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

Apr.April 08, 2016 04:30 PM

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.

Related Articles

From left: Don Peebles and Michael Swerdlow(Credit: Swerldow Group)

Overtown project in turmoil: Peebles sues for $175M, closing delayed, Terra quits

Eric the Jeweler suing Mondrian South Beach owners

Eric the Jeweler blames Mondrian South Beach owners for $2M heist: lawsuit

Howard Wurzak’s development firm is suing over delays and defects at the double branded Dalmar and Element hotel

Fort Lauderdale hotel developer sues Tutor Perini, seeking nearly $12M for alleged delays, defects

Ernesto Weisson and Roberto Cortes allegedly ran the Ponzi scheme with a third partner, Juan Carlos Cortes (not pictured). (Credit: Ocean Reef Club)

Latin American investors allegedly lost $250M in Miami real estate Ponzi scheme: lawsuit

Bradley Colmer, a Sunset Park rendering and 1349 Dade Boulevard (Credit: Domo Architecture and Design and Google Maps)

Judge’s panel rules over Beach Towing and Deco Capital Group’s fight over Sunset Harbour project

Muse Residences and PMG Managing Partner Ryan Shear (Credit: PMG)

PMG, S2 score victory in legal battle at Muse Residences

Verzasca Group’s Le Jardin Residences, Darius Kasparaitis and Tim Lobanov

Verzasca Group’s Le Jardin Residences resolves bankruptcy

Maria Penaloza

So Flo Real Estate Group sued over spam text messages