There's trouble in paradise.
A dispute over finances at the prestigious Parkway condominium building has thus far resulted in one lawsuit, another threatened suit and a petition circulated among the owners calling for the replacement of the current board of directors.
The Parkway, located at 151 Buffalo Ave., is home to numerous attorneys, at least one judge and dozens of prominent Niagara Falls businesspeople. Units regularly sell for upwards of $125,000, and represent the high end of downtown residential real estate.
The lawsuit, filed last week by longtime Parkway resident and former movie studio exec Henry Borgese, is directed at building manager Judith Dale, and seeks to nullify a 20-year employment contract she received from the board.
Dale oversaw a window replacement project at the 144-unit building during the summer of 2002. In a letter announcing the project, Dale told the residents that the work would be done at no cost to the owners.
"The common charges and assessment will not be increased," Dale wrote. "We are able to finance this project without passing the expense on to you."
The letter goes on to say that a state grant, a large operating fund surplus and other factors allowed Dale to put the $667,258 deal together in such a way that no additional money would be needed.
So Parkway residents were stunned late last month when they received a second letter, from G. Michael "Mickey" Brown, head of the Seneca Niagara Gaming Corp. and president of the condominium board of directors, informing them they'd have to pay for the windows after all. Furthermore, the $667,258 originally budgeted for the project had ballooned to $843,000.
Additionally, owners were tagged with a second surcharge in order to pay for a $155,000 budget deficit.
The amount varied depending on the size of the unit, but one of the letters made available to the Reporter was typical.
"Beginning Feb. 1 you will owe a special assessment in the amount of $1,017.29. This is due over three months but those who can afford it are encouraged to pay in one lump sum. The proceeds will be used to get the condominium out of debt and current on all outstanding liabilities," Brown wrote.
And there was more.
"Beginning on March 1, you will owe a monthly surcharge payment in the amount of $68.36. This will be used to cover future principal and interest payments for the loan used on the window project," he added.
Thoughtfully, Brown provided information on how owners could take out home equity loans to help pay for the project they had been told they weren't going to have to pay for.
"We regret having to do this at this time but we are in a financial situation that we all need to work together to bring the building back into the black and to prepare for the future of the building," he wrote, mangling the English language in the process.
The owners were outraged and demanded an outside audit. Dale, Brown and other members of the board said they couldn't find an outside accounting firm willing to perform one.
"The suspicion is that there's been a misappropriation of funds," said one resident, who, like many others, would speak only on the condition of anonymity. "The financial statement shows that, at the end of 2002, there was a surplus. So now we're down $155,000? Where did it go?"
Former Niagara Falls City Council secretary Muriel White, who has lived in the building for 17 years, now heads the Parkway Owners' Group, a tenants' association. She has led the drive for the board's ouster.
"We just want to know what's going on," she told the Reporter. "If we find out nothing is wrong, at least we'll have the peace of mind of knowing."
White said several red flags have been brought to her attention, including a $13,000 cell phone bill racked up over a period of 10 months by condominium employees and a $7,000 line item in the most recent financial statement attributed only to "miscellaneous."
"The owners have been treated terribly in all this," she said. "Both the board and the management seem to think the people who live here are renters instead of owners."
Other residents contacted by the Reporter told of being harassed after speaking out at board meetings or signing the board removal petition. They point out that one member of the board, Orlando Marra, is Judith Dale's uncle, and charged that Dale and Brown are linked romantically.
In addition to the Borgese lawsuit, prominent local attorney John Bartolomei is also threatening legal action. His son, John Bartolomei Jr., owns a suite at the Parkway.
Bartolomei questions why the owners weren't informed they would be responsible for a loan they didn't authorize, and also wonders who would lend the Parkway such a considerable amount of money when there was seemingly no mechanism in place for paying it back.
"In sum, it appears that a special assessment and a loan surcharge are being imposed for unauthorized purposes and that there doesn't appear to be controls in place for the proper expenditure of these funds," he said. "They need to explain and correct this."
For Bartolomei, the bottom line is Dale's original letter.
"We were told the replacement windows wouldn't cost us anything," he said.
White, Borgese, Bartolomei and more than 100 other Parkway owners want answers. They want to see the 2003 financial statement, which hasn't thus far been made available. They want an independent audit of the condominium's books. And they want at least a couple of the board members replaced, something that will be taken up at a special meeting next month.
These moves may not represent an end to the burgeoning scandal at the city's poshest condo, but only the beginning. The suspicions of many owners go far beyond anything that could be chalked up to simple bookkeeping errors.
If they are right, the matter could quickly move from the civil to the criminal courts here.
| Niagara Falls Reporter | www.niagarafallsreporter.com | February 10 2004 |