Friday, Nov. 14, 2008 | 2 a.m.
Beyond the Sun
As if the problems at Streamline Tower weren’t bad enough.
Since it opened May 1, the swank downtown condo has had trouble trying to sell its 275 units.
Now Streamline Tower is facing a federal lawsuit from 48 disgruntled buyers who claim the condos they purchased are significantly smaller than advertised, and that Streamline falsely promised that buyers could make money by placing their units in an “executive leasing program” to be rented out like hotel rooms.
The suit filed last month in U.S. District Court also claims Streamline and Executive Locations — a local leasing company also named as a defendant — violated federal racketeering laws.
The suit alleges the “fraudulent scheme” between the two companies was to “misrepresent the ability to operate Streamline as a hotel/condominium project and lease the condominium units” for a rate of $3,500 per month.
The buyers are asking for their deposits back, court-ordered protection of their money in the meantime, and damages in excess of $10,000.
In court papers, Streamline has denied any wrongdoing. The company argued in its Nov. 4 filing that the alleged falsifications “are completely refuted by the clear and unambiguous terms” of the purchase agreements.
According to Susan Allen, Streamline’s sales director, sales agents were never supposed to guarantee their ability to lease sold units. Since she began working there as sales director 15 months ago, no one has guaranteed the units could be leased for cash, Allen said.
She speculated that some buyers involved in the suit are trying to get out of their purchases because they’re having trouble in this economic climate obtaining financing to close on their units.
As of June, 57 percent of the units had been sold, and 27 of 275 units had closed.
The good news is the vast majority of owners are happy with their purchases and aren’t planning to “flip” the condos to try to make quick profits, Allen said. They’re long-term investors excited about downtown prospects, she said.
Executive Locations President/Broker Cherrell Tarantino also denied the plaintiffs’ claims. Executive Locations is a Las Vegas-based company that provides fully furnished, privately owned accommodations for business executives.
She told the Sun in an e-mail, “There are absolutely no grounds for our being named in this lawsuit at all. The case is against the developer ... Our company did not sell the units nor are we affiliated with Streamline Tower.”
The 48 plaintiffs — all but 15 of whom are California residents, according to the suit — claim their concerns about Streamline began early in the process.
When they entered purchase agreements, most of the plaintiffs thought the tower would be completed by December 2006. That was delayed a year, and another delay resulted when Streamline couldn’t obtain a certificate of occupancy for the units, according to the suit.
Although each buyer in the lawsuit has put down a deposit down ranging from $30,000 to $90,000, none has closed on a unit.
At least some of the plaintiffs claim to have purchased the Model A units, which they say they were told measured 996 square feet. But, according to the suit, they got 600-square-foot units.
Allen said drawings plaintiffs saw before buying — the building wasn’t yet constructed — contained square-footage estimates, not guarantees. Some buyers ended up with condos larger than promised, she said.
Another concern of the plaintiffs is the lack of retail tenants on the first floor. During a quick walk around the building Thursday, all retail spaces appeared to be empty.
In June, a broker working with Streamline, Liz Clare, said a market/deli was days away from signing an agreement for one space. Clare said this week the market has the lease agreement “in hand” and is poised to sign it.
To be sure, the story regarding downtown redevelopment is far from one-dimensional.
Neonopolis, the mall across Las Vegas Boulevard from Streamline, has experienced a significant resurgence of late. The Fremont East District just to the south of the tower likewise has been seeing several signs of business and civic growth.
The trick now, Las Vegas Mayor Oscar Goodman said at a recent news conference, is to find residents for downtown condos, many of which have been struggling, but none more so than Streamline Tower.