By the time you’re reading this, Charlotte Ryan, a retired
psychotherapist from New Jersey, will have accomplished what
Sisyphus never did. She’ll have pushed her great rock to the
very top of the mountain and crawled out from under her
burden at last.
The petite, smartly
dressed Ryan will have taken the elevator up to her
10th-floor downtown bayfront condo in Sarasota’s Dolphin
Tower, let herself in and locked the door behind her. For
the first time in five years, she will not have been wearing
a protective hard hat.
It will have been quiet in her two-bedroom, two-bath condo,
no workmen tramping through her rooms, no noisy hammering
and whining construction machinery, no calls from lawyers
and reporters. She’ll have reflected on the heartbreak and
losses of Dolphin Tower owners who could not complete the
journey with her and remembered the engineers, investors,
laborers, families and city officials who followed her
stubborn lead for years. And, she has predicted, she will
have looked out at the sailboats in the harbor by Marina
Jack, at the azure view of the bay—perhaps the very best in
the city—she fought so hard to see once again, and taken a
long, deep breath. Then she’ll have started to cry. |
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“It will be some kind
of awesome feeling,” Ryan said in June, soon after the end
of the building’s repair work. “It will be a feeling of,
‘How did I do this?’”
As Dolphin Tower’s condominium association board president,
Ryan will have finally received the official certificate of
completion from the city, allowing her to re-enter her once
nearly condemned building as a resident rather than an
embattled leader. That stunning view of Sarasota Bay, just
as it was before her nightmare began, will have been worth
everything she paid to regain it, she says. What she doesn’t
say, but what is undeniably true: No one in Sarasota will
have ever paid as much as Ryan has—physically, emotionally
and financially—for the right to live in her own condo.
On June 24, 2010, sometime between 11 a.m. and noon, Kris
and Rick Mowrey, the managers of the 117-unit, 15-story
Dolphin Tower, came home to their fourth-floor unit for
lunch and couldn’t open the front door.
“It was stuck,” says Rick Mowrey. “We forced it open. I
thought I needed to get some WD-40. We got lunch ready in
the kitchen. Then we noticed that the walls in the living
room were bowed. There were several cracks in the floor;
there were chipped and broken tiles. We went back into the
kitchen and noticed the cabinets were loose from the walls.
I thought somebody had hit a column in the parking garage
with their car.”
The Mowreys, who have since moved to Fernandina Beach, Fla.,
where they now manage another property, had lived in and
managed Dolphin Tower for 10 years. Though they couldn’t
know it then, they would never spend another night in
Dolphin Tower.
“We called David Karins [the building engineer] right away,”
says Kris Mowrey. “I said, ‘The sky is falling.’” She begins
to cry. “We loved it. We’d still be living there.”
“I had been out to Dolphin Tower a few weeks before, been in
there a million times,” recalls Karins, of Sarasota’s Karins
Engineering. “My assistant calls me and says, ‘[Kris] thinks
the building is falling down.’ I said, ‘I doubt that.’ Then
I got there and saw what was going on and I said, ‘You know,
the building may be falling down.’”
Charlotte Ryan, also quickly contacted by the Mowreys,
recalls her shock at seeing the damage in their unit. “The
crack was through the floor. You could put your hand in it,”
she says.
Built in 1973 by the long-defunct Sage Corp. of Hallandale,
Fla., at a cost of $2.5 million, at 101 S. Gulfstream Ave.,
just south of the intersection of Main Street and Gulfstream
Avenue, Dolphin Tower has always been one of Sarasota’s
premier addresses. An advertisement for the building in
January 1973 described its bayfront views and the excitement
over its opening, boasting that 78 units had sold within
just two weeks.
But 37 years later, the engineers and architects of record
were long dead, the original inspection reports and
certificates of occupancy had been destroyed, and the
10-year “construction statute of repose” had elapsed,
releasing the builders from any liability. (Earlier this
year, State Rep. Jay Fant introduced legislation to reduce
the 10-year liability period, which had already been reduced
from 15 years in 2006, to just seven years.)
As he studied the damage in the Mowreys’ unit, Karins
realized he was in a situation that defined the word
“emergency.”
“It was out of the blue. There was no [heavy construction]
work going on nearby, no precipitating event,” Karins says.
