401 Blues

Those Who Bought Into a North Beach Condo Conversion Thought They Were Getting a Piece of the American Dream. Many Experienced a Nightmare Instead

Article Courtesy of The Miami Sun Post

By By Ben Torter

Published March 18, 2008 

On the evening of June 28, 2005, about 25 owners who had recently moved into the condominium conversion called 401 Blu received letters from its then-Project Manager Debra Mason telling them they had 24 hours to get out.

“Unfortunately, due to circumstances beyond our control, we can no longer have residents living in the building while construction is under way in the common corridors,” announced the letter. “We anticipate that work in the common areas will be complete within two to four weeks.”

Edward Carlson of Illinois-based Comprehensive Management Services purchased the 207-unit building at 401 69th St., Miami Beach in 2003. Another Carlson company, Byhall, LLC, owns 81 units in the building and is the subject of multiple lawsuits by other owners seeking damages. Carlson is also converting another building, Treasure on the Bay, at 1900 S. Treasure Drive in North Bay Village.

Back in the first half of 2005, a title company associated with 401 Blu allegedly pressured contracted buyers to close on their units despite the fact that the building hadn’t received certificates of occupancy from the Miami Beach Building Department because it was still under construction. A July 7, 2005, SunPost article stated that one buyer had been told he’d be fined $160 per day if he didn’t close on his two-bedroom unit. That same article quotes then-Miami Beach Building Official Hamid Dolikhani as saying: “It is very questionable how they even closed [on the units] without any certificates of occupancy from the city.”

More than two years later, lives are still on hold, people’s financial credit has been destroyed, the developer has yet to complete the building, and everyone associated with him is keeping quiet about it.

One of Carlson’s tight-lipped representatives, Alfredo Gonzalez of Greenberg Traurig, appeared before the Miami Beach Zoning Board of Adjustment on Aug. 3 to give a progress report. The board granted a variance to build two sets of exit steps that the Fire Department required in January. The variance was necessary because development regulations had changed since 1970, when the complex was first built. Sonia Machen, the Miami Beach fire marshal, told the SunPost that the interior fire exit stairs were fine, but because an outside ramp on the building was “too steep,” two small sets of steps were needed.

The variance was requested at the December 2006 Board of Adjustment meeting and continued for 30 days until the January 2007 board meeting, where it was approved, with the condition a progress report be presented at the March meeting. Owners showed up to those meetings and testified to poor management of the building and numerous other problems. But it seems the city can do little to help them.

“The board doesn’t have the jurisdiction over real estate transactions, but was concerned and wanted to monitor progress,” Planning and Zoning Manager Richard Lorber told the SunPost.

Another progress report was requested for May 4, and finally another for Aug. 3. Gonzalez told the board that construction on the steps was set to begin Aug. 10.

“I’ll be honest with you, we are dealing with bad people here,” board member Seth Frohlich testified about the character of the development company.

Hugo Alvarez, an attorney with Alvarez, Paz & Barbara, spoke on behalf of Diego Quint, one of the original owners who was forced to move out in 2005. He and at least 20 others are suing for damages. Quint is seeking in excess of $50,000.

Looking for a better life, Quint came to Miami Beach in 2001 from Argentina as that country’s economy was collapsing. A hair stylist by trade, he saved money and was able to buy a condominium for him and his family. His wife, Vilma, and their American-born twin 3-year-olds, Lucas and Thomas, were visiting family in Argentina when Quint closed on the $272,000 one-bedroom condo. He’d been living in the condo for five days, and his family was scheduled to arrive from Argentina the next day, when a vacate notice was slid under his door at 11 p.m. At the time Quint’s English was poor, so he had a neighbor translate for him.

“I couldn’t believe it,” Quint told the SunPost. “I couldn’t believe it. And basically I was crying.”

The next morning he picked up his family at Miami International Airport.

“When we go back to the building, the building is under a disaster,” Quint said. “Everybody’s down there in the office, screaming, yelling. I said, ‘No, this cannot happen to me.’”

At first it seemed CMS truly felt bad and wanted to help the affected unit owners, Quint said. The developer arranged for hotel rooms and said in writing, “For those who find alternate lodging, a per diem allotment of $100 per day will be provided.”

Quint moved his family into the Golden Sands Hotel at 6901 Collins Ave. Over a three-month period they received $5,600 from CMS. The money stopped coming in December 2005. But he wasn’t allowed to move into his condominium until September 2006, when the city issued the seventh floor a certificate of completion.

During that period Quint paid the mortgage and taxes on a condominium he couldn’t live in, on top of rent on another apartment. Part of his lawsuit demands reimbursement for the extra costs incurred. Even if he wins, he says it’s too little too late; that the financial burden already broke up his family. Last year, saying the stress was too much for her, his wife took their boys back to Buenos Aires. Now Quint lives with a roommate in a rented apartment while he leases his 401 Blu condo at a loss. His tenant’s lease doesn’t expire for another six months.

Nearly half of the building’s 16 floors are still uninhabitable because they don’t have certificates of completion. The developer hasn’t applied for permits for two of the floors. Fees of $37,845.30 are owed on the other five.

Last week Candace Duff, another of Carlson’s Greenberg Traurig attorneys, was startled when she answered a phone call from the SunPost seeking comment.

“I’m sorry. I cannot. Thank you very much,” Duff said in a harried voice before slamming the receiver down.

Alvarez said there are rumors Duff is trying to take herself off the case.

Gonzalez didn’t return repeated calls for comment either. In fact, no one associated with the developer would comment. Carlson himself could not be reached for comment.

Though the Board of Adjustment expressed sympathy for the 401 Blu owners seeking restitution, its hands are tied.

“Our purview is the granting of a variance to build egress stairs,” board member Larry Herrup said. “That’s it.”

The city board voted to bring the variance issue back for another progress report in October. It would like Carlson himself to appear, but by law he can send a representative.

Meanwhile, Quint is beginning to lose hope that he will see his money. Rumors are circulating around the building that Byhall, LLC, is preparing to declare for bankruptcy protection.

Said Quint: “I don’t know what will happen to us.”