About 250 flustered
Castle Beach unit owners congregated in a grand, crème-colored
assembly room in the Marriott Biscayne Bay last Monday evening to hear
their court receiver address them publicly for the first time.
At one point, an
altercation almost broke loose between a couple of exiled Castle Beach
residents, but a Miami police officer promptly shoved one of the
perpetrators out the door. “Keep him outside if he starts
instigating again,” he said.
“The
uncertainty has created a level of anxiety, so this is
a forum to let you know what’s going on,” said
Robert Stone, the court-ordered receiver, endearing
himself to the audience in a speech that preceded an
open conference for unit owners to express their
concerns individually. “I’m not leaving until
people have the ability to be heard.”
On
Thursday, April 14, hundreds of residents of the
18-story complex at 5445 Collins Ave. were – with no
preliminary notice – ordered to evacuate the
building the next morning after Miami Beach inspectors
declared it a fire hazard and structurally unsound.
During
Monday’s meeting, Stone, an accountant with the firm
of Kaufman
Rossin & Company, coolly attempted
to give unit owners an overview of the situation,
emphasizing that, in terms |
|
Miami
Police Officer Cummings (left) keeps the peace at the Castle
Beach unit owners meeting in the Marriott Biscayne Bay
ballroom. |
of
construction and restoration, the big issue is replacement of the
40-year-old electrical system.
Another
major predicament, Stone stressed, is finding money to finance the
repairs. It will cost $25 million just to restore the building,
without improvements, and an initial $10 million in repairs to allow
residents back into their units.
Stone
said he is trying to secure a 15-year bank loan, with
interest rates running from 8 to 10 percent, on behalf
of the condo association. He also mentioned residents
would be able to move back in about six months after he
gets the money (though he couldn’t say when that might
be), but emphasized no contractor would start any work
until they see the green.
When
asked if any work has been done on the building to date,
Stone replied that only the air conditioning system has
been restored since he doesn’t have enough money yet
to pay a contractor.
“We
basically wasted a month,” said resident Denitza
Petrova. |
|
Court-ordered
receiver Robert Stone speaks to a group of more than 100 at a
meeting to discuss the fate of the Castle Beach condo. |
More than a year ago,
condo owners sued Leopoldo Gonzalez, Emilio Berkowitz and Horacio
Mecozzia – who collectively owned 150 units used as a hotel – and
the Castle Beach Condominium Association for not properly allocating
fees to maintain the building. Then, in mid-April 2005, a court order
froze the board of directors from pursuing further action, leaving the
financial receiver, Kaufman Rossin & Company, in charge of the
building’s operations.
Until now, however,
several residents claim they had no idea what was happening to their
homes and were basically left to fend for themselves.
“I feel very
frustrated that it had to come to this,” Elizabeth Martialay, a
Castle Beach unit owner and partner with the Shutts & Bowen law
firm, told the SunPost, “but the sad truth is that it took a
catastrophe for anybody to notice or do anything about what’s
happening here.”
Martialay, on behalf
of more than 100 residents, recently filed a new class-action lawsuit
against the three board members for misappropriating condo funds and
neglecting numerous building-code violations. She said she tried
everything she could, as of September 2004, to make the situation
apparent, approaching everyone from the state attorney to the Division
of Florida Land Sales, Condo & Mobile Homes.
“One of the
remedies is that you can do a recall of directors,” she said, “but
you need 51 percent of all owners. We have owners living all over the
place, many don’t speak English, and the recall process is extremely
difficult and rarely works.”
“We have made many
calls to the city and the housing authority to try to get to the
bottom of the assistance program that you referred to in
your article,” Martialay previously wrote in an e-mail to the SunPost,
referring to “No Time Frame on When Castle Beach Evacuees Can Return
Home,” published in the May 5 Miami Beach, North Beach and Metro
editions. “Many of the calls have not even been returned, and of the
people we spoke to, they all had different stories about what was
available. It is shocking that the city would put so many people on
the street without an organized program to assist them.”
In a telephone
interview, Michael Gongora, the attorney for the defendants in the
class-action suit, said, “My clients did not believe the maintenance
issues were an emergency in the summer of 2004. However they were
trying to remedy them as best they could with a limited budget.”
Nonetheless,
Martialay maintains, “Here are people that have been clearly abusing
their authority, and nothing has been done about it for over a
year.”
Gongora explained
that “there has never been any evidence that the individual
directors took money from the association or spent money
inappropriately.” He also said his clients never used association
personnel to remodel their units, as every maintenance worker
testified in court in November 2004.
“Some people are
trying to make my clients the bad guys,” he added, “but the city,
the receiver and the contractor were all aware of the issues since
last summer, though no one deemed it an emergency until the city
drastically changed its position [in April 2005].”
During the meeting,
Stone noted the city has also received 20 or so resident complaints
against condo associations from other Miami Beach buildings. “The
city is under tremendous pressure and scrutiny to do [its] job
right,” he said. “But it will absolutely not allow us to do
anything less than the code requires.”
