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Davidson order worth millions to Landmark owners

 

Highlights:

  • Lawyer says order incredibly favorable to Landmark condo owners.
  • Order could save owners $22 million in taxes.
  • Zack Davidson’s illegal use of funds suspected of being far more than awarded amount.
Landmark Tower.

Landmark Tower.

A judge’s order that traces its roots to illegal activities by the deceased developer Zack Davidson “is very favorable” to condo owners in the Landmark tower in Greenwood Village developed by the once high-flying Davidson, according to the lawyer who successfully used the state’s Tabor Amendment to win the case.

The order could be worth more than $22 million to the condo owners in the Landmark and Meridian towers, far more than the $384,611 stated in the order issued last Friday in Arapahoe County District Court by Senior Judge Donald W. Marshall, Brian K. Matise, of the law firm BurgSimpson said on Monday afternoon.

“I believe that judge’s ruling is very favorable for our clients and the taxpayers,” Matise said.

“If you just look at the $384,611, plus the 10 percent per year penalty since 2009, that is just the tip of the iceberg,” Matise said.

The biggest part of the settlement is actually what condo owners will not have to pay in taxes going forward, he said.

The judge issued a declaratory judgement and  injunction preventing the Marin Metropolitan District, created by Davidson, to assess any taxes against the Landmark owners going forward.

“We estimated that will save each resident an average of $3,000 in taxes each year,” Matise said, by not having to repay the $30.5 million in bonds issued by the Marin district.

“For the next 15 years, we estimate that could save residents $17.5 million to $22 million,” he said.

Brian K. Matise

Brian K. Matise

In addition, the judge ordered any taxes paid above 50 mills is a violation of Tabor.

“Our back of the envelope estimate is that refund is worth about $740,000,” he said.

The judge also ordered that the Landmark Tower Associates that he represented will recoup all the attorney fees from Marin.

“I don’t know how much that will be,” he said. “I haven’t calculated the hours yet.”

The $384,611 was the minimum amount that the judge could say with conviction was illegally misappropriated by Davidson in 2008. Davidson, who killed himself in January, was facing 20 felony counts for theft, forgery and embezzlement in Arapahoe County regarding the European Village development.

The Landmark Towers Association Inc. represented by Matise, estimated Davidson misappropriated almost $5 million of $8 million that the Marin district paid out. Davidson, once a high-flying developer, planned the European Village next to the mixed-use Landmark development east of Interstate 25 off Belleview Avenue.

Judge suspected Davidson misappropriated more

“I think the judge was being very conservative and chose the minimum amount that was illegally used that was supported by the evidence,” Matise said.

“As the judge said, he suspected that the amount was much higher.”

Asked he would appeal to seek more money, he said he didn’t know.

“On balance, I would have to say given how overwhelmingly favorable to our clients, I’m not sure if we will appeal,” he said.

He said he believes one asset Marin might have is a professional misconduct lawsuit it filed against the former lawyer, Realtor and accountant that worked closely with Davidson on the project.

“Marin might have additional assets, too,” he said.

Denver lawyer John McNamara, who represented Marin, could not be reached by phone and has yet to respond to an email request.

Matise built his case on a novel tactic — Tabor, or the Taxpayers Bill of Rights amendment that requires a vote before state and local governments can raise taxes.

“It’s very novel,” Matise said. “The reason is there hasn’t been very much case law on Tabor used in this way. This is the first time, to my knowledge, that Tabor has been used to remedy past actions like this and address future additional taxes sought to be paid.”

Because this was at a district court level, the order only pertains to this individual case, he said.

“If it were to be appealed and the Court of Appeals or the Colorado Supreme Court publishes an option, than it could be precedent-setting,” he said.

On the other hand, the development by Davidson may be so unique that this case would not have much relevance to future disputes.

“This case did have a number of unique elements,” Matise said.

Interested in buying a condo unit in Landmark? Please visit COhomefinder.com.

Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.