After failed talks, Centennial condo owners renew suit against city, county, and APCHA
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The Centennial Homeowners Association is renewing its litigation against three government entities to hold them financially responsible for structural repairs the organization blamed on “decades of water damage caused by shoddy construction and poor design.”
A statement issued Wednesday evening by the association said its members had voted to unpause the litigation. The suit was filed in December 2015 against the city of Aspen, Pitkin County, and the Aspen-Pitkin County Housing Authority.
The units are owned by locals who qualified for ownership under APCHA’s category-housing rules. They are not part of the Centennial apartment-rental complex that also is affordable housing.
According to a joint filing made Wednesday by a Boulder lawyer on behalf of the city and APCHA, and John Chanin for Centennial, “The Parties have considered multiple settlement concepts, but none have proven acceptable to all parties. As a result, the Parties believe they have exhausted their attempts to negotiate a resolution and will now resume the litigation.”
In the meantime, the projected repair costs continue to climb, the association’s statement said.
The same firm hired by the city in 2013 that determined the repairs would cost $3.24 million, in a 2022 reassessment, put the cost “between $9 (million) and $11 million due to worsening rot and sharply increasing construction costs,” the statement said.
“The lack of flashing over windows and doors, venting in attics and crawl space, and vapor barriers around frames is not a maintenance issue,” Long said in a statement separate from the interview. “We have maintained a strong capital reserve maintenance budget, while also adding more assessments to homeowners to pay for emergency repairs … but our buildings are still falling apart.”
The lawsuit had been on hold since the sides agreed in October 2019 to negotiate out of court.
The association’s statement said it would pursue the lawsuit’s lone surviving claim, which asks the court to rescind or amend the deed restrictions on Centennial’s 92 ownership units. The claim so far has passed the scrutiny of a district judge and the Colorado Court of Appeals.
Terminating or altering the deed restrictions, the association has argued, would allow Centennial owners to recoup whatever money they put into the repairs if and when they sell their units. The owners are not amenable to paying out-of-pocket for the repairs because the deed restrictions on their properties preclude them from recouping such expenses if they were to sell their units.
”The Defendants here cannot have it both ways,” said Centennial attorney John Chanin in a statement. “They cannot both refuse to fund the repairs and enforce deed restrictions that prevent the HOA from financing the repairs itself.”
Lifting the deed restrictions also would eliminate the caps on the units’ resale value that includes qualifying capital improvements and the lesser of an annual percentage rate of 3% or the consumer price index. In other words, the units would become free-market and multiply in value.
In separate interviews Thursday, board members Jason Cosic and Dios Long said the homeowners aren’t seeking a jackpot, and they’d rather settle out of court than go to trial.
“We don’t want to make these condos unaffordable for future owners, but for the 92 owners living there, they’re saying ‘Whatever it costs to pay for this, you’re paying for that out of pocket,’” Cosic said, adding that last three mayors, including the current one, have offered lip service but not much more.
He added that he’s not arguing for a total lift of the deed restrictions if they can reach a differently styled agreement.
“I don’t think it’s black and white, and I don’t know what will happen if it is all or nothing,” said Closic. “But with all of these meetings we’ve had over the last 14 years, there was no budging with the deed restriction.”
Their experience so far in the negotiations led the homeowners to lift what in legal speak is known as a “stay” and proceed with the lawsuit.
Mayor Torre said he’s not giving up on a resolution.
“The city of Aspen and I have been at the table for over a dozen years, and we have always tried to craft a solution with a partnership between the county, APCHA, and Centennial,” he said.
He said the city wasn’t involved in the construction of units, but “we are still at the table trying to find a partnership and solution in this issue.”
The HOA’s statement alleges the Centennial ownership and rental units were built in 1984 “by an inexperienced developer on a shoestring budget in a deal with Pitkin County to provide affordable housing for employees. … The City received the Centennial complex property (rentals and ownership property) from PItkin County in the 1980s without any subsidy and with zero outlay of public funds. It was all built with private money, constructed so cheaply that it could be sold at affordable prices before it came under the governance of APCHA.”
The city’s latest offer was to buy the Centennial parking lots and lawn areas to build more housing units. The HOA rejected the offer because “it is unreasonable to fix this systemic problem on the backs of the current 92 homeowners,” the Centennial statement said.
The HOA also has spent $1.5 million on repairs, in addition to annual maintenance, the statement said.
The HOA’s other five claims sought a declaratory judgment and relief from the court to find the defendants liable for the Centennial’s repairs. District Court Judge Anne K. Norrdin dismissed those claims on the grounds of the Colorado Governmental Immunity Act but upheld the rescission claim in an October 2017 ruling.
“All we want is to sit down with public officials in a fact-based dialogue, so we can discuss realistic solutions that will preserve these valuable condos for future generations. We don’t want an angry, expensive legal trial,” Long said in a statement.
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