Condo owners allege Francis W. Parker School tried to fraudulently take over their building, call the move ‘morally bankrupt’
The school allegedly used straw buyers to hide their involvement in the purchases.
Condo owners on Thursday vented about a lawsuit they filed against the elite Francis W. Parker School for allegedly carrying out a “covert scheme” to take control of their Lincoln Park building and make it part of the school campus.
“They’ve acted under the cover of night, they’ve acted with fraudulent intent and they’ve done so without regard to the families that live here. And I think that’s not only deplorable, but it’s morally bankrupt,” condo owner Jerry Savoy, who has a son who attends public schools, said Thursday outside the building at 327-335 W. Belden Ave.
The building is just west of the Lincoln Park Zoo.
The suit alleges Parker committed fraud by using straw buyers to hide its ownership of six units in the building.
Two units were purchased last year through trusts without disclosing Parker was the beneficiary of the trusts. And four other units were subsequently bought through an limited-liability corporation managed by Michael Demetriou, the former secretary of the school’s board, according to the lawsuit.
Attorney Michael Cohen, who represents the condo association, said Parker’s involvement was never disclosed, a violation of condo association requirements. The condo association, had it known, would have exercised its right of first refusal to block the sales, Cohen said.
David Bloomberg, an attorney who represents Parker, said, “We cannot comment on the lawsuit, but all of Parker’s actions have been taken with careful regard for applicable laws and guidelines.”
Demetriou is also named in the lawsuit as well as several current and former condo owners alleged to have taken part in the scheme.
“Parker planned to covertly take control of the plaintiff’s residential board and ultimately force those residents unwilling to sell out of their homes,” according to the lawsuit. “And Parker did just that, with its plan nearly succeeding.”
The lawsuit seeks to rescind the sales and return the units back to their original owners.
“This is bad enough if it’s performed by a private real estate developer, but Francis Parker School is a non-for-profit institution tasked with teaching the students who attend that school right from wrong,” Cohen said Thursday.
“We’re advocating for the right to have a voice in where we live and how the places where we live are shaped,” condo owner Christy Foushee said.
One young resident, Ethan Cardenas, 8, decried the school’s actions.
“Parker’s trying to buy our building, and I don’t want to move to a different school or a different house,” Cardenas said Thursday.
The school had previously tried to buy the building outright, but the offer was rejected.
By law, Parker needs 85% of unit owners to sign off on a sale of the building.
“Once they reach that threshold they’ll be able to force the bulk sale of the entire building regardless of whether all the residents want to sell or not,” Cohen said.
Condo owners behind the suit believe Parker will continue to attempt to buy units, he said.
Parker’s ownership has destroyed the marketability of the condos, Cohen said.
“No prospective purchaser other than Parker will want to buy into this building knowing of Parker’s plans. So, in effect, Parker can now unilaterally set the price for any of these units,” he said.