A judge has ordered that Vail developer Peter Knobel cannot move ahead with plans to buy a condo building there after residents accused him of hatching a complex and illegal scheme.
On Friday, Judge Paul Dunkelman in Eagle issued a temporary restraining order through Oct. 30 while Knobel and his company attend mediation talks with the condo owners.
Knobel, a co-founder of Native Roots Cannabis Co. and a controversial figure in Vail with a history of legal battles, was sued Aug. 26 by five longtime and elderly residents of the Vail Inn Condominiums, which share 250 S. Frontage Road with the Evergreen Lodge hotel.
Those five say Knobel’s development firm, Solaris Group, has been planning since at least 2022 to demolish the building and replace it with a new condo complex, noting that Solaris’ website has a rendering of that proposed project in its Coming Soon section.
So, in 2022, Knobel began making deals with Vail Inn owners. In exchange for going along with his redevelopment, the five plaintiffs were to receive a unit in the new building.
“Developer and owner agree that the building, inclusive of the Vail Inn, is at or near the end of its useful life and desire for the building to be redeveloped via complete reconstruction into a new project,” those 2022 agreements stated, according to the condo owners’ lawsuit.
By this summer, Knobel owned nine of 19 condos at the Vail Inn and a majority of the condo board’s directors had been appointed by him, according to last month’s lawsuit. They include Knobel, his daughter, his son-in-law, Solaris’ lawyer, and another Solaris executive.
This, according to the lawsuit, is when Knobel pulled the rug out from under owners.
The five plaintiffs say that in June they were asked to sign new agreements, replacing the 2022 deals and removing any guarantee of a condo in the proposed development. When they pushed back, their 2022 agreements were terminated by Knobel’s company, they claim.
“(He) held the unit owners hostage with the promises of a new unit and then terminated those agreements when they no longer served the developer’s interests,” the lawsuit says.
Meanwhile, the condo board hired Newmark to appraise the Vail Inn’s condos ahead of a forced sale. Newmark valued Knobel’s condos facing Interstate 70 higher than the plaintiffs’ more desirable condos facing Vail Mountain, according to the lawsuit, which says Newmark valued the plaintiffs’ units far lower than other appraisers and appraised them without stepping foot inside.
On July 24, a special board meeting was held to decide whether to move ahead with a forced sale of the Vail Inn condos to HCT Member LLC, an entity controlled by Knobel and his Solaris Group. While Knobel abstained, four other Knobel-aligned board members voted in favor, beating out three objecting condo owners, according to last month’s lawsuit.
Sale of the condos and dissolution of the Vail Inn was scheduled for Aug. 27. One day before, the five objectors filed their lawsuit and asked the judge to stop Knobel. The judge agreed to cancel the board meeting and pause any proposed sale of the condos.
“We are disappointed that a few owners filed this lawsuit seeking to block the will of the vast majority of owners who support the project,” Ryan Smith, an attorney for Solaris and a condo board member who is among those being sued, said in a statement to BusinessDen.
“We have followed all applicable laws, regulations and agreements, making every effort to work collaboratively with the HOA and unit owners, including the few owners who filed this lawsuit,” Smith’s statement continued. “We believe this matter will be resolved quickly and look forward to bringing a beautiful, vibrant new development to the community.”
Aaron Goodlock, a lawyer for the Vail Inn board, says his client similarly has done nothing wrong and has “acted in a manner that it believes to be in the best interest of the community.”
The two sides will meet for a mediation Sept. 17 in an attempt to resolve their differences. If they cannot, they will appear before Dunkelman on Oct. 30 and propose next steps.
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