Article Courtesy of The
By Mary Shanklin
November 11, 2010
pockmarked stucco on its exterior and boarded-up storefronts facing its
village square, the beleaguered Hamptons condominium community in
MetroWest has had more foreclosures than perhaps any neighborhood in the
Built as apartments a decade ago on the north shore of Turkey Lake, the
amenities-packed Hamptons units were converted to condos five years ago,
during the homebuying frenzy, with some of its 700-plus units fetching
more than $200,000.
then, prices have plummeted 75 percent. Rows of units sit
dark and empty. More than half the condos have been in
foreclosure at some point during the past four years. The
community's sales center is among the properties in
foreclosure. Banks won't risk lending money for anyone to
buy there, so it's basically reverting to rentals, with
investors holding most of the units.
"It's the worst of the worst," said Orange
County Property Appraiser Bill Donegan. "Going back
to 2005 and 2006, Orlando was really high on condo
conversions, and this one was the poster child.
Hamptons at MetroWest
are 81 property owners who actually live there — and that's out of 776
units," Donegan added. "This was all part of the frenzy to 'buy a
condo next to Universal Studios, and you'll make a million dollars.' "
What distinguishes the Hamptons from Central Florida's plethora of
price-plummeting condo conversions is a 2-year-old lawsuit that has come to
define the mostly vacant community. At the center of the lawsuit is longtime
apartment builder Epoch Properties Inc., under the leadership of Jim Pugh
— known throughout the region as the prime booster of a $383 million
performing-arts center slated to be built in downtown Orlando.
The Hamptons' condo owners accuse Pugh's company and other firms of sloppy
workmanship and hundreds of building-code violations that they say have led
to $60 million worth of damage and created an environment marred by water
intrusion, mold and unsanitary conditions. The lawsuit, filed in state
Circuit Court in Orlando, cites rotting walls, floor damage from leaky
sliding-glass doors, improperly installed windows, cracks in ceilings, water
stains, and nails popping out of walls.
"It's had issues for some time related to water intrusion and rot from
water intrusion," said Orlando Code Enforcement Division Manager Mike
Rhodes. "They've been going through a long and tedious litigation with
the developer and contractors doing assessments, and they're moving through
the property pretty slowly. The entire first floor of commercial [space] in
the front part is all rotted out, with materials removed, and it's been
shored up. There's been significant problems with window installations that
have led to water intrusion. We've had fines running on it for a
Walls, floors, windows and balconies have been torn apart and otherwise
dismantled in an effort to assess any construction defects.
The builder, Epoch Properties, has filed related legal complaints against
subcontractors who designed and worked on the project.
Pugh, chairman of Epoch, said that, in his company's 40 years of building
more than 150 multifamily housing complexes, he has never seen anything like
"It's just a mess. … It's a huge mess due to lack of maintenance and
lack of care with leasing," he said. "It's going to get worse
because there's no money to maintain it."
Epoch built the apartment complex to standard architectural designs and
building codes, Pugh said, but the companies that purchased it for
conversion into condominiums ended up selling units to unqualified buyers
and renting to unqualified tenants — and no one maintained the property.
"When we sold it six years ago, we were very proud of it," Pugh
said last week. "It was one of our showcase properties."
When Epoch sold the complex in 2004, it broke with its usual practice of
selling properties to institutional companies that screen residents and
invest in upkeep. "We were greedy," Pugh said. "We took the
highest price, but how would we have known they would rent it out to
Pugh's company and the Prudential Insurance Co. sold what was then known as
Park Place at MetroWest for $90 million to condo developers Tarragon South
Development Corp. and Sunvest Communities LLC. At the time, former Tarragon
Vice President Tony Martin, now with Wells Fargo, touted the community as
MetroWest's "greatest asset."
Pugh, who serves as chairman of the Dr. Phillips Center for the Performing
Arts, said he split the sales proceeds with Epoch's partners and that only
an insignificant amount from the sale fueled the $7.5 million donation that
he made with his wife to the arts-center project several years ago.
In addition to suing the builder, Hamptons owners have sued the complex's
condo converters, accusing Tarragon South and Sunvest of concealing
construction defects from those who purchased units.
The homeowners' case is set for trial next year, if it's not settled first.
While lawyers for more than a dozen parties wrangle over the case, the
community's homeowners association keeps the pools open, the fitness center
equipped, and the security gates operational. Despite the turmoil, the group
has been able to reduce the amount of overdue association fees, from about
30 percent last year to about 20 percent this year.
Sitting on a bench in the middle of a well-landscaped square that's
surrounded by a reconstruction zone, homeowner-association member Beth
Heffernan- Monaco said the unit owners have held the Hamptons together.
"We have been able to maintain ourselves with all the ups and
downs," Heffernan-Monaco said. In a few years, she added, everything
should be repaired.