WEST PALM BEACH — The
board of directors of a waterfront condominium in West Palm
Beach that has been embroiled in years of convoluted, costly
litigation has voted to settle five lawsuits, potentially
paving the way for construction of a multistory yacht club
The settlement between the 132-unit Waterview Towers condominium at 400 N. Flagler Drive and Leisure Resorts LLC calls for both parties to dismiss lawsuits dating to 2014
Palm Harbor Marina, home to some of the largest yachts in the world, is part of city-owned property, along with the Waterview Towers condominium on the Flagler Drive waterfront in downtown West Palm Beach.
Heymann is one of five
condo owners running for a seat on the nine-member board of
directors in March. He’s hoping that if he and enough other
opponents of the settlement win seats, they can stop it.
Orders of dismissal, however, already have been entered in
all five court cases.
The origins of the dispute began in 1968, when the city leased three contiguous parcels of waterfront property to the late Connecticut developer David Chase. The land is now occupied by Waterview Towers, a 1.5-acre parking lot and the adjacent Palm Harbor Marina. The Chase family’s Leisure Resorts Inc. and the city amended the 99-year lease in 1979, and Waterview Towers was built two years later.
Leisure sublet the parking lot portion of the lease to an affiliate, Palm Harbor Hotel LLC, which in 2014 filed a site plan for an eight-story hotel and a three-level parking garage. “The parties have been fighting ever since,” wrote a judge six years later who was presiding over the litigation that followed.
That fighting — played out in circuit and appellate courts — has included disputes over who has control of development and expansion of the parking lot and the marina.
When the city granted a riparian easement to Leisure for expansion of docks at the marina, for example, Waterview argued it couldn’t legally do so without its permission. It also pointed out that any structure on the parking lot was initially supposed to be limited to four stories.
In June 2018, the parties reached a mediated global settlement in which the city would end the 99-year lease, give the condo residents title to their property and pay them $2.5 million for a sidewalk that is between their building and the marina. It would have ended Waterview’s claim to have control over the marina. The settlement was never finalized.
That’s because the parking lot and marina portions of the lease, like that of the condo residents, were part of the Waterview condo association and accounted for about 4% of the group’s budget. The global settlement, however, separated the commercial parcels from the pact, creating a partial termination of Waterview Towers. This required an enabling amendment to the condo’s foundational documents — called a declaration of condominium — and would possibly curtail those revenues.
Former association board president Gerald Waldman and another condo owner blocked the settlement, contending in a lawsuit that the enabling amendment required 100 percent of owners’ approval. It fell short on a tally of 127-3, with two owners not voting.
New yacht club would have rooftop pool and bar, restaurant, private dining club, up to 40 'overnight suites'
The new settlement doesn’t separate the commercial parcels from the residential piece, and therefore doesn’t affect their contributions to the association’s budget, Levin said. It was approved by the current Waterview association board and because it doesn’t amend the founding documents, it only needs the board’s approval and not that of every Waterview owner, he said.
In the words of the settlement, the association “has the right and authority to settle and/or resolve claims that are common to all residential unit owners” who are bound by its settlement decision.
Waldman is unconvinced. “I think based on our lease with the city, three courts have now ruled that we all are co-lessees, so whatever the association does, everyone still has individual rights,” he said. “They couldn’t settle or give away everybody’s property rights. That’s my opinion.”
Waldman was noncommittal on what he will do next. “My plans going forward, I haven’t decided.”
Waldman, a Washington, D.C. developer, was the association’s president from 2014 to 2018 and has been a central figure in the condo conflicts. He has filed suit over the years against the city, Leisure and the condo association. As the board’s president, he led it into a “protracted legal quagmire,” acting out of “spite and resentment” stemming from his failed effort to get board approval for floor-to-ceiling windows in a unit he once owned as an investment, the association asserted in a court filing last year.
Not true, Waldman said. “Essentially, I was protecting everybody’s property rights and still am.”
Under terms of the Waterview-Leisure Resorts settlement, the proposed yacht club is to be built on a parking lot immediately south of the condos — where some three-bedroom units are listed at more than $5 million. It would be no more than 75 feet tall with a rooftop pool and bar, a first-floor restaurant, a banquet facility, a private dining club and up to 40 “overnight suites” and two residences. Waterview condo owners would get a free lifetime membership to the club.
“They call it a yacht club — it’s a hotel,” Heymann said.
The agreement also states that Waterview will publicly support the yacht club if asked, and not challenge its applications for permits and approvals, including variances.
Waterview's resident hostilities:
'Half the people hate the other half'
The lawsuits have been costly to all parties. “None of the residents acquired their units in the hope that they would be asked to pay millions of dollars of legal fees to fund years of complex litigation — particularly where the possibility of financial recovery is uncertain,” the condo association and Leisure said in a court filing last year.
The association levied special assessments for legal fees and used money that would have been earmarked for its capital expenditure reserves for litigation expenses. Waterview had spent $1.8 million on litigation fees and costs as of May 2018, according to court records. The total now exceeds $3 million, said Waterview resident Heymann, who is an accountant.
Nowadays, Waterview has problems with elevators, concrete falling in the garage onto vehicles, steel pipes breaking and flooding units and “people are losing their insurance” as a result, Heymann said.
The litigation acrimony has extended to Waterview residents personally.
In January 2019, Waldman sued the Waterview condo association and five board members individually for defamation over its allegations that he had conducted litigation in secret, created a “self-perpetuating litigation machine” and generally acted to the detriment of the association when he was its president. Four years later, the case remains active.
One of the condo board’s former directors, Melissa Parker, sued Waldman for cyber stalking/stalking in March 2020, even alleging that he retained two private investigators to dig up dirt on her. The case was later resolved.
If anything, tensions have worsened. “The building, it’s kind of a toxic environment. Half of the people hate the other half,” Waldman said.
Heymann speaks of “an environment of intimidation.” Waterview Towers, he said, has “become a pretty hostile place.”