JERRY McBRIDE/Durango Herald
Three years ago, homeowners at Rivergate Lofts noticed defects in the riverfront development across the river from the Durango Mall.
Patios funneled water into the condos, sound seemed to travel through cement and floors were cracking. As the homeowners association looked into the problems further, it became apparent that there were significant stabilization issues and structural support of the building was flawed.
Without money to pay for such vast repairs, the association filed a civil lawsuit that spawned into several other claims and counterclaims, most of which were settled out of court.
With the last phase of the lawsuit settled in May, the association is moving ahead with a $16 million reconstruction effort to stabilize and repair the four buildings in the development. The cost of such extensive reconstruction rivals that of the original development and has the potential to provide a big boost to Durango’s construction industry, a homebuilder official said.
The first phase of the construction project, which focuses on parking lot repairs and stabilization, began last week, a relief for homeowners who stuck it out through the litigation process.
“The owners are being made whole,” said Julie Beckett, Rivergate’s property manager. The construction will make the buildings even better than they were when first constructed, she said.
The homeowners association is financing the project with part of the money from a $26.4 million settlement it reached last year with the developers, Rivergate Loft Partners LLC and various other entities involved in the project.
The construction is expected to last until the end of 2013 and will affect every owner within the development as crews strip and replace the outer envelope of the building, including the stucco exterior and outside masonry, stabilize the building’s foundation and install stabilizing walls in many units.
Three units will need to be completely or partially gutted, and multiple residents will need to evacuate their condos for as long as a few months. Most businesses in the development are expected to continue operating throughout the construction.
The project is a major one for Reconstruction Experts, the Denver-based general contractor for the project, said Jeremiah Franks, vice president of the company’s southwest region. The size and scope of the project was a major reason why the company opened an office in Durango, Franks said. The company’s work on Rivergate also attracted the attention of other businesses that have since become clients.
“We plan to be here for a long time,” Franks said.
Such a big project has the potential to make a “significant” impact on the local construction economy if the project uses local builders, said Janet Enge, executive officer of the Homebuilders Association of Southwest Colorado. Doug Ware, president of the homeowners association, said most of the subcontractors on the project will be local.
The Rivergate complex was built in 2003. The buildings are 17 percent commercial and 83 percent residential space, which equates to 68 condo units. City calculations, which are based only on square footage, show the buildings are valued at $10,738,000, but litigation documents showed they are actually worth more like $20 million, Beckett said. The settlement costs reflect the fact that rebuild projects many times cost more than original construction costs, Ware said.
For the 82 homeowners represented by the homeowners association, the settlement brought relief, Ware said. When problems were first discovered, many people were in denial about what was going on and others opposed the lawsuit, afraid it would affect their ability to sell or get financing on their mortgages, Beckett said.
The “lion share” of the deficiencies were unbeknownst to homeowners until contractors hired by attorneys investigated extensively.
“Nobody anticipated the magnitude of the project,” Ware said.
No one expected such fundamental flaws in the idyllic riverside development.
“You look and you say ‘how could there be that much wrong with this place?’” he said. “What lurks beneath?”
Now, they finally know.