The Vail Inn condos and Evergreen Lodge hotel. (BusinessDen file)
A judge in Eagle County has agreed to continue blocking Vail developer Peter Knobel from forcing five condo owners to sell their units but has signaled that he will not do so for much longer and that Knobel’s plans to demolish the condo building will ultimately succeed.
“The Evergreen Lodge is not going to stay the same as it is,” Judge Paul Dunkelman said of the building at 250 S. Frontage Road. “Five years from now, regardless of whatever happens in this courtroom, there is going to be a brand new piece of property at the Evergreen Lodge.”
Knobel, a co-founder of Native Roots Cannabis Co. and a controversial figure in Vail with a history of legal battles, has been planning for years to knock down the aging Evergreen Lodge hotel and the 19 Vail Inn condos in the same building and construct a new condo complex.
To accomplish this, he has bought up condos and come to control a majority of the Vail Inn condo board. That board voted July 24 to effectively force a sale of the remaining condos and to begin dissolving the Vail Inn. A final vote was scheduled for Aug. 27 but that meeting was canceled by Dunkelman after five holdout condo owners sued to stop the forced sale.
At a hearing Oct. 30, Dunkelman extended his injunction two more weeks while questioning why the five remaining condo owners continue to seek delays of the inevitable.
“I can enjoin this and protect (condo owners) for a little while but that’s all I can ever do because this process can move forward,” he said. “I can’t figure out why we’re here.
“That’s the danger of condos. It becomes a numbers game and they’ve got the numbers,” the judge added. “I’ve never met Peter Knobel; it’s a name we know up here. Never met the guy. Knobel put together a plan as a businessman to buy units so that he could get control of an HOA. Developers do that all of the time, that’s how they get control. That’s not a negative or positive, that’s what businessmen do. They’ve got the numbers. I can stop this for a little while but that’s all I can do because the members have the right to do this and they’ve got the votes.”
Matt Ferguson, an attorney for the condo owners, argued that Knobel and other members of the condo board who have conflicts of interest should not be allowed to vote.
“The process needs to be redone. The result may be that they are going to build this thing. Well, they are going to build it eventually. It’s going to be built,” he said of Knobel’s proposed development. “But the process to get there is designed to protect people. They have rights.”
Holdout condo owners say they were promised units in the new condo building if they agreed to sell to Knobel, but the contracts they signed allowed Knobel’s company, Solaris Group, to cancel them at any time. Then, over the summer, Solaris nullified those contracts.
“You bushwhacked these people, did you not?” Ferguson asked Ryan Smith on Thursday. Smith is both the president of the Vail Inn condo board and an attorney for Solaris Group.
“I disagree with that,” responded Smith, who lives in Cherry Hills Village.
Ferguson’s clients also believe that Newmark, the company hired by Smith’s board to appraise Vail Inn condos ahead of their sale this summer, grossly undervalued their units.
“Are we here today if you love the Newmark appraisal?” Dunkelman asked Ferguson. “If the dollar bills are exactly what your clients were looking for, you’re telling me we are here?”
“Yes. I will tell you, there are people here today who live there and who want to die there,” the attorney said of his clients in attendance. “They want the unit that was promised to them.”
At various times during the contentious hearing, each side accused the other of greed.
“What I’m hearing when cutting through all of this is that the plaintiff (condo owners) think it is unfair because they didn’t do a good job of negotiating,” said Jonah Hunt, a lawyer for Knobel, Smith and other Solaris executives. “Everyone else has a deal for a condo except these people and they say, ‘It’s unfair, we want 2X, we want 3X what the fair market value is.’”
Throughout the three-hour hearing, Dunkelman candidly shared his thoughts on the case and his skepticism that an injunction was the appropriate remedy for the heated situation.
“Let’s be fair about what happened on July 24 and in August. Was it illegal, was it improper? I don’t know. But this was speedily brought before the group and they are offended by that,” he said of the proposed forced sale. “I get that. I’d probably be offended if I was there too.
“Was there a conflict of interest in this (sale) process? Of course there was. You’ve got a bunch of related people who took over the HOA and then quickly initiated this process.”
He urged the two sides to agree on a neutral third party, such as an arbitrator or a retired judge, who can oversee a fair vote of the condo board and condo members. Ferguson and Hunt agreed to find someone this week, while noting it’s unlikely to affect the vote’s outcome.
“Even if there is a board member who allegedly has a conflict — Mr. Knobel, who appears to be the villain of the day — he does not lose his rights as a condo owner simply because someone has accused him of being conflicted. He still has the right to vote,” Hunt explained.
“I agree,” Dunkelman told the lawyer. “It seems like we are all saying the same things here.”
If the judge puts an end to the injunction and allows 250 S. Frontage Road to be demolished, the condo owners’ lawsuit against Knobel and Solaris will still move ahead. They are seeking an undetermined amount of money from the developers for breach of their sale contract.
In the meantime, the condo board is blocked from taking any action until at least Nov. 17, three days before Knobel is to submit documents for his new development to the Town of Vail.
“If they are not submitted, the project will not be going forward on the previously planned timeline,” Matt Morr, an attorney for the development team, told Dunkelman last week. “We are talking about losing jobs and money — tax revenue — for the Town of Vail.”
“No,” Ferguson responded, “we’re talking about delaying jobs and tax revenue for the town.”