“We immediately brought in shoring posts and put them
throughout the first through fourth floors. They acted like
jacks. We believe that arrested the collapse of the
building.” He says he told his workers to install “as many
shoring posts as you can get your hands on.”
Ultimately, Karins and the other engineering firms who would
work on the building installed thousands of temporary steel
shoring posts to hold up the 12 stories of the residential
tower above the three-story parking garage.
The city was called, and the following day, city building
officials and the fire marshal ordered a limited evacuation
of the fourth floor. Five days later, on June 30, 2010, all
residents were given 24 hours to pack and evacuate. Dolphin
Tower was closed to occupancy by the city of Sarasota at 11
a.m. on July 1. The original evacuation notice, yellowed by
time, was still hanging in the building’s entryway this
summer.
On June 30 and July 1 of 2010, TV camera trucks were on hand
to record the mostly elderly Dolphin Tower residents leaving
the building, and the images were broadcast on the Sarasota
and Tampa evening news. Reporters predicted the evacuation
would last from “three days to six months” and repairs could
cost $1 million.
But by July 8, the damaged fourth-floor slab had moved
another half inch sideways, the original crack had widened
and others had appeared. At a meeting that day at City Hall,
Karins told the owners to plan to be out for at least six
months.
All those predictions would prove to be laughably
optimistic. When they evacuated from Dolphin Tower, every
resident—including Charlotte Ryan—had embarked on an odyssey
of uncertainty and waiting that would consume the next five
years of his or her lives.
Theirs is the ultimate Florida real estate horror story, a
cautionary tale that raises the specter of what can happen
when one buys into a condominium—especially an aging one—as
part of an association, and cataclysmic problems arise.
Florida is home to 23,149 condominium associations and
1,516,375 condominium units, more than any other state. Most
of them were built in the last 50 years.
But condominium-style shared living spaces themselves are
nothing new. Historians say such spaces have been with us
since at least ancient Babylon, and they’re well documented
in ancient Rome and in Europe during the Middle Ages.
Condominiums in their modern form began in response to
housing shortages in Puerto Rico in the early 1950s. Puerto
Rico’s Horizontal Property Act of 1958 was the impetus for
the U.S. Congress to authorize the Federal Housing
Administration to insure condo mortgages, making condo
ownership accessible to the masses. By 1969, condominium
laws had been enacted in all 50 states. The first
condominium in Sarasota—some say it was the first in
Florida—was Sarasota Harbor West, built by developer Irving
“I.Z.” Mann in 1963. Florida’s Condominium and Cooperative
Act went into effect that same year. Condominiums soon
sprang up everywhere. Today, there are more than 120,000
condominium associations in the United States and more than
10 million people living in condominiums.
Many of these condominiums are aging and will eventually
require extensive repairs and renovations. In Florida,
thousands of units are as old as—or older than—Dolphin
Tower, and it’s likely that some could also develop
structural problems. Yet few purchasers factor in the cost
of possibly drastic future repairs, and few owners fully
understand how extensive their association’s powers really
are.
Backed by the full force of Florida law, condo associations
have the rights to enforce code over common areas, roofs,
plumbing, electrical wiring and other shared building
structures; to levy fines; and to borrow money or pledge
association assets as collateral in emergency situations,
such as before or after a hurricane.
Florida law gives condo associations a long governing leash.
As long as associations keep public records, adhere to
regular public meetings, and follow their incorporation
documents, their decisions over owners will stand. If most
owners in an association want disco balls hanging in their
building’s common areas and approve it by vote, then there
will be disco balls in the common areas. And if a disco ball
causes an expensive electrical fire, all the owners—even
those who voted against the disco balls—are responsible for
the repair bill. Florida does maintain an Office of the
Condominium Ombudsman to serve as a neutral party in
disputes between boards and individual owners, but the
ombudsman’s powers to intervene are weak.
With her building in a sudden state of disaster, Charlotte
Ryan was about to get a crash course in condominium law, the
powers of condo associations, and all the emotions and
conflicts those powers can provoke.
