When Jon Granlund bought his condominium in the Four Winds of Oakton five years ago, he had every expectation the complex and his apartment would need upkeep and he would be expected to chip in to help the community with the repairs.
He did not expect his complex to be under threat of condemnation from Fairfax County or to have to join his neighbors in paying off the millions of dollars it will cost to replace dangerous stairwells, columns and other work associated with repairs needed to comply with county code.
At a special meeting tonight, condo owners will vote on how to pay for the repairs: A "yes" will allow the board to obtain a $1.2 million loan and charge owners with a special assessment fee that totals $1.6 million over the course of a year, with 1/3 of the total due Feb. 1; a "no" still holds them to a $1.6 million special assessment fee due Feb. 1 in total.
The entire cost of the stairwell replacement — along with column stabilization, construction management by a structural engineer, county permits, a required fire watch when only one of the two stairs is accessible, and principle and interest payments on the loan — is estimated between $3 million and $3.1 million.
Owners will meet in a conference room of Armstrong Management Services — the property management company — at 3949 Pender Drive, Suite 205, in Fairfax at 7:30 p.m. today to vote.
Headed for Condemnation
Four Winds was built in the mid-1980's, then bought and renovated by Orion Residential in the early 2000s. As a transition property, the condo association's Board of Directors consisted of members of the developer's choosing until the summer of 2011 when it switched to a resident-controlled board.
Five residents — including Daniel Gumbiner, chairman and CEO of the Illinois-based Orion, which owns more than 40 condos in Four Winds — were elected to represent the 366 condo units of Four Winds for two-year terms.
For years, residents have seen the need for work on the stairwells that showed rust, chipped or missing concrete and exposes rebar, Granlund said — and requested the condo's developer, Orion Residential, do something about it. Instead, they saw paint put over the rust on the stairwells in the building where potential tenants were shown model apartments.
In November, the residents of one building — tired of waiting for the stairwells to be repaired — called Fairfax County officials for help. After an inspection, the county Code of Compliance put Four Winds on notice of violation, requiring the stairwells to be replaced.
The board took quick steps to ensure the county it would be fixing the problem as soon as possible — the first hiring an engineering company to survey and shore the stairs — to keep the buildings from being condemned.
Meanwhile, the resident-controlled board was in the middle of an ongoing settlement negotiation with Orion Residential for taking control of the properties. In March, the board settled with the developer for $600,000, which will nowhelp pay down the stairwell replacement costs.
Residents have since pushed back against the settlement, questioning the board's decision to settle for so little when the stair replacement work would cost millions.
But the board says the settlement was never specifically about the stairwells.
"We as a resident-controlled board worked with an attorney, who represents the association and the residents, to come to an agreement with the declarant that we thought was in the best interest of the community," said Brian Wachur, secretary of the Board of Directors. "The settlement amount was not intended to entirely cover the cost of any specific project, including the stairwells."
They argue the board would have done more harm than good for the residents if they pursued litigation or drew out the settlement negotiations — both of which could have cost the board more money and delayed progress on the stairwell replacements, which would have put them in danger of being condemned by the county.
"If there wasn't a notice of violation, we would still be working to replace all the stairs, but we would not be looking to replace five staircases all at once," said Walter Brickman, treasurer of the Board of Directors.
Also, the best estimate available to the board at the time of the settlement put costs for the stairwell replacement at $800,000. The estimate came from a Kipcon Inc. study that focused on how to build up the board's reserve funds to cover expected and unexpected costs over the next 30 years. The study includes a disclaimer that it is for budgetary purposes only, and that bids solicited will likely not match its estimate.
"Put it this way: the settlement is less than we wanted and more than the developer wanted to pay," Brickman said. "The only figure we had to go on was the $800,000. Of course, we found out later it would cost much more."
The board did not know the true cost of the project until about a month ago when it received three official bids based on a design plan from Structura Rehabilitation Group.
Pushback from Residents
While residents largely agree nothing can be done about the settlement at this point, they are raising questions about the board's decision-making process, starting with their choice of lawyer to represent the residents in the settlement.
Granlund took issue with the fact the board kept the developer's attorney, Ursula Burgess of the law firm Rees Broome, as its attorney through the settlement negotiations with her former client.
"I don't know that it's illegal, but it's certainly not smart," Granlund said. "I just don't know what they were thinking. It's just bad decisions."
The current board acknowledges Burgess' connection to the past developer-controlled board, but says it has been more than happy with her work over the past year.
At least one resident has expressed concern the board is overreaching its authority by requiring each owner to pay thousands of dollars in extra fees over the course of one year.
"I do question the legality of this. Is the Board allowed to simply slap assessment fees on the owners when deemed necessary and threaten property liens each time?" read an anonymous letter placed on each doorstep in Four Winds this morning. "... The only option to prevent this from reoccuring is to get involved. In my opinion, the staggering amount of unanswerable property management failures and improper legal manipulation on the backs of property owners needs to end."
In a Twitter conversation among residents and Oakton Patch about the letter, Granlund's wife, Stephanie, wrote she believes the board members should offer their resignation letters.
"[T]he entire Condo Board should resign, as their negligence got us here. They settled [with the] developer [before] knowing costs," she wrote.
The board wants owners to understand they have their best interests at heart.
"We're residents, too. We live in these buildings, we have to pay the special assessments just as much as anyone else. It doesn't make sense that we would agree to a deal that is not in the best interest of the community," Wachur said. "That doesn't mean it was the perfect deal and everyone should be thrilled about it, but it's the best deal we honestly feel we could get."
Barton Webster, who has lived in the complex as a renter then owner since 2003, said he, too, would have liked a better settlement with the developer but hopes owners can move on, accept what now has to happen and see the special assessment as an investment.
He believes some of the residents' frustration stems from their feeling these decisions appeared out of nowhere.
"The board has been talking about the stair problem for a long time," said Webster, who claims to have missed only a handful of board meetings since he's lived in the complex. "It was a priority as soon as the residents took control of the board, but I don't know that the residents who called the county knew that."
Regardless of the board's latest decisions, most agree the problem goes back to poor management and neglect when the developer controlled the property.
Jon Granlund said he witnessed the rust on the stairwells being painted over so interested tenants would not see their poor condition. He's also heard from tenants who moved in weeks ago who did not know a stair replacement project was in the works.
"The developer is absolutely the villain in this whole situation," Granlund said. "But at the same time, the board absolutely mishandled the settlement."