Carillon South tower condo owners sue Z Capital for accounting records
The 580-unit project was assessed $17.3 million in 2015, or an average of $29,877 per unit
April 08, 2016 04:30PMBy Ina Cordle
The Carillon Miami Beach
Condo owners at the South Tower of the Carillon in Miami Beach have sued Z Capital, the owner of the project’s amenities, demanding access to financial records tied to millions of dollars in assessments.
The South Carillon Beach Condominium Association filed suit last week in Miami-Dade Circuit Court against Z Capital Resort. The private equity firm had bought the property at 6801 Collins Avenue, formerly called Canyon Ranch, out of bankruptcy court, in January 2015. The project’s condominium associations had originally opposed the bankruptcy auction results and had filed a lawsuit against the bankruptcy debtor.
Z Capital paid $21.6 million for the Carillon Resort & Spa and immediately installed new management — a joint venture led by Z Capital’s Thomas Wicky, who previously managed The Breakers in Palm Beach, as well as Adrian Zecha, founder of Amanresorts and GHM Hotels, and Jonathan Breene, developer and creator of the Setai South Beach.
The Carillon, whose original hotel dates back to 1958, now includes two condo towers completed in 2008: the South Tower and North Tower, as well as the Central Tower, which has both residential units and hotel suites. Z Capital owns nearly all the project’s amenities and common areas.
The lawsuit surrounds the South Tower’s assessments, which totaled $4.38 million last year, part of $17.3 million assessed to the project in 2015, according to the suit. In all, the project has 580 condo units, so the condo unit owners were billed an average of $29,877 per unit. On a monthly basis, the South Tower assessments average $2.01 per square foot.
According to the suit, the South Tower’s condo association made several requests to inspect and audit Z Capital’s facilities records since last fall. Finally, on Dec. 1, Jennifer Kramer, a lawyer for Z Capital, sent a letter saying the books and records would be available. But she set various conditions, the suit said, such as that only board members could view them — not the association’s lawyers or accountants — and that no copies or photographs could be taken.
On Dec. 22, an inspection meeting was held, but only four reports, each only several pages long, were available for inspection. Original books and records for the entity related to the shared facilities were not provided, and Z Capital has refused to produce further records, according to the suit.
“Without the ability to audit the facilities records, plaintiff and the owners of the units in the South Tower are being denied the right to determine whether the multimillion dollar assessments they are required to pay to Z Capital are being properly assessed, calculated and authorized pursuant to the master declaration,” the suit said.
Z Capital did not return a message from The Real Deal left at its company headquarters in Lake Forest, Illinois.
The suit asks the court to rule that Z Capital must produce the records, including detailed general ledges, cash receipts, cash disbursement and payroll journals, and other documents that would show the actual expenditures for the shared facilities. It also asks the court to allow the homeowners’ association to use an auditor to conduct and audit of the facilities records, as well as make copies of the documents.
No hearing date has yet been set.
Source: The Real Deal