Letters for the week of April 18-24, 2007

Wareham Development's founder responds to us, and we to him.

“Home, Suite Home,” Feature, 4/11

Your story oversimplified the situation
I just read your “column” on the stalemate at the Terraces at Emery Station — the situation that has allowed twenty residents to remain billeted in hotel rooms while their Home Owners Association (HOA) and insurers argue over a settlement.

Your writer did a good job of portraying how terrible this experience has been for these homeowners. Unfortunately, the article did next to nothing to report on the content of the fourteen pages of clear and direct responses that our insurers’ lawyers provided to your pointed questions on how something like this could happen. The resulting article is an incomplete and unbalanced piece of nonjournalism that will only serve to continue to confuse the real issues further.

I am at a loss to understand the real purpose behind this kind of slanted journalism. Who is it you think you are helping? What’s worse is, once again a writer, your writer, has repeated what propagandists call “the big lie” — an untruth designed to elicit emotions — in this case, blaming the delays on my company.

Yes, as the developer (but not the builder) of that project, I am ultimately responsible for creating the Terraces. But it is an outright fabrication to say that Wareham is in any way at fault for any of the delays. Check the facts. We were taken out of any position to influence this situation years ago, when the insurance company assumed control of the issue and the HOA took control of the building. Your writer clearly knew that but chose not to include that fact. Why?

Like the homeowners who are at the mercy of their HOA board, I am also trying to deal with being excluded from the process. I have had no say in how matters have been conducted, and certainly no power to get the two parties to come to an agreement. So I have no way of making this right.

And, as far as questions are concerned, I, for one, would have liked for you to ask why the HOA board doesn’t appear to want to resolve this issue and get the homeowners back in their homes; why they haven’t made any counteroffers of settlement; and why they apparently aren’t communicating with their members regarding the offers that have been made.

Perhaps the HOA board is just having too much success perpetuating their fabrications in the pages of publications like the Express. Buying time with the obfuscation at the expense of their own members.

And what about your actions in producing this column? Far from doing the community a service, I fear that you have now taken on a significant role in keeping these unfortunate residents in their hotel rooms even longer.
Richard K. Robbins, Wareham Development

Lauren Gard responds
Portions of Wareham’s written responses were, in fact, quoted in the article. I also investigated its claims regarding the HOA that Robbins cites in his letter. Lawyers for both sides simply differ in their interpretations, and I opted to simplify the back-and-forth, when perhaps I should have spelled out some of these discrepancies in greater detail. I do so below.

We quoted Wareham’s claim that the HOA board has been unwilling to engage in meaningful settlement talks with insurers, a claim to which Robbins attributes the delays. The board, represented by attorney Jeff Cereghino, refuted this notion over the course of several interviews. “We told them we needed to complete repairs, investigate reserves,” he said in early April. “They agreed with us that mediation would be premature until after we had completed these tasks.” He was referring to the defective condo being repaired as a test to determine how much fixing all the bad units would likely cost. The HOA lawyer added that he had been trying to schedule a mediation session next month with Wareham’s lawyers and insurers. “We sent them dates days ago,” Cereghino said.

Robbins faults the HOA for not communicating details of settlement offers, including one for $6.5 million, to Terraces residents. HOA president Cindy Truelove notes that the board had agreed from the start not to discuss “concrete details of the case” outside of mediation. “The defense chose to speak about its offer but we did not,” she said. (After Wareham unilaterally informed residents of the terms, the HOA followed up with a letter explaining why it rejected the $6.5 million offer.) The HOA board operates like any other elected body. Vetting proposals — and not necessarily running each one by its electors — is standard practice.

The HOA also dismissed as semantic Robbins’ claim that its board has made no counteroffers. “They have a counteroffer in front of them and always have,” Truelove said. “From the day we said no to the $6.5 [million] and before and afterward, they have had our bid estimate for the repair, which even then exceeded the $6.5 [million]. … We have always been forthcoming in these discussions with what we expect in the way of settling this case.”

Robbins accuses the Express of overlooking the notion that Wareham’s insurers hold the reins. He insists that he, personally, has “no way of making this right.” While accurate in its facts, the article may indeed leave the impression that Wareham is to blame when, technically speaking, the HOA has dealt with the company’s insurers since 2004. Yet Robbins’ claim that Wareham is powerless feels disingenuous. After I requested interviews with Robbins, Wareham’s lawyer, and a lawyer for one of the company’s insurers, the latter asked me to submit written questions. Robbins attributes the resulting fourteen-page response to Wareham’s insurers, but it was clearly a joint response. When I asked Eric Buzzard, the lawyer representing Wareham’s secondary insurer, how to attribute the information, he replied: “These responses are from Wareham.”

What’s more, in a highly unusual pre-emptive move, Wareham sent a copy of the entire Q&A to each Terraces owner. It did so on April 9, two days prior to the article’s publication, without notifying the Express. The cover letter, signed by Rich Robbins, began: “We recently received a request from the East Bay Express to answer several questions in writing relating to an article they are preparing on the Terraces at EmeryStation.” All of which begs the question: Where does Wareham’s identity end and that of its insurers begin?

Robbins blasts the notion that “Wareham is in any way at fault for any of the delays” as an outright fabrication. Yet several displaced residents reported that the developer brushed them off, or failed to respond fully to complaints after their units sprang leaks. The company did make selected repairs, but most of the affected residents lived in their defective condos for months before Wareham called in its insurers.

In reality, Wareham did have opportunities to make things right. HOA president Cindy Truelove proposes that Wareham could have used some of the profits from its Terraces condo sales to make the repairs, rather than ceding control to its insurers early on. Or, since the association claims Wareham knew of leaks prior to selling the new units, that it could simply have repaired the condos before selling them.

Emeryville Councilman Ken Bukowski, for one, has not been shy about placing the ultimate fault squarely at Robbins’ feet. “I feel strongly that Rich Robbins is the responsible party. He should buy back every one of those units, and he is not accepting the level of responsibility that he should,” Bukowski wrote in an April 16 e-mail to city manager Pat O’Keefe asking that the issue be put on the council agenda. “He took these people’s money and he sold them something that is defective. And they should be able to get their money back. period.” [sic]

Barring this, Bukowski suggested that the city Redevelopment Agency buy back the Below Market Rate units, if not all of the problem units. “I am asking the city to step in because it does not appear to me as if there is any way to get Wareham to stop thinking abort [sic] themselves,” he wrote.

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We love letters. Please provide your full name, address, and daytime phone number, although we’ll only print your name, city, and affiliation. Send letters to [email protected] or Letters, East Bay Express, 1335 Stanford Ave., Emeryville, CA 94608. Letters are edited for length and clarity.

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