Luxury Gold Coast condominium project developers, Ronald Shipka Sr. and Richard Stein, recently handed over the reins of their Walton on the Park project (located at One West Walton Street) to Dart Container Corp., but they are not handing over the earnest money from buyers who ceased to close on their condos, as the venture continues to retain rights to the money despite revoked ownership.
“Recent lawsuits over the deposits suggest that the developers plan to keep the money, one way for them to salvage a losing investment in a depressed condo market,” said Crain’s.
Brothers, Milan and Dan Kesic are suing the developers in hopes of collecting $58,900 in earnest money as well as damages of approximately $50,000; Gretchen E. Green strives to receive $100,000 back-the desposit amount she paid in 2007, reported Crain’s. Other lawsuits are under way as well, according to the Kesic’s lawyer, Donald Battaglia.
“The buyers aren’t getting what they bargained for,” Battaglia said in the article.
Appraisal Research Counselors said that 26 of the units were under contract, but not closed; in the third quarter, this number was tracked at 77 units. It is unclear how many of these buyers are presently involved in lawsuits.
Stein and Shipka have defended their entitlement to earnest dues, saying that the expected condo completion date of spring 2010 was an “estimate and nothing more,” adding there was “no promise or agreement” in the contract.
In addition to the surge of condo lawsuits that have recently plagued Chicago, these pending cases now also add to Shipka’s growing track record of lawsuits. Shipka is the chairman of Chicago-based Enterprise Cos.
In August 2010, the developer was sued by MB Financial to collect $4.7 million for two Palm Spring California condo projects.
The developer is also notorious in Chicago for lawsuits regarding a South Loop project, in which the developers, Shipka and Gerald Fogelson sued approximately 100 buyers for refusing to close on their units. Recently, they found themselves faced with additional lawsuits due to the developers’ failure to complete units by the originally promised deadlines, giving buyers a valid reason to stray from closing.
Stein has 45 years of experience under his belt and a current position as senior managing director at Mesirow Fianancial; he has been a part of various Chicago developments and facilities, advising several of Chicago’s institutions on the renovation/development of facilities including: The Lyric Opera House, McCormick Place Convention Center, the University of Chicago, The Chicago Board of Trade, the Adler Planetarium and U.S. Cellular Field.