By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
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By Kyle Swenson
The ceiling in Iris Pollack's apartment, just inside her front door, appears to be falling down. The petite redhead apologizes for the mess, embarrassed but also outraged by the peeling plaster and the water stains around the living room. "Every time it rains, the ceiling leaks," she sighs. "I have to lay towels and a bucket on the floor. I'm lucky I have tile."
The stains are incongruous in this otherwise immaculate penthouse apartment on the 24th floor of the north tower at Sunset Harbour, a massive bayside condominium complex just north of the Venetian Causeway in Miami Beach. Pollack's faux-painted walls and baby-grand piano frame a sun-drenched view of the Beach and the Atlantic Ocean -- the very picture of luxury living Iris and husband Fred Pollack bought into more than four years ago.
But it turns out the picture was drawn in pencil, not indelible ink, and residents allege it is steadily disappearing under the eraser of one of Miami Beach's largest developers. A long and unusually bitter battle is under way between the residents of the roughly 500 condo and townhome units at Sunset Harbour and several companies that operate under the banner of Pacific International Equities and a related trade name, Groupe Pacific. In addition Sunset Harbour's north tower, which was never granted a certificate of occupancy despite being home to hundreds of residents for several years, has become a major headache for the City of Miami Beach.
The condo association for the north tower is suing Pacific International Construction and Yacht Club Southeastern, two of the companies responsible for developing the tower, and their founder, Charles Bedzow. The companies are now controlled by Bedzow's son Michael, a former real estate attorney.
The north tower's complaints include balconies so unstable the city has deemed them unsafe for residents to use, windows and glass doors unlikely to withstand a stiff breeze, and major plumbing and concrete problems. Residents also discovered that the amenities in their homes -- from supposedly extra-insulated "party" walls to thermostats to security systems -- were not installed or were constructed with inferior materials.
In 1997, as residents began moving into the north tower, accusatory memos were flying back and forth between Pacific International Construction and the contractors hired to build the tower. For example, Pacific wrote to project engineer Raul Puig alleging that the corners of some balconies were cracked and breaking off because of inadequate steel reinforcement. Michael Bedzow complained to DCC Constructors, the project manager, that the subcontractor who installed many of the building's windows and glass doors had left large gaps between the frames and the building that could cause problems with "support, hurricane and windstorm viability, and water leakage." While acknowledging that the Sunset Harbour north tower was rife with construction problems, Bedzow placed the blame for most of them squarely on DCC's "poor management and lack of control."
DCC, in its own memos, charged that a major factor contributing to the problems was Pacific's delays in paying subcontractors. (In a 1997 memo titled "Lack of payment to subcontractor," a DCC manager complained to his boss: "As you know, this problem is and continues to be one of the main factors in manpower to complete our T.C.O. dates.") Pacific International later sued DCC and several of those subcontractors.
It wasn't until March 1999 that the north tower's balconies were judged to be so dangerous the city notified residents not to use them "until clearance from the building department is provided." As of this week, nearly three years later, residents are still waiting for the city's approval. (Owners of Sunset Harbour townhomes and south tower condos have their own grievances, though they are not as numerous or as dangerous as those associated with the north tower.)
The north tower condo association claims in its lawsuit that Charles Bedzow and his companies violated building codes and engaged in unfair and deceptive trade practices and racketeering. Strong language? Not really, says James "Fred" Harrington, the attorney representing the condo association. Besides the glaring construction defects, Harrington maintains residents were falsely told Sunset Harbour would be a complete living community that would include bayfront shops, a restaurant, a spa, and a private gym. He pulls out dozens of splashy ads to prove it. "There's no bayfront shopping," he says. "The private gym that was supposed to be there? The developer converted that to apartments and sold it. All the retail shop spaces? The developer sold all those. The health spa was not opened until [early 2001], and people had been living there four or five years. The restaurant was never installed."
Pacific counters that it was unsuccessful in attracting retail stores and a restaurant to the bayfront spaces because there's no street frontage and not enough parking.
All this squabbling has been hard on residents like Linda Arama, a 55-year-old outpatient manager at Mount Sinai Medical Center who bought a one-bedroom condo in Sunset Harbour's north tower with the idea of eventually retiring there. "We were told a song and a dance and lied to," she grumbles. "I took every dollar I had and sunk it into this place, around $150,000. There's a lot of people like me here who don't have money." Arama, who sits on the condo board, also believes the city has been negligent in allowing the developer to go years without fixing the building's problems. "The city allows [the Bedzows] to get away with this," she rails. "Builders need to be slapped by the parent when they don't do the right thing, and the city is the parent we rely on to protect us."