Centennial mold sparks suit against city, county
December 24, 2015
Unit owners at the Centennial apartments complex are suing the housing authority, the city and county on allegations that they have allowed the persistence of "dangerous levels of potentially toxic mold" and other structural damages commanding as much as $10 million in repairs.
The 20-page lawsuit, filed Wednesday by the Centennial Owners Association in Pitkin County District Court, says local government has passed on the cost of the repairs to the unit owners, and by doing so, has violated local and state housing laws.
Located at the foot of Smuggler Mountain, the Centennial complex was built 30 years ago as part of a public-private venture. Of its 148 affordable-housing units, 92 are deed-restricted for ownership and 56 are rentals. The seven-building complex is governed by the housing authority.
Filed by Aspen attorneys David Bovino and Peter Thomas, the suit comes as the Centennial HOA has been at odds with public officials over whom should shoulder the cost to make repairs. Talks have been ongoing since 2009, with Centennial owners attributing the damages to shoddy construction in 1985. The city has contended that owners haven't met their obligations to pay for routine maintenance.
Meanwhile, the suit argues that the owners are financially hamstrung by the city's decision to not bear the costs associated with repairing the damages. That's because the housing authority's 10 percent limit on capital improvements to deed-restricted homes doesn't apply to such major structural repairs as the current dilemma, creating a disincentive for the owners to pay for it.
The suit also contends that the defendants knew that the builder of Centennial, World Class Housing, was "financially squeezed" and implemented "cost-cutting measures" in order to "maximize his profits through cheaper construction methodologies."
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Additionally, local government recognized at the time that the building was not up to code when it was constructed, but did nothing about it.
The result was inferior construction and design flaws leading to "multiple avenues for water intrusion behind wood siding" and potentially toxic mold, the suit says. A series of inspections commissioned by the city and county yielded cost estimates ranging from $3.5 million to $10 million to repair the damage, the suit says. In March 2014, the city concluded that each owner should contribute upward of $40,000 toward making the fixes, "with no allowable increase to them in equity or resale value, thereby saddling the current owners with the entire financial burden of repairing the defective buildings that defendants sold them."
And in January, the city notified the HOA that no public funding would be available for improving the conditions.
While owners have no financial incentive to pay for the repairs, the majority of them also can't afford the costs, the suit claims, basing the assertion on a credit analyst's findings.
"APCHA, the county and the city are unfairly and illegally forcing residents to choose between living in unsafe conditions or finding some unknown way to fund a multimillion dollar renovation of an affordable-housing project that APCHA manages," the suit says.
The suit seeks a jury trial.
City Attorney Jim True declined to comment about the suit. Aspen-Pitkin County Housing Authority attorney Tom Smith as well as Executive Director Mike Kosdrosky could not be immediately reached.