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Nov 24, 2009 5:54 pm US/Central
Lake Calhoun Condo Owners Sue Developer
MINNEAPOLIS (WCCO) ―
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A condo owner shows places where the beams are falling apart in pieces.
CBS
Nearly 100 condo owners are fuming after they say their buildings' developer duped them.
At least four condominium associations are suing developer and former condo association director Clark Gassen and his business partners in his former company Financial Freedom Realty for not disclosing major structural damage.
The rehabbed buildings are in the trendy Uptown-Lakes neighborhood and the damage homeowners discovered will now cost them millions to fix.
"When we first walked through it was absolutely gorgeous," said condominium owner Jeff Recker.
Plenty of first-time home buyers in condos at Lake Calhoun were equally impressed with the upgrades, which transformed old apartments into contemporary condos.
"Obviously, part of the appeal here was the granite countertops, cherry wood cabinets, stainless steel appliances, great hardware, just a really, really great uptown feel," Recker said.
Gassen converted the apartments to condos three years ago. Back then, he was featured in the New York Times for doing the same to 100s of Minneapolis units. But buyers soon found out not all that glitters is gold.
Recker picked up pieces of their condo's beams in the garage that are falling apart. Homeowners say water is eating away the garage and it floods frequently. The 1960s boiler needs to be replaced.
"It breaks down quite a bit in the winter," Recker said. "It's on its last leg."
Owners say windows are so old and crumbling they need to be duct taped together.
The cost of repairing and replacing the damage?
"Approximately $1.7 million," said former condominium president Zach Wright.
With double-digit association fee increases each year already and reserve money gone, the condo is now suing the developer.
"Those desperate to sell find they can't because of the depressed market and the lawsuit is keeping banks from lending to potential buyers," Wright said. "I know a lot of people reached the end of their rope."
The attorney representing Gassen and others named in the suit said since the lawsuit is just going into litigation and that it would be premature to make a comment about it at this time.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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