'Even Worse Than Feared': St. Regis Residents Accuse Qatari Owner Of Covering Up Damage Amid Lawsuit

Residents of the St. Regis Bal Harbour condo-hotel are accusing its Qatari owners of covering up mold and possible structural damage in an effort to avoid being held liable for repairs.

The condo association representing the 204 condominium units at the luxury resort at 9703 Collins Ave. initially sued the property's owner in November, alleging years of neglect and absenteeism had created unsafe conditions. 

In the months since, the association has brought in a multitude of inspectors and experts to assess the damage and has tried to enlist the fire department, state health department and even Marriott International, which owns the St. Regis brand, to try to address the state of the property, which was developed in 2012.

In an amended complaint filed in Miami-Dade Circuit Court last month, the residents said building management has painted over mold and covered up concrete cracks with cardboard in an attempt to frustrate a court-ordered visual inspection of the property.

The condo association of the building says the safety risks that prompted a legal dispute are not only worse than expected but that the hotel's owners are trying to cover them up. In the meantime, residents are taking matters into their own hands, digging up multiple fire codes and permit violations for elevators in the building.

“Conditions at the property are even worse than feared,” the amended complaint reads. “The experts have identified conditions that pose a serious threat to the buildings and their residents, including potential collapse due to deteriorated structural elements.”

The Bal Harbour North South Condominium Association filed the complaint against Al Rayyan Tourism Investment Co., which paid $213M in 2014 for the property; its CEO, Tarek El Sayed; its head of U.S. asset management, Gregory Polino; and its local subsidiary that controls the property, Seldar Miami Holding.

The condo association asked the court to step in and order ARTIC to make repairs, claiming the Qatari owners neglected basic maintenance of the garage and common spaces for years and took $1.5M from the condo board’s reserve fund to renovate the hotel’s restaurant.

A spokesperson for Seldar said in a statement that some repairs have already been completed, and it plans to do more if the court orders it.

“From the beginning, the Plaintiff in this matter has been irresponsibly spreading unfounded and exaggerated claims,” the spokesperson said in a statement. “The fact remains that the Court is overseeing a thorough process to look into alleged issues at the property, and experts engaged by both parties have been reviewing the matter.”

The amended, 175-page petition filed last month included the reports of structural engineers, building enclosure experts, mechanical-electrical-plumbing specialists and toxicologists who visited the property for a 10-day visual inspection in January, dubbed “Phase 1” in the suit.

Experts “observed additional instances of almost every kind of damage,” the lawsuit said.

The experts found cracks and breaks around support columns at the base of the building — indicating distress in the structure — damaged concrete on the garage roof that poses a falling debris risk, crumbling and leaking building enclosures, and continued widespread mold contamination, according to the petition.

“I didn’t think it would be this bad, but I still don’t know how much worse it could be because they have been uncooperative,” said Steven Leoni, a five-year resident and member of the condo board.

Experts found the cracks in the concrete of the parking garage suggest a potential punching shear failure, which is when too much pressure causes a support column to punch through the concrete slab it’s supposed to be holding up.

Punching shear is one of the issues believed to have contributed to the 2021 Champlain Towers South collapse in Surfside that killed 98 people, CBS reported.

“As of right now, our experts have not identified a risk of imminent or immediate collapse,” Isaac Saidel-Goley, an associate at Quinn Emanuel Urquhart & Sullivan LLP who is representing the association, told Bisnow. “But if the structural issues that our experts have identified are left unaddressed, then there is a risk of at least partial collapse.”

Corrosion experts found that the garage floors were flooded, broken into fragments and showed signs of chemical leakage, calling the conditions “poor” and “severe,” according to the filing.

The attorneys wrote that the inspection was further complicated by the defendants’ alleged attempts to conceal the conditions outlined in the original November complaint. 

In the initial suit, the condo association’s environmental experts reported widespread mold, high humidity and corroded HVAC systems. In Phase 1 testing, inspectors reported the contamination had been painted over, which they were able to identify because mold was still growing around the paint, according to the suit.

Leoni described the efforts as “destroying evidence” before experts could assess the situation.

“Nothing surprises me anymore,” Leoni said. “But, yes, I was very surprised to see how things started to get covered up and done improperly or illegally intact.”

The St. Regis Bal Harbour’s North Tower also has eight active fire code violations stemming from a March 20 inspection, including exposed rebar, ceiling spalling, missing fire sprinkler inspection records and failure to maintain exit signs, according to a Miami-Dade Fire Rescue spokesperson.

The building has 30 days to correct the issues until the next inspection, with a possible 15-day extension if the issues still aren’t corrected. But if the violations still exist at the time of reinspection, it’s the condo association that gets penalized, according to MDFR.

Only three of the property's 25 elevators across the resort and condo towers had valid certifications as of last month, according to a March 29 email from Marriott Senior Vice President of Global Residential Operations John Hearns obtained by Bisnow. 

Marriott declined to comment on the state of the St. Regis Bal Harbour.

Because ARTIC owns the hotel property, the condo owners have little recourse to get it to take action on the common areas shared with residents, including the parking garage, because of recent changes to the Florida Condo Act, Leoni said. State law grants commercial lot owners of condo-hotels total control over common areas, including the ability to assess and manage maintenance and renovations, The Real Deal reported.

“We suffer because we don't control any of our common areas in the North and our South towers,” Leoni said. “We have no control, and that's a lot of, I think, what precipitated a lot of these issues.”

The law is a stark contrast to current regulations on condo reserves, as it shifts the responsibility of funding and managing building safety away from the condo associations, which faced the deadline for stricter requirements in December for structural integrity evaluations and fully funded reserves.

“At least in a normal condominium, they can pretty much self-govern and control their own destiny,” Leoni said. “Condo-hotels, we sort of are at the mercy of the business that they're operating, which is the hotel, and that seems to take priority over the health and safety and the lives of the actual condominium owners that own and live at the property.”

Other condo associations at condo-hotels are going through litigation with their lot owners, like the Icon Brickell, where a unit owner sued over the commercial lot owner's control of common areas without the input of the condo owners, TRD reported.

Leoni, who lives at the St. Regis Bal Harbour with his wife and two adult children, said this law was one of the reasons residents decided to move forward with the lawsuit. But while it may lead to repairs, it also has the chance to damage their investment.

“It affects our property values. That's why I don't think the position was made lightly to bring a lawsuit, because it's not something anyone would want,” Leoni said.

The Phase 1 assessment of the damages was meant to lay the groundwork for a proposed Phase 2 involving destructive testing. The process would involve applying stress and force to a material or structure to better understand the building’s strength and performance.

The court will decide the scope for Phase 2 of testing at a hearing on April 25.