Lawsuit against broker reflects tide of adversity businesses have faced
By Mary Thurwachter,
Larry Keller and Jan Norris
When news hit the streets of a court case filed against one of the county’s foremost restaurant brokers — one who once managed a block of struggling shops on Ocean Avenue — no one in Lantana seemed particularly surprised.
While the broker, Tom Prakas, dutifully collected shop owners’ rent each month after he became manager in March 2016, he stopped turning over the money to the property owner 18 months later and used the cash as his personal repository, according to a series of jarring admissions in a sworn deposition.
Prakas spent the money for pricey family vacations and expensive dinners at restaurants, and doled out thousands of dollars to his family, according to a lawsuit filed in Palm Beach County Circuit Court. The allegations stem from an eviction lawsuit over $343,000 in unpaid rent. A judge evicted Prakas in 2018.
This news was no shocker to Dave Arm.
“This is an old story,” the Lantana Chamber of Commerce president said. “We’ve known about this, but it finally hit the papers.”
Prakas, Arm said, “has probably been the most successful restaurant broker in South Florida. He’s the go-to guy if you want to buy a restaurant, sell a restaurant, lease property, or buy property and put a restaurant in. He’s the guy. For some reason, he decided he wanted to control this property. He went to Burt Handelsman (who then owned the property) and came up with this idea of doing a 99-year lease.”
The property — a collection of small, colorful old shops on the north side of the 200 block of Ocean Avenue — became Lantana Village, and Prakas put up a sign so everyone would know. But the sign disappeared a few years ago along with Prakas’ dream of turning Ocean Avenue into Lantana’s version of Mizner Park, Arm said.
Only three shops are currently occupied: Mario’s Ocean Avenue, Oceano Kitchen and Jeannie’s Ocean Boutique. The vacancies are a mix of recent closures and buildings that were empty when Prakas arrived.
“There was a hair cutter, but she’s gone,” Arm said. “Set back in there was a little smoothie café, but that’s closed now.”
Arm said one of the features of the Handelsmans’ real estate program “is they really never fix anything up and they never sell anything.” The shops between Oceano and Mario’s are “really dilapidated,” he said.
“They’ve been empty since I’ve been in Lantana,” said Arm, who arrived in 2006. “Tom (Prakas) came up with the idea of getting a master lease on the whole thing, trying to fix up and lease out those shops in the middle that are empty, and also control the leases for Mario’s and Oceano Kitchen and the clothing store,” Arm said. “Apparently Prakas had no idea how code works and how parking works and what the story is in Lantana.”
Breaking the lease
Prakas began deviating almost immediately from terms of a 49-year master lease (with a 49-year option) that he signed in March 2016 for the shops known as Lantana Village. The owner of the properties was Love Lantana Point LLC. Real estate magnates Burt and Lucille “Lovey” Handelsman and their son Steven each had a 33% stake in the company.
The lease stipulated that Prakas — via his own company called Lantana Village LLC — would pay $18,450 a month. The rents he collected from the shops’ subtenants were to cover his own monthly rent on the master lease, as well as taxes, insurance, utilities, repairs, maintenance and the like.
Prakas, however, paid only $15,000 a month from April 2016 through March 2017, and stopped paying any rent at all beginning in October of that year. He purportedly collected $16,000 to $20,000 per month from the tenants. Even when he paid his own rent, he sometimes paid late and sometimes bounced checks, according to court records. He also failed to pay other costs such as insurance and property taxes.
Love Lantana Point sued Lantana Village LLC in January 2018 and sought to evict Prakas and recover unpaid rent and taxes. Prakas, his wife, Donna Gibson, and a son, Nicholas, were later added as defendants for alleged fraudulent transfers and civil conspiracy.
Prakas contends the rent was too high — in part because of insufficient parking — and that he had a verbal agreement with Burt Handelsman, his longtime friend, to pay the lesser amount. The lease, however, stipulated that any amendments had to be in writing.
Meanwhile, the Handelsmans were in the throes of a complex divorce starting in March 2016. Nearly 90 family businesses — including Lantana Village — were among the marital assets contested by the couple. Burt Handelsman, 92, tried to keep the Lantana properties and continue with Prakas as the master lessee.
A judge eventually awarded the properties to his ex-wife and their three children. They are now managed by daughter Marsha Stocker. Prakas said he attempted in vain to reach a settlement with her.
