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Frustrated buyers sue for refund on condo

They bought into the idea of living in Trump Tower luxury. Now they just want their deposit back.

By JAMES THORNER
Published March 6, 2007

Joe Shultz and Louis Ricci tried to disregard Trump Tower Tampa's growing distress: the broken financing deals, the unpaid contractors and the slippery completion dates.

They will disregard them no longer. Partners on a $1.48-million condo, Shultz and Ricci have become the first Trump Tower buyers to sue to get their deposit back.

The pair from Santa Rosa Beach in the Florida Panhandle allege local developer SimDag LLC breached a sales contract by failing to build their 38th-story luxury condo on time.

They also blame Donald Trump, suggesting the New York tycoon misstated his relationship to the project. Trump said at the time he had a "substantial stake" in the $300-million tower when, in fact, his exposure is limited to a licensing deal with SimDag.

"No hard feelings, but I just don't think they'll have it finished," Shultz said Monday. "I'm kind of baffled why they haven't returned the money."

The project, advertised as west-central Florida's tallest at 600 feet and 52 stories, was unveiled with fanfare in early 2005, but remains little more than a hole in the ground at 111 S Ashley Drive in Tampa.

Banks already skittish in the sluggish residential housing market have shied from financing 190 condos priced between $700,000 and $6-million.

Developers have pushed the original completion date of December 2008 into 2009. The revised date could be difficult to meet based on the project's previously announced 30-month construction schedule.

Smitten with owning a piece of the Trump empire, Shultz and Ricci grabbed a condo in August 2005. As part of the 20-percent nonrefundable deposit, the men paid SimDag $148,200 in cash and provided a letter of credit for an equal amount.

The partners may be the first to sue, but they represent an undercurrent of disgruntled buyers, said Tom Long, the men's Tampa attorney.

"I think these suits are going to become more frequent. I think we're three months away from when developers say, 'Forget about it,' " Long said. "There's a real risk many people will not get their money back. There's a real risk you're going to see a bankruptcy filing."

For their part, Trump Tower's partners are still optimistic. Short of cash and behind schedule, SimDag sold a controlling stake in the fall to Orlando private equity firm Mirabilis Ventures Inc.

Last week, Mirabilis revealed it had laid off employees and closed offices in Orlando, but executives have not returned calls for further comment.

Using some of Trump's contacts, SimDag has scurried to cut deals in the hope of getting the project financed and restarted. Potential partners include the Related Group, a Miami developer that has worked with Trump, and an undisclosed New York hedge fund.

John Reich, president of SimDag's construction division, promised to disclose the interlocking relationships later this month. "We're going ... do an entire summary on that in two to three weeks," Reich said Monday.

Joel Cantor got his own condo tower, Signature Place in St. Petersburg, off the ground earlier this year. He said Trump would be a fine addition to the skyline to bookend his project across the bay. But he doubts it will happen.

"When the market comes off a hyper-boom, all the investors and nonresidents disappear, which is the case now," Cantor said. "The challenge is to attract qualified residents who can afford and appreciate downtown living. That's why Trump Tower is questionable."

SimDag has filed papers in court to dismiss Shultz and Ricci's lawsuit. Its lawyer pointed to a clause in the sales contract that rules out a guaranteed completion date. A hearing is scheduled for March 13 in Tampa.

Long suspects SimDag is out of money and has used up some of the deposits. How else to explain why developers owe more than $3-million to contractors forced to place liens on the property?

"I understand their position. To a certain extent it's a floodgate: If they give one person money back, it's the same for everyone else," Long said.

"A lot of people are going to be hurt on this thing."

Times staff writer Colleen Jenkins contributed to this report. James Thorner can be reached at (813) 226-3313 or thorner@sptimes.com.

[Last modified March 6, 2007, 06:40:38]