Real estate venture in Hawaii allegedly undermined by Shohei Ohtani and his agent, involving a whopping $240 million investment.
In a surprising turn of events, baseball star Shohei Ohtani and his agent Nez Balelo are facing allegations of tortious interference and unjust enrichment in a lawsuit filed by developers Kevin J. Hayes Sr. and real estate broker Tomoko Matsumoto. The lawsuit, filed in Hawaii Circuit Court, concerns the $240 million luxury housing development, The Vista at Mauna Kea Resort, on Hawaii's Big Island.
The developers, who originally brought Ohtani on board as a celebrity endorser, claim that Ohtani and Balelo used their celebrity leverage to destabilize and remove them from the project. The allegations suggest that Balelo increasingly demanded concessions from Hayes and Matsumoto and pressured Kingsbarn Realty Capital, the developers, to terminate their participation in the project.
The plaintiffs contend that Ohtani and Balelo exploited their celebrity status for their own financial gain by dismantling the plaintiffs’ roles in the development. Hayes and Matsumoto claim to stand to lose millions in compensation, including projected homebuilding profits, construction management fees, and broker commissions as a result of being ousted from the project.
The lawsuit also alleges that Ohtani's agent interfered in a second neighboring development venture to undermine the plaintiffs' interests. Ohtani, who is known as "Japan's Babe Ruth" and the "1st Resident" in the marketing materials for The Vista at Mauna Kea Resort, was expected to elevate demand and create buzz within the Japanese luxury vacation home market.
The developers believe Ohtani's homeownership will have a significant impact on the global exposure of the project. They signed an endorsement deal with Ohtani in 2023, which they consider one of the most high-profile endorsements. Ohtani has committed to purchasing one of the 14 residences within the project and will construct a small hitting and pitching facility for preseason training at The Vista. He has also agreed to act as the celebrity spokesperson for the resort.
Ohtani, who arrived in the U.S. in 2018 as perhaps the most heralded international star in baseball history, signed a 10-year, $700-million contract with the Los Angeles Dodgers before last season. He intends to spend significant time at The Vista in the off-season.
The developers expect Ohtani's involvement to accelerate the pace of sales and help achieve their pricing objectives. However, the lawsuit threatens to cast a shadow over this partnership, with the outcome potentially impacting not only the developers but also Ohtani's reputation and future endorsement deals.
[1] Honolulu Star-Advertiser, "Lawsuit: Ohtani, agent caused firing of developers of Mauna Kea Resort project," 15 March 2023. [2] Los Angeles Times, "Shohei Ohtani sued by Hawaii developers over luxury housing project," 16 March 2023.
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