Make us your home page
Instagram

Some Towers of Channelside buyers want deposits back

BRIAN CASSELLA   |   Times
Scott Newberger is trying to get his deposit of $50,400 back after a disappointing walk-through.

BRIAN CASSELLA | Times Scott Newberger is trying to get his deposit of $50,400 back after a disappointing walk-through.

When the Towers of Channelside luxury condo developers filed for bankruptcy last month, they mostly blamed the 168 buyers who put down 10 percent deposits but never followed through with the sales.

Two-thirds of the buyers walked away from their deposits, ranging from $30,000 to $100,000.

Some, it appeared, couldn't get financing for condos that cost about $275,000 and up; others were shy about closing in a shaky housing market, developers said in court documents.

Several buyers, however, have come forward with another side of the story, one of broken promises and slow construction. A few have filed lawsuits; others are in a war of letters with the developers, hoping to get their deposits back.

John Madiedo, who owns a local insurance company, put down $74,000 on two units (one for him, one for his son) and hoped to move in by late 2007. But as construction went on and the developers seemed antsy to finalize the sales, "things just didn't smell right and sound right," he said.

"This was a house of cards," Madiedo said, "and when they started pressuring people to close, that's when scares started happening."

Scott Newberger also is trying to get his deposit, $50,400, refunded. "People didn't just decide not to close," he said. "We went there and looked at the building and we were like, 'Hell, no.' "

• • •

At the peak of the real estate boom, Towers of Channelside looked like a fantastic investment, if not a chic place to live. The elegant drawings of the 29-story twin towers and floor plans of the 257 units were enough to sell all the condos before the project broke ground.

"I was very excited," said Newberger, a 44-year-old Tampa banker.

But after putting down his 10 percent and signing a contract in 2004, a series of events soured his taste for the project.

In March 2005, he received a new contract that was amended to extend the construction time from two years to three, though the amendments were not clearly highlighted, he said.

The sales office kept sending paperwork and notices to an old address, he said, despite several calls and e-mails informing the office that he had moved. Newberger suspected they were doing it on purpose to keep him uninformed.

Then, in August 2007, the sales office sent him a letter to set up a preclosing walk-through, but then rescheduled because the unit wasn't ready, he said.

In September, he did the walk-through and found unfinished drywall in the lobby, a concrete pit where the pool was supposed to be, and problems with the elevator and common areas, he said. He sent a certified letter saying he wasn't ready to close but says he never heard back.

Newberger began getting letters that said he would be in default of the sales contract if he didn't close quickly because he had already done the walk-through.

In the meantime, he kept writing the sales associate and developers to find out where his $54,400 was being held in escrow. He wanted to make sure the money had not been released to the developers because he was disputing the contract.

Newberger eventually learned the money was with U.S. Bank. He remained frustrated, though, because he said a manager there wouldn't give him details about his escrow.

Then, on Jan. 25, Towers of Channelside LLC filed for bankruptcy protection, claiming $50-million to $100-million in debt, $58-million of which is owed to the lender, Wachovia Corp.

Developer Michael McGuinness said he could not comment on Towers of Channelside. His partners, Brad Hite and Rich Sacchi, could not be reached. The sales associate, Becky Lane, said she no longer works for Towers of Channelside and could not comment because of the bankruptcy case.

Nine lawsuits

The Towers' bankruptcy filing has stalled nine lawsuits filed against the project in the past year.

Two were filed by attorney Brett Wadsworth, who represents Peter Hoobyar, Nicola Hoobyar and Clarence Rowland, buyers who never closed. He plans to go forward with the cases once the automatic stay, or protection against debtors, is lifted in bankruptcy court.

The lawsuits include accusations ranging from misrepresentation and fraud to breach of contract, Wadsworth said. He contends that the condo developers violated the Interstate Land Sales Full Disclosure Act, which protects property buyers from being misled.

His clients are upset because their units were issued certificates of occupancy by the city, although construction was ongoing inside the Towers buildings. According to their contracts, once the certificates were issued, the buyers were obligated to close on the condos.

"There are certain procedures a developer must follow if there are a certain number of units. … And it is our position that the C.O. should not have been filed without sufficient completion of the building's construction," Wadsworth said.

Bob Bass, the city's chief construction inspector, said certificates of occupancy can be issued for condo units even though construction and landscaping are ongoing.

Some buyers, though, say the incomplete work was enough to make the building unsafe.

Newberger thinks he has found enough evidence to force the developers to give back his deposit without a lawsuit.

Madiedo said he doesn't want to pour more money into getting back his $74,000, but also doesn't want to give up without a fight and may eventually sue the Towers.

The cases could take months, or even years, to resolve.

A lawyer told Madiedo the case would cost $25,000 or more to pursue. He is just grateful that he didn't spend more than $700,000 on two condos that could be mired in construction delays and court battles.

"This project," Madiedo said, "is a blemish on the business landscape in this community."

Emily Nipps can be reached at nipps@sptimes.com or (813) 226-3431.

Some Towers of Channelside buyers want deposits back 02/28/08 [Last modified: Thursday, February 28, 2008 5:01am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]