Sexton Condos: Circling the Drain, Facing Possible Foreclosure

by Alex Stenback on July 10, 2007

Arrowwebsexton_ii

The Downtown Journal’s Michelle Bruch has penned a rather amazing article on the ongoing saga at the Sexton Condo’s – a downtown Minneapolis project that has basically degenerated into a tossed salad of mismanagement, suits, countersuits, alleged fraud, etc. etc. etc.

We’ve heard rumblings of major issues down at the Sexton for a while, and Michelle has dug up all sorts of Juicy dirt on the goings on.  Some highlights:

  • The Partners in the development, JJT Construction, Heather Enterprises II, and Medved LP, are all suing each other for among other things, "negligence, fraud, breach of contract, libel, and slander."
  • No more units are being closed in the building pending this litigation.
  • Tenants who payed for garage spaces are now facing the possibility that the garages, part of phase II, will never be built.
  • Units were allegedly being sold at huge markups, with sales commissions to realtors in excess of $100,000.00 per unit.
  • Fraudulent purchase agreements were allegedly created to secure construction financing.
  • More than 7 Million dollars in cost overruns and mismanaged funds.

And much, much more in this edition of "When Condo Projects go Bad" over at the Downtown Journal.
Battle at the Sexton [Downtown Journal]

{ 6 comments… read them below or add one }

Ed Kohler July 10, 2007 at 11:49 am

Wow. I didn’t know about the financial issues, but that development seemed to have plenty of other challenges, such as dark units, views of parking lots, and surrounded by 1-way streets that make it tough to get there.

Editor July 10, 2007 at 11:55 am

Sad thing is, I actually like this building, and it has a lot going for it for a non-mill district or North Loop spot.

The marketing and sales efforts are absolutely what screwed this project up – no transparency, way too many investors who were over promised, and investor-buyers, flippers etc. who were cronies of the developers and some of the agents.

Were this project properly priced and marketed, it would have been a downtown success story. In our opinion this is what happens when you have rank amateurs trying to hit a home run in real estate.

Alexis July 11, 2007 at 1:52 pm

Ouch.

Graphic made me laugh, BTW, Alex.

Kristin July 13, 2007 at 8:46 am

Yeah ive heard about this project for quite some time now and I’ve heard that there are other litigations going on with one of the former realtors [redacted]. Doesn’t he own part of the [redacted]? I remember [redacted] trying to sell these crappy units to me. He told me a sales price on a unit that I was interested in and then I went home and checked the sextonlive.com website and saw that the unit was pricing about 60k less than what he quoted me. I think [redacted] should be in the article with JJT, Heather, and Medved. Its a real sad story because the units were very fairly price and would be a much more viable option for first time home buyers who wanted to live downtown. Did anyone else get tricked into a higher sales price by [redacted]?

Editor July 16, 2007 at 9:21 am

Kristin,

Taken at face value, there looks to be a fair bit of ax-grinding in that post, with no actual evidence – just pure assertion, so I have edited out the name of the person you are accusing of nefarious behavior.

You are welcome to email me offline with any further comments.

Ex Employee December 21, 2007 at 10:44 am

The truth is that the media has only touched on the real truth behind this story! I used to work for Brett Thielen and I could tell you stories. FACTS. FACTS THAT I CAN PROVE!

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