The Vail developer Peter Knobel must reportedly spend an extra $20 million to demolish an aging condo building and construct a new one because holdout condo owners sued.
“My client is frustrated at how long this has taken,” Matt Morr, an attorney for Knobel’s development firm, Solaris Group, told an Eagle County judge at a hearing July 15.
“The case is nearly a year old, and in that time the delays to the project from starting last April to now starting this coming April has meant a $20 million increase with our general contractor,” the lawyer explained. “So, we would like to get the case moving.”
Knobel, a co-founder of Native Roots Cannabis Co., wants to knock down the 50-year-old Evergreen Lodge hotel and Vail Inn Condominiums, which share 250 S. Frontage Road. To do so, he has spent years acquiring a majority of the 19 condos and taking control of the condo board.
That plan hit a snag last August, when five holdout condo owners sued to stop Knobel. They claimed he reneged on agreements to give them condos in the future building and used lowball appraisals in his buyouts. Judge Paul Dunkelman initially halted Knobel’s development.
But Dunkelman has grown weary of the holdout owners’ cause. Meanwhile, only three holdouts remain: Peter Sallerson and George and Mary Cavanaugh. The other 88% of Vail Inn owners have voted to dissolve the condo association and let Solaris acquire all condos.
“We oppose the fact that they say they sold our clients’ property,” Matt Ferguson, lawyer for the Cavanaughs, said at last week’s hearing. “We don’t agree with anything they’ve done at all.”
The case is so contentious, and the parties to it so uncooperative, that the Cavanaughs and Sallerson are refusing to accept Knobel’s money. Instead, the $1.7 million he would like to pay Sallerson and $1.5 million for the Cavanaughs will be deposited in a court registry.
“The money’s got to go somewhere,” the judge noted.
The case has moved at a snail’s pace, bogged down by six hearings, countless motions and one appeal, which is still pending. Another appeal is likely to follow a Sept. 14 hearing and Dunkelman’s decision on whether to pause a demolition of the Vail Inn.
“If I grant that injunction, you’ll appeal,” Dunkelman told Morr, the Solaris Group attorney, last week. “If I deny the injunction, Mr. Cavanaugh appeals it.”
That would put Knobel’s April construction plans — and budget — further in doubt.
