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Landmark Developer Files Chapter 11 Bankruptcy
Developer Subject Of CALL7 Investigation
POSTED: 12:52 pm MDT August 31,
2009
UPDATED: 6:21 pm MDT August 31,
2009
GREENWOOD VILLAGE -- It's touted as one of the most high-end condominium complexes in the Denver area, but the CALL7 Investigators discovered the developer of The Landmark in Greenwood Village cutting corners on the project. Now, Zack Davidson's company has filed for bankruptcy protection.The Landmark and The Meridian are two residential condominium towers just off I-25 and Orchard Road with hundreds of units.The sales pitch promises the best of everything from construction, art, appliances, bathrooms and amenities like wine lockers, concierge services and dog walking.
Walk into any of the units and the prospective buyer is shown what is considered by the developer to be the best of the best.But the CALL7 Investigators looked closer and in May 2008 found less expensive GE Profile appliances in many of the units, even though the sales brochures promised the more expensive GE Monogram appliances.With undercover cameras rolling at The Landmark, the salesperson showed CALL7 Investigators one of the models and said, "this is GE Monogram appliances, which is all stainless steel products. It's the highest end that you'll find, probably standard in a condo complex."7NEWS hidden cameras showed the Monogram logo on the lower left corner of the "built-in" microwave.The problem is, the microwave was not GE Monogram, but instead the lower-priced GE Profile model.In 2008, the developer of The Landmark, Zack Davidson, initially told CALL7 Investigator John Ferrugia that he knew nothing about the altered logos."I'd be happy to provide you guys with a list of all my appliances and validation that they are exactly what they are represented to be," said Davidson."So you don't know that people have changed these?" asked Ferrugia.Davidson replied, "No I don't. I do not know that. I am not aware of that."But, CALL Investigators obtained an internal e-mail Davidson had sent to an appliance company that sells GE products reading, "Have you resolved obtaining and applying the GE Monogram badges on the microwaves???"Ferrugia showed the e-mail to Davidson who said, "I'm done talking right now. I've got to check the facts of what you've said. I'd be happy to look at the information you've given me here and get more information to understand what you're asserting, if you're asserting something. I don't have the facts in front of me. What I can tell you is this, when we started the project there were two very analogous GE appliances in the Monogram and Profile lines."In a later phone conversation, Davidson said he was not trying to deceive anyone and believes he is providing a superior product. He said the Monogram microwave he intended to put in the condos was discontinued by GE.A federal lawsuit, filed in 2008, showed issues with The Landmark development did not end with microwaves.Public court records show the high-end bath tub maker Bain Ultra sued Davidson’s development company claiming it had hired a company to build knock-off Bain Ultra jetted tubs.Internal e-mails used as exhibits in the federal lawsuit lay out a plan to buy a Bain Ultra jetted tub, send it to China, and have replicas built.A March 2007 document, sent to Davidson and his Everest team, which notes: "I need a fully functional tub to send to china to match. the time frame for the molding and models will be about 60 days."A follow up email from Everest to the company working on the knock-offs makes the plan clear: "Please verify you are acquiring a jetted tub from your Bain rep in K.C, and that it will be shipped out to Tracy in China."But according to internal e-mails, the microwaves and tubs aren't the only potential problems.A risk managment assessment, sent to Davidson in May of last year turned up what were called several potential "misrepresentations" by the developer including cabinets inferior to those promised buyers, door hardware and locks made in Pakistan rather than high-end hardware promised and wall construction that was inferior to that promised the buyers.The email made it clear the potential "misrepresentations" could cost Everest Development millions of dollars.Another email read: "We would not want the media to pick this up and run with it especially in light of the recent GE microwave 're-badging' issue."Davidson declined our repeated requests for an on-camera interview by in a recent email regarding the tubs and hardware claimed, "We stand by the choice and quality of products installed in our homes at The Landmark and The Meridian towers. Our homeowners are fully aware that products installed in their residences meet or exceed the specifications of their buyers' contract. It is a very normal business practice for developers to evaluate and change the selection of the products during the course of construction."Davidson did not mention that Everest has settled a federal lawsuit with the Bain Ultra company over copyright infringement and other issues.Everest admitted no liability in the settlement.In a news release on the bankruptcy Everest said, "The company will continue with sales and operations of its residential towers, as it restructures and extends its existing financing, and retailers will continue operations as usual at The Village Shops at Landmark. The Chapter 11 filing does not include the separately-owned European Village of Homes, a 13-acre, 216-unit master-planned community just to the south of The Landmark, slated to be built as part of the second phase of the project."The release continued, "Since opening in May 2008, 139 condominium homes have been purchased at The Landmark and The Meridian, totaling approximately $95 million in residential sales. The Village Shops have also flourished, with over 80 percent of the available 185,000 square feet leased to some of Denver’s most successful restaurants, retailers and entertainment venues. In the past three months alone, four new retailers and restaurants totaling nearly 13,000 square feet have made lease commitments for available spaces at The Village Shops."The news release also quoted Davidson as saying, “We are grateful to the Denver community for its tremendous support of The Landmark community over the past four years. This support has led to continued success even through the downturn in the economy and more specifically, of the residential home market. We regret that certain challenges, including financing issues with the project’s senior lender, Hypo Real Estate Capital Corporation, combined with the local and national slowdown of residential home sales, and the inability of our buyers to sell their existing homes and obtain financing for their new homes here at Landmark, have unfortunately impacted our cash flow and made reorganization our only option."
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