Like most residents, she says, the only potential threat to
the building she had ever imagined was water damage from a
storm or flood. “I was stunned,” she says. “I never expected
concrete damage. I felt fear, confusion, all of those
emotions. I was enjoying my retirement and it was like I got
a tap on the shoulder by something—I don’t know what to call
it; it depends on your belief system—that was saying to me,
‘You’re not done yet.’”
Ryan, who retired to Sarasota in 2007, had spent a year as a
renter before buying her Dolphin Tower condo in August 2008.
Real estate had been booming all across Florida, and she
paid $475,000, the very top of the market. “That first year
was so much fun,” she says. “It was all the theater and the
ballet.”
Soon after she moved in, she joined a board subcommittee.
“I’ve always been a ‘let’s improve something’ person,” she
says. “I saw that the common areas needed updating, so I got
involved in upgrading the corridors and lobby, and
immediately became chairman of the design committee. A year
and a half later, the problem happened.”
On the day of the mass evacuation, Dolphin Tower’s board
president, Charles Stender, was taken out of the building on
a stretcher with a systemic staph infection. By the fall of
that year, the building’s attorneys warned that a new
condominium board president needed to be appointed, and the
duty fell to Ryan.
“I was the only nonworking person [on the board] at the
time,” she explains.
She inherited a wild storm of bad news, which kept blowing
all through 2011. Forensic engineers quickly determined that
the damage to the fourth-floor slab was much more extensive
than originally imagined, and city inspectors concluded that
the building’s problems were twofold. Not only was the
fourth-floor slab at risk of collapse, but the entire
building fell far below wind-shear standards and even a
low-category hurricane might topple it.
By May 31, 2011, nearly a year after the evacuation, the
Dolphin Tower condo board had spent $1.1 million of its
reserves, nearly half of that ($471,032) on renting shoring
posts, and the other half ($566,412) on fees for attorneys,
engineers, construction consultants and a security company.
They hired the security company after thieves started
removing the shoring posts from the empty building. The
thefts were a double insult: in stealing the posts, which
was crime enough, the thieves also threatened to bring the
building down. In addition, insurance premiums on the
building had quadrupled.
Along with tackling one grim issue after another as
president of the board, Ryan handled communication with all
the residents, planned and ran meetings, met with the
engineers and lawyers, considered all the contracts and bids
and dealt with the city. She often put on a hard hat,
inspecting the damage and repairs firsthand.
In the fall of 2011, the extent of the damage to Dolphin
Tower was estimated at $18 million; the building’s insurance
claim had been categorically denied; and Ryan had to compose
a difficult letter to its displaced residents.
“Dear Dolphin Tower owners,” she wrote. “It is with a heavy
heart that we bring you further news that may render our
burden even heavier.”
To keep the building solvent—a bankruptcy would have taken
Dolphin Tower completely out of the owners’ hands and given
it to the state—owners had to continue to pay their regular
monthly assessments of roughly $550 on the units they were
no longer able to occupy. This would continue for all five
years of the evacuation. Meanwhile, they had to rent other
places to live and pay for storage of their possessions, and
looming over everything was the certainty of a major special
assessment to pay for the building’s repairs, which would
eventually total near $100,000 per unit.
Ryan was pushed into a situation she had never anticipated:
enforcing the board’s decisions about assessments and
threatening late payers—her Dolphin Tower neighbors and
friends—with foreclosure. Keeping owners current in their
payments was important because of Florida’s “Safe Harbor”
statutes—laws meant to protect mortgage lenders. Under these
laws, banks that foreclosed on Dolphin Tower units would be
liable only for the lesser of 12 months of unpaid
assessments or one percent of the mortgage debt. That meant
banks might have to pay as little as $2,000 of a unit’s
delinquencies, and the remaining owners would have to assume
the responsibility for hundreds of thousands of dollars more
of the ultimate repair bill.
“There have been times [during this period] when I had to be
much harsher than my personality,” Ryan says. “When they
bought their condos, whether they knew it or not, the owners
became part of the association. Everyone has a proportional
share in keeping the building maintained. You have to ask
yourself, ‘Do I stay or do I sell?’ That’s your choice.
Someone once said to me, ‘Let the association pay.’ I said,
‘You are the association.’”
“She was harsh and unempathetic,” says one former Dolphin
Tower owner—who asked not to be named. He was forced to sell
because of the mounting costs.