Stone deferred
several questions to the court or the city, such as when one resident
cited the summer 2004 report by the consulting engineering firm
Pistorino and Alam, which stated the building had “catastrophic
structural deficiencies.”
“It took them a
year to get the city to shut down the building,” one angry resident
said.
“I cannot speak for
the city of Miami Beach,” Stone replied, “…you need to ask the
city for the reason or time frame behind that.”
However, no one
representing the city was present. “Why isn’t the city here?”
someone shouted, as people throughout the crowd began babbling.
“I know the
receiver was going to have meetings for the residents,” Nanette
Rodriguez, spokeswoman for the city of Miami Beach, later told the SunPost,
“but as far I know, we weren’t made aware of the Monday meeting
and the city has not planned on meeting with the residents.”
In
a separate e-mail message, Rodriguez said, “The city’s building
department meets with Robert Stone on a regular basis … and gladly
provides information to any unanswered questions, should he bring it
to our attention. No new questions have been forwarded to the building
department.”
While many unit
owners thanked Robert Stone for taking on the role of receiver, most
felt they didn’t have the proper representation (such as a board) to
voice their concerns. “We’re completely out of this,” said one
resident. “All we get to do is go to the bank and pay.”
“If you think
we’re spending one dime without taking into consideration the best
interest of the owners, you are mistaken,” Stone said. Later, he
added, “My only responsibility is to fix the building. If you
don’t pay, you will lose the unit.”
On that subject,
Gongora offered: “What’s most concerning to my clients is that
building is being run by the receiver, without any unit owners on
board. If they need to relinquish some control in order to have a
board of directors as unit owners, they are exploring that
possibility.”
At the meeting,
concerning the financial dilemma, one skeptical unit owner, Max
Pineda, stepped up to ask, “If you can’t come up with the money
within 30 days, what is Plan B?”
“There is no Plan
B,” said Stone. “…We’re keeping the building closed until we
have the money to do the repairs.”
Pineda then contended
perhaps unit owners could come up with the first $10 million or create
some sort of committee to help raise the money to expedite the
process. Moreover, in the memo sent to residents, Stone denied rumors
that the building is being sold, arguing it would be close to
impossible since owners would need to vote unanimously in favor of a
sale. Yet he mentioned five or six developers have approached him to
buy and raze the property.
“OK, we want to
sell!” someone exclaimed, as the crowd, again, began to
chit-chatter.
Unit owner Angel Leal
mentioned a new “Condominium Terminations” state bill #2360 with
an effective date of July 1, 2005 that states “economic
impossibility” could allow unit owners to forgo the unanimous vote
in order to dissolve their condo association and sell.
“Based on what the
receiver said tonight, I think the financing that he needs will be
unrealistic to get,” Leal told the SunPost. “He’ll need
to turn to unit owners, who would owe about $50,000 each, which would
have to be paid as a lump sum and, since owners can’t afford it, the
city would have to foreclose on the units.”
Hence, it might be
wisest to sell, Leal said during the meeting. However, no one was sure
of the legislation’s status or whether it had been signed into law
by the governor. Martialay later confirmed the pertinent piece of the
bill did not pass, so a 100 percent vote is still needed to dissolve
the association.
In April, resident
Ruth Charles had e-mailed Rhonda Montoya Hasan, the Miami Beach
building department’s legal advisor, alleging the city violated
federal “Public Health and Welfare” law by not “minimizing the
adverse impact of displacement to maintain social and economic
well-being.”
To this, City
Attorney Murray Dubbin responds: “The city is terribly unhappy about
its residents being inconvenienced because of what happened, but the
city is not in violation of anything.”
Another issue raised
at the meeting was individual unit violations; for example,
renovations made without permit or improvements such as kitchens
illegally added. Stone said 75 percent of the units aren’t up to
code and residents will have to resolve this on their own. Notices
will be issued within 20 to 30 days.
“If you bought a
unit that had a violation in it, you’re still responsible,” Stone
said. “Any legal recourse back to the seller can be discussed with
your lawyer.”
Moreover, Stone
reminded owners they must pay their maintenance fees so their units
aren’t foreclosed. “As hard as that may seem since you have all
these other expenses, these assessments will need to be paid, even if
you’re not in the building.”
In an effort to
involve the city and elucidate matters from the residents’ vantage
point, Elizabeth Martialay and Peter Fullerton, her partner at Shutts
& Bowen, sent a May 10 letter to Mayor David Dermer and the Miami
Beach commissioners.
“Many owners will
face the prospect of losing their homes because they will not be able
to afford this financial burden over an extended period of time,”
she wrote. The letter goes on to ask for the city’s assistance.
“It should not have
happened this way and the city handled this very poorly, but I think
that we are in a better-off position now,” she later told the SunPost.
“We can clean up this property and get some better management.
Hopefully, [Stone] can get the money. I know it’s a problem because
this is not a typical loan and bankers like things that are typical
and predictable. But I am cautiously optimistic.”