Tenants weigh in
Word of Prakas’ legal problems also came as no surprise to chef Henry Olmino, owner of Mario’s. Because of the ongoing lawsuit, Olmino didn’t want to comment, but he did say he was happy with the relationship he has maintained with Burt and Lovey Handelsman initially and currently their daughter Marsha.
“By the time Prakas took it over as manager everything was done,” said Olmino, who opened Mario’s in 2015. “We were at full roll and all I did was write him a check every month. I have a triple net lease, which means if something breaks, I fix it. So all he did was come by and pick up the rent.”
Olmino began paying rent directly to Handelsman’s wife and children (or Love Lantana Point) after the Handelsmans informed him that Prakas hadn’t been turning over the rent to them. And that’s just fine with Olmino, who says he has a good working relationship with his landlords.
While Olmino was able to weather the Prakas reign, a former tenant was anything but pleased with the former manager.
“We were driven out against our wishes,” said Tara Huber, owner of Good Vibes Acai Bar and smoothie café. “Tom Prakas became our new landlord in April 2016 and by the end of 2017 he succeeded in destroying everything we built and drove us out officially. Due to current litigation, I can’t speak of all the particular things Tom did to us at this time, but I feel telling the truth in short about why we left is no secret to many who know us.”
Huber said she couldn’t understand why Prakas was making it so difficult for her to stay in business. She thought she and her family had created a wonderful community together and brought life to that end of the street. “We assumed we would be his key benefit to helping him build the Lantana Village he often spoke of.
“We soon found out exactly why,” Huber continued. “His underlying motive and purpose of driving us out was because he loved our concept and all we had built and wanted it for himself and his children to claim the glory of it.”
Prakas nearly tripled Huber’s rent only to gift the shop to two of his sons, Alex and Aristotle, for a fraction of what Huber was paying, she said.
The sons opened a vegan shop, the Current Café, that sold acai bowls and smoothies. Prakas reimbursed them for expenses they incurred to spruce up the property, he said in a deposition.
The Current Café closed in January 2019. Huber had moved her business west to 6169 S. Jog Road in Lake Worth in 2018.
Dak Kerprich, creator of Pizzeria Oceano, was on the block before Prakas arrived but sold his restaurant in early 2017 to Jeremy Bearman, who rebranded it as Oceano Kitchen. Prakas brokered the sale.
“We were not there that long with Tom,” Kerprich recalled. “I introduced Tom to the town of Lantana. That’s when he kind of figured out what they were doing with that property. I introduced him to Dave Thatcher (Lantana’s former director of development). I’ve known Dave for years.
“I worked with Thatcher when I opened up Oceano, then Burt (Handelsman) actually opened up two (parking) spots for me,” Kerprich said. Parking on the avenue has long been an issue.
“I’m probably the only one in the world who can’t say anything bad about Burt,” Kerprich said. “I’ve never had a problem with him. I paid my rent. I liked him. I like listening to him: He’s very interesting — a pleasure to talk to.”
Kerprich also said Prakas was an interesting guy. “You have to take him with a grain of salt. He basically told me what he wanted to do with the block and I told him I was ready to move from Pizzeria Oceano.”
Unlike Olmino, Bearman has a regular lease at Oceano Kitchen. If something has to be repaired at the building, landlord Love Lantana Point pays for it.
“What happened between Tom and Burt,” Bearman said, “was obviously a lot of scheming. It ended up pretty much a bad situation for everyone that was involved. Definitely cost us money in lawyer fees and all the rest of that.
“We don’t have any problems, nobody comes around and asks us anything,” Bearman said. “We do OK with what we have. Nobody’s told us we have to go find other parking.”
“Basically, the empty shops have no parking,” Arm said. “Oceano Kitchen has some parking spots and Mario’s has some parking spots. The parking spots are basically given by the landlord to the tenants to control so they can fulfill the code. So, say Mario’s needs 40 parking spots, it left no spots for these stores. You can’t have a store with no off-street parking. I don’t know if he (Prakas) didn’t know that going in or didn’t research it or thought he’d be able to get around it.”
Prakas, 63, went to the Lantana Town Council on Sept. 26, 2016, to ask for a shared parking agreement that would allow the empty shops to share a town lot on the west side of Dixie Highway on Third Street with Mario’s. But that didn’t work out.
In May 2019, the town did significantly reduce the parking requirements for downtown businesses, and Mario’s, which offers valet parking, no longer needed the town lot. In fact, Olmino said Mario’s never once parked a car on the town-owned lot since he signed the lease for the lot in 2015.