“It’s awful to be called cruel,” says Ryan, who spent long
stretches of the past five years living in Sarasota’s Indigo
Hotel, which offered her and other evacuees deeply
discounted rates. “I’ve always been empathetic; [this
situation] brings tears to my eyes. There was no entity with
a pile of money that could come in and rescue us. If we were
to declare bankruptcy, we would have lost complete control
over the building.”
At Dolphin Tower’s nadir, in the fall of 2011, nearly 30
condo owners were delinquent. “The board will have no choice
but to lien your property and pursue foreclosure if you do
nothing to bring your delinquencies up to date,” Ryan wrote
them. “[Consider] selling at a realistic price if you cannot
afford to stay current.”
From the onset of the evacuation and her first interim term
as board president—she’s since been elected board president
twice by overwhelming majorities—Ryan decided not to
socialize with any of the other owners or engineers or
lawyers involved in the case, to avoid the appearance of
impropriety. “I’m so glad I made that decision,” she says.
“I’ve been invited to people’s homes, for lunch, for dinner.
I say, ‘Thank you, but not now.’ I don’t want to give the
impression of favoritism.”
Foreclosures indeed did happen, which ushered in the now
well-documented period of speculative buying at market lows
in Dolphin Tower. In some instances, speculators were able
to acquire Dolphin Tower condos from original owners
desperate to get out for nothing more than closing
costs—though the speculators were still responsible for the
ultimate special assessment. While some may see the
speculative buyers as vultures, others consider them
saviors.
“The speculators took a chance,” says Sarasota real estate
broker Michael Saunders. “They were savvy and came in when
no one else would. That’s the good kind of flipping. They
did a favor to all the rest of the owners.”
“The speculators stepped up; they paid every cent owed,”
says Ryan. “People who had to sell might say, ‘Oh, they came
in and made a lot of money,’ but I have nothing bad to say
about them.”
One of those speculators is Marvin Kaplan, owner of Linger
Lodge and the Ellenton ice rink, who bought 10 Dolphin Tower
units in 2011, when the building’s future was still
uncertain.
“I saw these units coming available for $30,000 to $40,000,”
says Kaplan. “I said the only way I’m going to get
interested is if I can get involved with the board, because
somebody has to steer this ship. I became the vice
president. Charlotte is wonderful; she must work 70 hours a
week. Without her, I don’t know that this would have gotten
done.”
With real estate heavyweights like Kaplan behind her, Ryan
and the Dolphin Tower board entered into mediation with the
building’s insurance company, Great American Insurance
Group. Represented by Tampa’s Merlin Law Group, they
concluded negotiations with Great American in early 2012
that led to an insurance settlement.
Though the terms of the settlement are guarded by a
nondisclosure agreement, Ryan says, “It was OK, just OK. It
certainly helped.”
Donna DeVaney Stockham, the attorney who represented Dolphin
Tower against Great American, thinks that the insurance
company initially denied the claim because it found that
“[Dolphin Tower’s construction] complied with the code and
practices in effect [in 1973]. There was no construction
and/or design defect and/or hidden defect.” Therefore, she
says, it’s likely the insurer believed it was not liable for
repairs.
But it was also likely the Great American Insurance Group
did not want to risk a trial where jurors would see elderly
and displaced Dolphin Tower residents packing the courtroom.
“I can’t speculate why Great American settled the case other
than settlements are typically based on risk of loss at
trial, cost, the expense to get there, and future exposure
for bad faith,” DeVaney Stockham says.
For its work in the case, the Merlin Law Group took 30
percent of the settlement.
With money in hand, powerful speculators now on its board,
and a clear understanding of what needed to be fixed, the
board took bids for the repairs in the spring of 2012. In
2013, says Ryan, because of construction delays with the
company they had hired, the board put the work out for bids
again and chose Baltimore’s Concrete Protection &
Restoration (CP&R). After further studies, forensic
engineering, and extensive logistical planning, CP&R began
major repair work in May 2014.
