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HOT MARKET: Condo owners battle over selling to developer
For 20 years, Stephen Norris has lived in a modest condo in pretty Seaway Villas, a low-slung 1930s building with a primo spot right on the beach in Surfside.
But a majority of his fellow condo owners, most of whom don’t live in the building, have accepted buyout offers from a big developer that will make many of them rich. And now, because of a controversial loophole in Florida condo law, Norris — who says he doesn’t want to sell — could be forced out of his home. Two other holdout owners who don’t live in the two-story garden-style building, including a Bal Harbour council member, would also be compelled to sell.
As the holdouts cry foul, the battle over little Seaway Villas has blown up into a saga replete with allegations of conspiracies and high-pressure tactics by some eager-to-sell condo owners and developer Fort Capital Management, questions about the role played by development-friendly town officials, and a last-minute intervention by Miami-Dade County historic preservation officials — who say the 1936 building, the first apartment house in Surfside, qualifies for protection as a historic landmark.
The payouts from Fort Capital range from the high six figures to more than $1 million depending on unit size, several owners say. That represents a substantial premium over the market value of the condos, which according to the county appraiser’s website range roughly from around $150,000 to over $300,000. The payout would be especially rich for a handful of owners who control multiple units.
The willing Seaway sellers and Fort Capital officials contend the holdouts are not interested in historic preservation, but are using the process to “extort’’ a bigger payout from the developers, an allegation Norris and Cohen strenuously deny. Conaghan called Cohen and Norris “deadbeats’’ who refused to pay a substantial assessment for major repairs a couple of years ago — though both say they are in litigation with the board, which they claim improperly handled the project.
The sellers and Fort Capital also claim the building, which passed a 40-year certification just two years ago, is in bad shape and needs extensive maintenance that most owners and the association, which they contend is broke, can’t afford to pay for — even though most of those owners have homes somewhere else and many rent out their units.
“There is no doubt this will change the lives of the majority of these residents. This is more money than they have ever seen in their lives,’’ said Brian Campbell, an investor and businessman who owns two units in the building but lives in Brickell. “It’s a tremendous windfall, a great good fortune.
“There is no doubt the building is a ticking clock of maintenance issues. The building is going to fall further in disrepair. If they can’t sell, what are these people going to do?”
Just how much is at stake financially? Campbell and a group of other owners hired powerhouse zoning attorney Lucia Dougherty of Greenberg Traurig to represent them. Dougherty, whose appearance at a historic preservation board meeting this week raised eyebrows, more typically represents big developers in permitting projects worth hundreds of millions of dollars.