While there is an ongoing debate about whether Ocean Avenue has a parking problem, Arm said he doesn’t think the code is restrictive anymore.
Mayor Dave Stewart adds: “Of course, on Friday evenings and when there are football games and when people go out to the restaurants, yes, parking is at a premium. But every resident can go purchase a parking permit for one year for $36 plus tax and they can park at any spot, anywhere without having to pay a meter — anywhere along Ocean Avenue (where there are no meters), or in the kayak park, Bicentennial Park and Sportsman’s Park where there are meters. I believe we have provided ample spaces for them.”
Prakas’ side of the story
Being a real estate broker, Prakas was hardly a novice at leases and contracts. He says he sold Handelsman millions of dollars of property over the years. When he was young, he worked in the restaurant and bar industry for his parents. By age 21, he opened his own establishments, accumulating 28 restaurants and nightclubs throughout Ohio, Georgia and South Florida. He shed them all in the 1990s, he says, and switched his focus to commercial real estate.
Yet in a pair of sworn depositions, Prakas was fuzzy on details about his bank accounts, said he failed to put agreements in writing and couldn’t explain some of his expenditures.
He contends that Burt Handelsman agreed to the $15,000 in reduced rent until he resolved the parking issues. “I never could get the parking settled,” he said in one deposition.
But he also agreed to the lease even though he said two to four of the structures were so shabby that it would be more economical to tear them down. Prakas said he spent $30,000 on awnings, decks, landscaping and painting the structures. His lease should have been around $10,000 a month, he said.
“It was a bad decision,” Prakas said. “I made a bad deal.”
Handelsman vouched for Prakas’ account. “He didn’t pay the rent that was stipulated in the lease because I said he could take an allowance,” Handelsman said at a court hearing in July 2018. “I made a management decision, what’s best for the company. He was putting back buildings that were falling apart. He was spending far more money than he or I even contemplated that he was going to need.”
In the fall of 2018, Circuit Judge Howard Coates Jr. ordered Prakas to deposit almost $343,000 into a court registry for unpaid rent. Prakas said under oath earlier that he had held onto the subtenants’ rents that he received. But none of the money was paid, and interest is accruing.
Instead the Prakas family treated Lantana Village income as though it was “their personal piggybank,” attorney Jeffrey Fisher, representing the Handelsman children, said in a court filing.
“All told, the Prakas family has conned Love Lantana out of hundreds of thousands of dollars,” Fisher wrote.
The entire family — Prakas has six sons and two daughters — spent Thanksgiving and Christmas 2016 on visits to Atlanta, staying at a luxury hotel in the city’s swanky Buckhead area.
Prakas conceded that his son Nicholas — who he said managed Lantana Village for him — repeatedly spent tenants’ rent on personal expenses such as airline tickets, Uber Eats, Starbucks and Domino’s Pizza.
He also acknowledged transferring Lantana Village rent to his wife but said it was to repay a loan she made to Lantana Village. There is no promissory note, he said.
And Prakas transferred Lantana Village income in what he said was “a very small amount” to a Delray Beach building on which he held the master lease. The owner: Burt Handelsman.
“You made a conscious choice to pay yourself and your family members rather than the rent, right?” Fisher asked.
“Well, yeah,” Prakas said.
Prakas, who hasn’t held leases on Ocean Avenue since 2018, was hesitant to comment on the litigation.
“It was a rent thing,” he said. “It was a negotiation. I was trying to renegotiate the lease and got embroiled in the middle of a family battle with the Handelsman family, with the father. That’s all I can say. It’s a Greek tragedy. There are three sides to the story — yours, mine and the truth. They only told one side.”
A trial date has not been set.
How to fill empty shops?
Arm said the Chamber and all of Lantana would like to see something happen and get some businesses into those empty shops.
“I’m not certain how it could be done. It’d be great if something could open up there, if the owners of the property could make that happen,” he said, referring to the Handelsman family.
Alan Ross, whose Shades of Time sunglass shop across the street at 214 E. Ocean has been on Ocean Avenue for 26 years — the first several years in one of the vacant shops the Handelsmans now own — said people have to be realistic about the street’s potential.
“I don’t know what the intentions are of the people that have that property,” Ross said. “In my opinion, 25 years later, this isn’t a street that has a lot of walking traffic at all. You have to have the willingness and/or ability to make yourself a destination with a product that works or you’re just not going to do business.
“I’ve seen businesses come and go and the reason they’ve come and gone is they didn’t do the upfront work they should have done to investigate what the street and its potential was or is.”