The Vail Inn condos and Evergreen Lodge hotel. (BusinessDen file)
A judge in Eagle County has agreed to continue blocking Vail developer Peter Knobel from forcing five condo owners to sell their units but has signaled that he will not do so for much longer and that Knobel’s plans to demolish the condo building will ultimately succeed.
“The Evergreen Lodge is not going to stay the same as it is,” Judge Paul Dunkelman said of the building at 250 S. Frontage Road. “Five years from now, regardless of whatever happens in this courtroom, there is going to be a brand new piece of property at the Evergreen Lodge.”
Knobel, a co-founder of Native Roots Cannabis Co. and a controversial figure in Vail with a history of legal battles, has been planning for years to knock down the aging Evergreen Lodge hotel and the 19 Vail Inn condos in the same building and construct a new condo complex.
To accomplish this, he has bought up condos and come to control a majority of the Vail Inn condo board. That board voted July 24 to effectively force a sale of the remaining condos and to begin dissolving the Vail Inn. A final vote was scheduled for Aug. 27 but that meeting was canceled by Dunkelman after five holdout condo owners sued to stop the forced sale.
At a hearing Oct. 30, Dunkelman extended his injunction two more weeks while questioning why the five remaining condo owners continue to seek delays of the inevitable.
“I can enjoin this and protect (condo owners) for a little while but that’s all I can ever do because this process can move forward,” he said. “I can’t figure out why we’re here.
“That’s the danger of condos. It becomes a numbers game and they’ve got the numbers,” the judge added. “I’ve never met Peter Knobel; it’s a name we know up here. Never met the guy. Knobel put together a plan as a businessman to buy units so that he could get control of an HOA. Developers do that all of the time, that’s how they get control. That’s not a negative or positive, that’s what businessmen do. They’ve got the numbers. I can stop this for a little while but that’s all I can do because the members have the right to do this and they’ve got the votes.”
Matt Ferguson, an attorney for the condo owners, argued that Knobel and other members of the condo board who have conflicts of interest should not be allowed to vote.
“The process needs to be redone. The result may be that they are going to build this thing. Well, they are going to build it eventually. It’s going to be built,” he said of Knobel’s proposed development. “But the process to get there is designed to protect people. They have rights.”
Holdout condo owners say they were promised units in the new condo building if they agreed to sell to Knobel, but the contracts they signed allowed Knobel’s company, Solaris Group, to cancel them at any time. Then, over the summer, Solaris nullified those contracts.
“You bushwhacked these people, did you not?” Ferguson asked Ryan Smith on Thursday. Smith is both the president of the Vail Inn condo board and an attorney for Solaris Group.
“I disagree with that,” responded Smith, who lives in Cherry Hills Village.
Ferguson’s clients also believe that Newmark, the company hired by Smith’s board to appraise Vail Inn condos ahead of their sale this summer, grossly undervalued their units.
“Are we here today if you love the Newmark appraisal?” Dunkelman asked Ferguson. “If the dollar bills are exactly what your clients were looking for, you’re telling me we are here?”
“Yes. I will tell you, there are people here today who live there and who want to die there,” the attorney said of his clients in attendance. “They want the unit that was promised to them.”
At various times during the contentious hearing, each side accused the other of greed.
“What I’m hearing when cutting through all of this is that the plaintiff (condo owners) think it is unfair because they didn’t do a good job of negotiating,” said Jonah Hunt, a lawyer for Knobel, Smith and other Solaris executives. “Everyone else has a deal for a condo except these people and they say, ‘It’s unfair, we want 2X, we want 3X what the fair market value is.’”
Throughout the three-hour hearing, Dunkelman candidly shared his thoughts on the case and his skepticism that an injunction was the appropriate remedy for the heated situation.
“Let’s be fair about what happened on July 24 and in August. Was it illegal, was it improper? I don’t know. But this was speedily brought before the group and they are offended by that,” he said of the proposed forced sale. “I get that. I’d probably be offended if I was there too.
“Was there a conflict of interest in this (sale) process? Of course there was. You’ve got a bunch of related people who took over the HOA and then quickly initiated this process.”
He urged the two sides to agree on a neutral third party, such as an arbitrator or a retired judge, who can oversee a fair vote of the condo board and condo members. Ferguson and Hunt agreed to find someone this week, while noting it’s unlikely to affect the vote’s outcome.
“Even if there is a board member who allegedly has a conflict — Mr. Knobel, who appears to be the villain of the day — he does not lose his rights as a condo owner simply because someone has accused him of being conflicted. He still has the right to vote,” Hunt explained.
“I agree,” Dunkelman told the lawyer. “It seems like we are all saying the same things here.”
If the judge puts an end to the injunction and allows 250 S. Frontage Road to be demolished, the condo owners’ lawsuit against Knobel and Solaris will still move ahead. They are seeking an undetermined amount of money from the developers for breach of their sale contract.
In the meantime, the condo board is blocked from taking any action until at least Nov. 17, three days before Knobel is to submit documents for his new development to the Town of Vail.
“If they are not submitted, the project will not be going forward on the previously planned timeline,” Matt Morr, an attorney for the development team, told Dunkelman last week. “We are talking about losing jobs and money — tax revenue — for the Town of Vail.”
“No,” Ferguson responded, “we’re talking about delaying jobs and tax revenue for the town.”
