STEUBENVILLE — With the Fort Steuben Mall property slated to go up for auction less than two weeks from now, current owner Flamengos Investments is suing the company that sold it to them 16 months ago.

Flamengos, based in Winston-Salem, N.C., filed suit against Brookwood Capital in August 2022, just three months after it took ownership, claiming the Nashville-based company had made “representations” about the condition of the property, leases, rents and income projections.

Brookwood Capital founder Ben-wadih Hamd denied the allegations levied in the lawsuit, saying his company has a long and successful track record in the retail sectort.

“Over the past 20 years every project we touched has been better and Steubenville is the same way,” Hamd said. “Look at all the new businesses that were there (when Flamengos took over) and are still there.”

Brookwood Capital had purchased the mall in February 2022, and months later put it up for auction. Flamengos purchased it in May 2022 for a little more than $11 million.

The lawsuit, filed in U.S. District Court for the Southern District of Ohio, alleges Brookwood “represented that the property had dozens of presently-paying tenants” under lease, “providing positive cash flow and an anticipated return on investment.” They said they were told the property “generated income substantially in excess of $140,000 per month.”

“Unbeknownst to Flamengos, the aforementioned information was inaccurate, inflated, and otherwise materially misleading,” the complaint alleges. “Specifically, Brookwood failed to disclose … that, in order to induce certain tenants reflected on the rent roll to enter into leases, Brookwood had told those tenants that the leases would never be enforced and otherwise misled prospective tenants into entering into leases; That many tenants had been granted extended periods of free rent of six or more months and, instead, Brookwood included such leases on the rent roll as part of the current cash flow of the property; that many tenants listed on the rent roll did not have the financial wherewithal to meet their obligations under each of their respective leases; and that it did not, in fact, generate income in excess of $140,000 per month.”

Flamengos contends the seller artificially inflated the value of the property “to drive up the price that would be garnered at auction” and complained that on a site visit about two weeks after the auction they “discovered substantial and material issues with the roof on the building and the parking lot … which required repair to be completed following closing.”

“The issues with the roof included, without limitation, substantial and material leaks spread out through large portions of the roof, which, over time, had led to water damage– including water damage to interior carpet and electrical panels — and high moisture levels within,” the plaintiffs complained. They also noted a “large number” of potholes in the parking lot as well as the absence of any pavement striping, and said the lot was in “substantial need” of resurfacing and repaving.

Flamengos also contends Brookwood officials promised to schedule the asphalt work and said they were in the process of getting and approving a bid for a roof replacement “to be completed soon” but said the Nashville company proposed setting $100,000 of the purchase money in escrow to cover the roof repairs the very same day a contractor said they would need to replace “a substantial portion” of the roof for $1.8 million.

“Brookwood’s failure and refusal to meet its obligations under the agreement with respect to the roof has caused, and is continuing to cause, additional damage to the property,” Flamengos complained. “… The property has experienced substantial rains that have exacerbated the leaks and have led to further water and moisture intrusion at the property. On at least one occasion, there was up to 6 inches of standing water in various parts of the property…”

Attorneys for Brookwood and Flamengos’ attorneys could not be reached for comment.

In a court filing responding to the lawsuit, Brookwood denied all wrongdoing, insisting they’d clearly communicated the property was being sold “as-is” and that they did not provide “false information” to the buyer, nor did they produce or provide fraudulent leases to the buyer.

The Nashville firm also argued Flamengos’s claims “lack specificity” and are “frivolous.”