Meanwhile, money problems and lawsuits are quietly wreaking havoc on the project. Last November, Tao construction lender Corus Bank took the project back from developer Harry Weitzer and his partners at J.I. Kislak. By then, some of the construction still hadn't been finished, and none of the buyers had closed on their deals. Although the building is now finished, sales have not improved much since the bank took over. By mid-June, just 33 units in the building had sold and closed, according to property records. Meanwhile, Corus, which was a lender on at least 16 South Florida condo projects, is facing serious troubles of its own. Treasury Secretary Timothy Geithner has given the bank a June 18 deadline to raise more capital or face receivership.
George Guatarre, president of the Corus bank subsidiary W/K Sawgrass, which took over the project, responded to a call to his Chicago office this way: "I'm probably not the right person to talk to. We have someone managing the project. I'll have someone call you back." No one did.
Van Gorder, whose company is based in Miami, says Tao recently received Fannie Mae mortgage approval — which should make it easier for buyers to get financing — and "closings are going very well." But she refused to release any information about how many units have closed or been occupied.
Some Tao buyers have filed lawsuits in Broward County to get their deposits back, alleging a breach of contract because their units weren't ready by the February 2008 completion date. Others are still trying to negotiate lower prices.
Oswaldo Mateus and his wife were among the first people to buy at Tao two years ago, putting down a 20 percent deposit on a $300,000 unit. They planned to move to Tao after selling their house in Boca Raton. When their condo wasn't ready by February 2008, their lawyer sent a letter to the developer, Weitzer/Kislak Sawgrass, asking for their $65,000 deposit back. But the company refused the request. Now Mateus and his family have moved to Bogota, Colombia, because it's cheaper to rent an apartment there while they sort things out with Tao. Corus has started offering bargains to entice Mateus to close — the last offer he remembers was $230,000 — but he won't be satisfied until the price reflects what he believes a comparable unit is worth in this rock-bottom market: $125,000.
Along with losing his equity, Mateus is worried that only a few people will be forced to shoulder all the maintenance fees. "Who's gonna be the [homeowners] association? Thirty people?" he says.
Besides, he's not eager to be the lone resident of an empty building. "It's kind of unsafe to move into a place like that," he says.
A Valet's Worst Gig: CityPlace South Tower, West Palm Beach
Don Patterson is hidden in a side room off the main entrance of CityPlace South Tower, sneaking bites from a takeout container of spaghetti. With his blond hair, blue eyes, collared shirt, and khaki shorts, the 25-year-old could pass for a shorter, slimmer cousin of Zack from Saved by the Bell.
As usual, he's having a slow afternoon. There's not much need for his valet services in a condo building that's mostly empty. "It's very boring," Patterson explains. "There's, like, ten people living here."
He's been working here two days a week for four months, earning $10 an hour. He's an amenity, just like the pool, kickboxing studio, spa, and steam rooms. His presence — like the valet services at many newer condo complexes — signals to visitors that the building is vital and full of residents, despite all evidence to the contrary.
Mainly, Patterson's job is to serve the guests, the ones he calls "lookers," the people who drive up to take a tour of the many units for sale or rent.
"Hold on a sec," Patterson says at one point, rushing off to attend to a white-haired gentleman who pulls up in a convertible. A few minutes later, Patterson runs to fetch a BMW for a young couple leaving the building. They were here to meet a realtor, Patterson says.
The residents Patterson has met include doctors, surgeons, and marketing professionals. Occasionally, Patterson helps them unload their groceries. They ask him how sales are going, whether more people are buying or renting units. But he doesn't have much good news to report.
CityPlace South Tower was part of the building frenzy in West Palm Beach — a city that, according to annual census estimates, issued building permits for 9,000 residential units from 2002 to 2007, more than double the number issued in the previous six years. City leaders were trying to revive downtown shops and reap millions of dollars in tax revenue. "The city is on fire," Mayor Lois Frankel said excitedly in 2004. "All of a sudden, it is going to be a boom. There is going to be a huge transformation in the next few years."
Condos at CityPlace South Tower were supposed to sell for $500,000 to $800,000. According to property appraiser records, 37 of the 420 condos have been sold. But there's no way to know how many of those buyers actually live in the building or which units the developer, Related Group, has simply decided to rent out. Just like at Tao, some buyers have filed lawsuits trying to get their deposits back. A local real estate consultant, Christina Morrison Pearce, recently proposed converting the building into a hotel to support its neighbor, the Palm Beach County Convention Center. But Pearce says the mortgage on the building is still too high for her buyers, and county leaders were not eager to embrace the idea.
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2011 - People & Places
