Getting Schooled

A group of former condo owners say SMU defrauded them of their homes to make way for the new Bush library.

The association felt it had little choice but to settle. Those residents who intended to sell within a few years anyway didn't want to lose SMU as a motivated buyer. And the homeowners association didn't exactly have the legal resources to match SMU's. "We couldn't afford a long court case," Leslie Davenport says. "We were just a little condo."

The settlement gave SMU the green light to proceed, and by 2005, the school owned over 75 percent of the complex. SMU now controlled the homeowners association that once took the university to court; 12 of its 14 members were SMU employees — only one of them even lived at University Gardens.

After the settlement, Pat Davenport felt pressured and sold her two units. As Leslie remembers it, the school told them that $75 a square foot was market value, but it would offer an additional $20 a square foot to get the deal done.

Attorney Gary Vodicka is now suing his old alma mater, alleging SMU defrauded him and other residents of the University Gardens in its plan to acquire land to build the Bush library.
Mark Graham
Attorney Gary Vodicka is now suing his old alma mater, alleging SMU defrauded him and other residents of the University Gardens in its plan to acquire land to build the Bush library.
The empty site in front of the SMU campus is where the University Gardens condominiums sat for nearly 40 years until being demolished to make room for the 25-acre George W. Bush Presidential Center.
Mark Graham
The empty site in front of the SMU campus is where the University Gardens condominiums sat for nearly 40 years until being demolished to make room for the 25-acre George W. Bush Presidential Center.

"They told us, 'You'll never get more than 75 a square foot if you don't sell to us now.' That's what they said," Leslie recalls. "And people like my mom couldn't afford to roll the dice."

Still, some former residents believe SMU treated them fairly. Stephen Norton, an accountant, closed on his unit in 2003 and says the school offered him "good, fair market value." But Norton, who has an MBA from SMU, notes that some of the older residents didn't understand that they could get more money simply by holding out and seeking an independent appraisal.

"They pulled the trigger too quickly. I urged them to wait, and they didn't," he says. "There was a broker for SMU that might have been strong-arming some of the residents. He did use the fear factor with some of the older women."

Norton adds that he, like other residents, knew that SMU was looking at the condominium as a possible site for the Bush library — it had been in the newspaper, after all — but that didn't affect his decision to sell.

Vodicka agrees that yes, many residents suspected that SMU wanted their property for the Bush library, but says they never knew for certain. And if they had known, they would have held out for more. "The owners would have been a lot more resolute. Instead, they allowed themselves to be run over."

In 2005, the law firm representing SMU, Locke Liddell, hired an engineering company to inspect the 40-year-old University Gardens. The engineers concluded that the complex needed about $12.4 million in repairs, a staggering sum for the residents who remained.

In June 2005, Peruna Properties sent a notice to the remaining residents: A vote was scheduled by the homeowners association to declare the condominium complex "functionally and economically obsolete." Also included in the notice was a proposed contract offering to purchase the remaining units for "$175 a square foot."

Those residents who attended the home­owners association meeting felt it was a foregone conclusion that their homes had a date with a wrecking ball. Lawyers for SMU grimly sat in the audience, perhaps anticipating future litigation. On the other side of the conflict, Vodicka videotaped the proceedings, ignoring a board member who asked him to stop.

The president of the association, Doug Hallenbeck, was employed by SMU as its director of residential life. He did not live at the complex. At the meeting, he cited the engineering report on the condo and presented one resolution declaring the complex obsolete and a second allowing the association to sell it.

One elderly board member suggested that the association was moving too quickly, and asked for a second and a third opinion from other engineering firms. The board voted down her motion, and the homeowners, almost all of whom were proxies representing SMU, passed a resolution to tear down the complex. Within a year, the complex was demolished.

Those residents who held out till the end, of course, got the best deals: Attorney Mark Stradley received $275 a square foot and convinced SMU to endow a $100,000 scholarship in the name of his late father, Fred Stradley, a graduate of the law school. Yves Gerem, an immigrant from Eastern Europe, received $315 a square foot.

"I escaped from communist country, literally escaped, to come to this kind of treatment? I don't think so," he said in an earlier deposition. "And I was absolutely determined that, you know, I will not accept the original SMU price, even if I had to die."

SMU attorney John McElhaney scoffs at the argument that SMU simply exploited a loophole in the condominium's bylaws, allowing it to strong-arm the people who lived there. "All of these [residents] bought condominiums and had to play by the rules," he says. "They all assumed the risks."

But Gary Vodicka, not so easily dismissed, refused to sell. On August 10, 2005 — two months after the SMU-controlled board voted to tear down his home — he filed a lawsuit against SMU, alleging that the school committed fraud as it went about amassing units in his condo complex.

"The SMU-controlled homeowners board let the condo's repairs and maintenance lapse," he says. "In an attempt to ruin the quality of life, they rented it out to SMU students. They didn't act in the residents' best interests and do what was best for the property; they did what was best for SMU's interest."
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