“[I’ve] represented many hundreds of condominium
associations over the past 35 years; I’ve never encountered
a situation [as catastrophic as] Dolphin Tower,” says
attorney Dan Lobeck, of Sarasota’s Lobeck & Hanson, which
specializes in representing condominiums and homeowners
associations. “While there are extensive building defects in
other condominiums, such as balcony failures, they are
typically discovered in time to hold the developer and
contractors responsible, not decades later.” He advises that
anyone considering buying a condominium should ask for any
association studies of building defects and determine
whether those defects have been addressed. And, he adds,
“Every condominium association should conduct such a study
while it is still timely to pursue claims, considering the
four-year statute of limitations from turnover of control
from the developer and the 10-year statute of repose.”
An important side note relates to the seven businesses
attached to the building on Palm Avenue, including the
Dabbert Gallery.
Though the businesses do not share a common roof with the
residential tower, their governance by Dolphin Tower’s
association threatened their closure during some phases of
the repair work, something that the final construction plan
was able to avoid.
“We’re fortunate we’ve been able to stay in business,” says
Dabbert Gallery’s David Dabbert. “The contractors said,
‘Just shut the businesses down.’ But Charlotte fought for
us. They made a lot of modifications to the construction
plan, and we were allowed to stay open. We laugh about it
now because it’s over, but it’s been difficult. In the
beginning, we were pretty nervous [about the tower
collapsing.] You’d hear a loud noise and you’d run for the
front door.”
Attorney Morgan Bentley of Sarasota’s Bentley and Bruning
represents the Loevner Partnership, which owns the Dolphin
Tower commercial spaces the seven businesses occupy. For a
short time in 2011, when forced closure of the businesses
seemed imminent, the Loevner Partnership went delinquent on
its association fees as a bargaining chip to keep the shops
open, though the issues have since been amicably resolved.
“It was all Sandy [Loevner] and Charlotte,” says Bentley.
“They were threatening to close the shops for a year and a
half, and [Sandy and Charlotte] would get together and talk.
We would have a meeting and it would go nowhere and then
they would exchange emails and it would get resolved. I’d
like to take credit for more, but it was them.”
All the necessary city demolition and reconstruction permits
have long since been issued, thousands of yards of concrete
have been poured and set, the building’s wiring and piping
systems have been thoroughly updated, and the work to bring
Dolphin Tower up to code is now finally done.
CP&R, the engineering firm that finished the work in
February 2015, has submitted the project for a national
concrete restoration award. “The final cost came in at $8.8
million,” says CP&R’s Michael O’Malley. “I’ve been in this
business 25 years. This was a once-in-a-lifetime project.
You just don’t see things like this.”
Hytham Bakr, of the Sarasota engineering firm Bakr Group,
has been Dolphin Tower’s project manager and owners’
representative throughout the ordeal. He says of the
restoration work, “Imagine taking a body and replacing the
liver, the heart, the arms. The building is [now] very
solid; it’s hurricane improved. Internally, it’s totally
new. You have a very solid structure foundation-wise, and
you have a waterfront building that’s unmatched.”
But the mystery of why Dolphin Tower’s fourth floor cracked
remains.
“What caused it?” asks Bakr reflectively. “It was built in
the ’70s, and this happened 35 years later. There are
different theories—the steel was too close to the surface
[of the fourth-floor concrete slab], the steel [rebar] was
too close to each other, there wasn’t enough concrete
between the steel—the theories are endless. The only term
you can use is ‘bad luck.’ It’s similar to when you buy your
house and have an inspection and everything is fine. Five
years later, the house settles and you have cracks in your
foundation. What are you going to do?”
David Karins of Karins Engineering agrees. “There’s no
smoking gun,” he says. “It’s like an airplane crash, a big
series of events. It’s hard to pinpoint just one.”
With the work finished, Marvin Kaplan has sold most of his
10 units for a tidy profit. “With Dolphin Tower’s location,
[its prices] could double every five years,” he says.
Saunders adds, “It’s in the center of everything, it’s got
great views. The building has been engineered to death. We
would have no hesitation sending our clients there.”
But none of that matters much to Charlotte Ryan. “People ask
me, ‘How did you do it?’” she says. “The greater the crisis,
the more calm I became. I hope and pray for all of Sarasota
that this doesn’t happen in another building, but I’m not so
sure it won’t. There are tough business decisions that have
to be made by condominium boards. Condo boards have huge
responsibilities, much, much more than people realize.”