The developer of Ten Museum Park, a high-rise condo building in downtown Miami, promised potential buyers luxury amenities, including services by the celebrated Clinique La Prairie spa.
But after moving in, a group of owners claimed the 50-story building didn’t live up to the high-end standards touted by the glossy 2005 marketing campaign. They filed a class-action suit in Miami-Dade Circuit Court in 2010.
After more than two years of litigation, the parties reached an agreement last month, with Circuit Court Judge Spencer Eig approving a settlement. Miami developer Gregg Covin agreed to pay $587,500 to the condo association, according to court documents. The money would be used to improve the common areas of the 200-unit tower, which was supposed to be one of Miami’s most exclusive buildings.
“Initially, we were seeking individual damage for each unit owner for what was delivered versus what was promised,” said attorney Michael Schlesinger, who represented the owners. “But we compromised by agreeing to represent a class of all owners. It was in the best interest of all the owners to have the money go back into the building.”
The association is due to receive the bulk of the funds this week, said Schlesinger, with Schlesinger & Associates in Miami. Nearly $150,000 is earmarked to pay Schlesinger’s fees, according to court documents.
‘Building Is Beautiful’
Covin finished the high rise in 2007 and the units began closing soon after, before the housing market collapsed.
Covin said there is nothing wrong with his project. He said he agreed to the settlement to avoid further costly litigation.
“The building is beautiful and isn’t missing any amenities,” he said. “We would have won in court, but it would have cost a lot of money.”
He blames the lawsuit on a “disgruntled group of people who didn’t get to flip their units” before the housing market crashed and property values plummeted.
Ten Museum Park owner Candace O’Brien said the settlement money won’t be enough to add some of the things promised in the colorful brochures, including private cabanas, therapy pavilions, saunas, plunge pools and attractive landscaping.
Instead, the money would go to pay for basic upgrades, she said.
“We are putting the money to the best use possible, said O’Brien, a full-time Ten Museum Park resident. “We need to have a lobby that is finished and need to make some improvements to the pool deck.”
O’Brien is resigned to living without the quality of the spa and wellness center once hyped by the promotional material.
Armin Mattli, the late founder of Switzerland-based Clinique La Prairie, was part of the development team and brochures said the project would offer “white-glove service” exclusive to “Clinique La Prairie Lifestyle Residences,” according to the lawsuit. They also promised that residents would receive “endless pampering by the expertly trained Clinique La Prairie staff … [and] whether pool-side in the Sky Garden or within the posh environment of the Wellness Center, [each resident] will experience the Swiss passion for perfection.”
Members of the class action lawsuit said the spa they got was nothing like was promised.
Hazel Goldman, a former unit owner and a class action member, said the settlement won’t compensate for the money she believes she lost because of the developer’s alleged broken promises.
Goldman bought her 1,802-square-foot condo for $770,000 in October 2007, according to Miami-Dade property records. She sold the condo for $520,000 in June 2011, according to county records.
She attributed part of the loss to the ailing housing market and part to subpar amenities.
“The market hurt it,” she said. “But it never should have done as poorly as it did. If it had been properly finished, I would have never lost this kind of money. The building is a joke.”
As part of the settlement, Goldman would get up to $2,500 in compensation since she no longer owns a unit in the building.
Covin said he was ready to settle with the owners more than two years ago, when the lawsuit was filed.
“They would have gotten a $1 million if they had settled with me two years ago,” he said. “Instead, they kept fighting.”
He said the lesson is that condo associations should try to settle with a developer “right away” because the money set aside for a settlement is spent in legal fees as the fight drags on.
Schlesinger said Covin never offered his clients that much money.
“That number was floated by the developer nearly three years ago but it was never officially presented to us,” he said. “The only offer that was presented to us was significantly lower than that, which was rejected.”
Schlesinger said the developer declined to meet with his clients and the condo association early on in the case to try to reach an agreement.
“That meeting was rejected until mediation was held years later,” he said.
The parties met in mediation and reached a tentative agreement in September.
O’Brien said she is happy the litigation is over.
“It was a long hard road and the developer did not make it easy, but Schlesinger was tenacious,” she said. “So it is good to have it behind us.”
This experience has taught her a lesson that she hopes other will learn from it.
“Be very careful about any kind of pre-construction purchase and look very closely at the developer, … who they are and what they have accomplished,” she said. “Some are better than others.”