a specific legal recourse in these matters. Nonetheless, we remain actively engaged in good faith negotiations, including seeking an additional investor, to bring this matter to a swift resolution."
In a broader statement, the firm claimed to have reached verbal agreements with some of its creditors and attributed the issues to "liquidity and timing challenges" partly related to its property in North Bay Village, where it is selling its stake to a Prosper affiliate for $20 million.
The lawsuit does not affect the other two phases of the Hialeah development. Metro Parc North, with 347 units, was acquired by Baron Property Group, secured a $226.5 million refinancing in July, and has over 50% occupancy, with completion expected by the end of 2027.
The case arises at a sensitive time for the rental market in Miami-Dade, where rents have declined over the past year: the median in Hialeah stands at $2,412 per month, a 3.52% decrease from a year ago.
Nonetheless, the affordable housing crisis in the city remains severe: the average rental burden accounts for 67.9% of residents' monthly income, and the local Housing Authority opened just a seven-day window in July to apply for the Section 8 housing voucher waitlist, reflecting the high demand.
MG Developer emphasized that its priority is to "formalize the reached agreements, resolve outstanding issues, and responsibly and constructively move beyond these legal troubles," although the foreclosure lawsuit continues to progress through the courts for now.
Key Questions About the Hialeah Foreclosure Case
Why was the foreclosure lawsuit filed against MG Developer?
The lawsuit was filed due to MG Developer's alleged default on $31.1 million linked to the Metro Parc South project, including failing to make required deposits into reserve accounts and neglecting property tax payments.
How does the foreclosure impact other phases of the Hialeah development?
The foreclosure does not affect the other two phases of the development. Metro Parc North, for example, was refinanced and is on track with over 50% occupancy and expected completion by the end of 2027.
What challenges is MG Developer facing aside from the foreclosure?
In addition to the foreclosure, MG Developer is dealing with eight additional lawsuits from creditors alleging default on promissory notes, seeking a total of $21.4 million.