Developer faces mold suit
BY DOUGLAS HANKS III
The developer of Miami's mammoth Four Seasons tower is facing millions of
dollars in lawsuits over a mold outbreak at a similar high-end condominium complex
in Washington, D.C.
Millennium Partners is wrapping up an extensive clean-up and relocation effort
at its new Ritz-Carlton project in Washington, where it says faulty plumbing
spawned an outbreak of mold. Residents sued the New York-based developer, saying
the black, inky fungus caused health problems and forced them to abandon their
In turn, Millennium has sued the builder, Bovis Lend Lease, which is also
building the 70-story Four Seasons Hotel & Tower on downtown Miami's Brickell
Avenue. Millennium spokesman Matthew Hall said that Bovis used different plumbing
contractors for the two projects and that engineers hired in the aftermath of
the Washington problems found no mold in the Miami building.
''This is a unique situation we believe has been caused by one contractor
who did not do the plumbing properly,'' Hall said.
The Washington Post detailed the Ritz-Carlton mold saga in a front-page story
this week. Sales have been slow at the luxury complex despite luring diplomats,
politicians and Michael Jordan as residents. After three years of sales, about
70 of the 161 condominiums are still available.
INSPECTING THE UNITS
Hall said the mold outbreak, discovered in early 2002, prompted Millennium
to back off its sales efforts there. The company has been moving residents out
of their units in order to inspect and gut the interiors. In court papers filed
in December, Millennium said it had spent $6 million on the problem, and the
Post reported one insurer estimated the tab might run as high as $20 million.
Millennium has asked a New York judge to order its insurance companies to
cover all the clean-up costs, and Hall said the Ritz-Carlton problems won't
have a significant impact on the national developer's balance sheet. But disclosure
of Millennium's struggles in Washington does shed light on the kind of stress
the company faced last year in the midst of setbacks in Miami.
Last spring, Millennium announced 25 percent price cuts at the Four Seasons,
saying it had miscalculated the premier hotel's ability to drive condominium
sales in South Florida. The company dispatched partner Brian Collins to revive
the sales operation, which Millennium had shuttered the previous fall in the
face of weak demand.
The reckoning in Miami would have coincided with the start of Millennium's
mold worries in Washington, a problem that would ultimately lead to at least
four multimillion-dollar lawsuits from buyers. Those problems came on the heels
of the Sept. 11 terrorist attacks, which occurred within a month of Millennium's
completion of three other luxury hotel-condominium hybrids across the country
-- including one in New York's Battery Park City, within walking distance of
the former Twin Towers site.
Miami's Four Seasons is scheduled to open in October, and Hall said sales
have picked up considerably now that people can tour the soaring tower, the
largest in Florida.
Mold insurance claims and lawsuits have risen sharply in the last several
years, and there is considerable dispute as to how serious a problem it represents.
Homeowner advocates and mold litigators say mold causes serious health problems,
but insurers and builders say opportunistic lawyers are driving most of the
In December, Millennium filed suit in New York against six insurance carriers
to force them to pay for the Washington mold clean-up. The suit names Bovis
as a defendant as well, accusing the contractor of violating contractual obligations
by allowing the plumbing problems to occur.
Hall said the clean-up will finish in July, but the bad publicity comes as
Millennium is marketing another Ritz-Carlton project in Washington's exclusive
''They've got a lot of money to lose,'' said Jonathan Tycko, a lawyer for
one of the Ritz-Carlton residents.
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