Tensions escalating between ESJ Tower residents and St. Clair management co.
The ESJ Tower, a mixed-use beachfront residential condominium that has stood in the Isla Verde sector in Carolina for more than 45 years, has for the past six years been the epicenter of tensions between its residents and developer Keith St. Clair over a number of issues that have reached the courts and government regulatory agencies.
St. Clair moved to the island in 2015, and became president of in ESJ Tower Inc., the company that manages the condominium. He soon began making changes to the structure that raised concerns from a group of owners who rejected the actions that they said were done illegally and without discussion.
Among other things, the owners were upset when the ESJ sign was taken off the building — after it was rebranded as the ESJ Azul — when a wall that divided the tower from a building next door that will soon become the Jade hotel also owned by St. Clair was demolished without notice, and the construction of a sales/service counter in the lobby area, among other actions.
The owners claim St. Clair was systematically taking away the building’s identity to turn it into his hotel. However, the developer said the investments were done to improve the value of the building.
“Some people are very resistant to change and the changes we’ve made have improved the building, the value of the property was going up, real estate prices were going up which was a benefit to them and to me,” St. Clair said.
“I own two units in the building, I believed in the future of this building, but all that has been happening through this is that the future is being damaged,” he said.
The rift deepened in 2019, when the owners called and held elections for its board, which is identified as Board of Directors of the Council of Co-Owners, now chaired by long-time resident Chana Cohen. Meanwhile, St. Clair argues he’s the actual board chair because the elections were held illegally, and has been making decisions over the property.
In an interview with this media outlet, Cohen said while building owners held an election and constituted the board in June 2019, voting her and other board members in, there is no proof that St. Clair held an election or won.
“There is only one legally elected board that he calls the Cohen Group. I call it the board of directors of the ESJ Tower. After many years, we followed the law,” she said. “He was never elected and there’s no proof of him becoming president or anything. He can claim whatever, but he needs to show proof.”
That dispute has been taken up with the Puerto Rico Department of Consumer Affairs, which has been asked to appoint a third-party trustee to oversee the building’s finances, among other aspects. The agency has yet to make a decision.
The ESJ Tower has 451 units broken down as follows: 177 are privately owned by residents who either live there or keep the unit as a second home; another 273 units are owned either by ESJ or an affiliate of ESJ Tower Inc., of which 218 are used for time-sharing and 55 are used as regular hotel units under the Mare flag.
Another point of contention is that there are apparently utility bills and other payments that have been piling up, including $500,000 due to the Puerto Rico Electric Power Authority and $360,000 due to the Puerto Rico Aqueduct and Sewer Authority, as well as to a number of vendors, according to documents obtained by this media outlet.
Some of those vendors have taken their claims to local and federal courts to collect.
Cohen said she has been getting bills from before she took her position on the Board in June 2019, “so how can I authorize payments from 2016 and 2017? I’m asking myself why he didn’t take care of this. A good organization and management company should pay on time.”
She further noted that the board has been asking St. Clair to turn over numerous documents related to the building’s budget, unsuccessfully. St. Clair said that owners receive an annual audited financial report breaking down the numbers.
St. Clair said that payment plans have been worked out for the amounts in arrears and that the reasons why the bills haven’t been paid is because checks need to be co-signed by him and the HOA board, which apparently has not happened.
Meanwhile, the residents claim that St. Clair has been dipping into the HOA funds to finance his projects outside the ESJ Tower, to which he responded that the assertion is an “absolute lie.”
Residents claim he has been selling assessments to get cash up front, an issue that came up in a case that was filed earlier this month in a New York court and later dismissed.
Residents also state that St. Clair used money from claims filed to Chubb Insurance to repair damages caused by Hurricane María to pay for other ventures. St. Clair said the management company filed a $6 million claim, which after the $1.2 million deductible, left $4.8 million that was put into the building.
“We subsequently filed a $21.6 million supplemental insurance claim after an assessment found further damages. I went ahead and spent my own money on repairs, because we don’t have that yet,” he said, attributing the disbursement delay to a lawsuit filed by the homeowners against the insurance company in August 2019 at the Bayamón Superior Court that has yet to be resolved.
Luis Daniel Muñiz, St. Clair’s attorney, said the mixed-use property was structured during a time when time sharing didn’t exist, making the ESJ Tower “a very complex place to manage.”