Builder of collapsed Surfside condo was a partner in another Florida project that went bust

Long after he built the Champlain Towers South in Surfside, developer Nathan Reiber became a partner in a company that converted a 377-unit apartment complex in Coconut Creek into condominiums.

While that project did not suffer the same tragic fate as the Surfside collapse, it did not end well for the investors or for the dozens of buyers who soon found themselves in foreclosure.

Reiber spent the latter part of his career as a partner in a business that was brought down by bankruptcy, foreclosure and accusations of underhanded financial dealing.

The South Florida Sun Sentinel looked at Reiber’s corporate registrations, official records in Broward and Palm Beach counties, civil court filings and newspaper archives to determine whether Reiber, who died in 2014, developed any buildings in the two counties.

The investigation found no evidence that Reiber, who moved to Miami Beach in the 1970s and became immersed in business and civic life there for most of his remaining days, was involved in any construction projects in Broward or Palm Beach counties.

William M. Friedman, the architect of record for Reiber’s three Champlain Towers projects, is credited in local newspaper archives as designing just a handful of low-rise buildings, mostly apartment houses, during the 1960s and 1970s. Several of those have already been replaced by newer structures.

Reiber’s stint as a high-rise developer in the mid-1980s seemed to be short-lived. Before and after he completed his tower projects, records show that he made his living primarily as a real estate investor. Along the way, he had many partners.

Reiber and partners started as apartment investors

In he early 1970s, he formed partnerships with other Canadian businessmen to buy apartment buildings in Miami-Dade County. South Florida was enjoying one of its many real estate booms, and the partners believed rising rent prices would deliver healthy profits. To complete the transactions, they formed companies with names like Damir Holdings, Irber Holdings, Citron Estates (after partner Max Citron) and Reiber Estates.

Eventually, Reiber formed or was a principal in 30 Florida companies, according to the state’s Division of Corporations online database.

Real estate transaction stories in the Miami Herald reported purchases by Reiber and his partners of at least three apartment complexes on North Kendall Drive between 1973 and 1974. But recession hit the country in 1974 and the apartment market collapsed, a Herald story reported.

The partners sold one of the apartment complexes in 1977 for less than its 1973 purchase price, while another was sold at pubic auction to satisfy debts, the paper reported.

Reiber retired from Ontario, Canada, to Miami Beach in the late 1970s, according to a 2014 obituary, and began investing in properties there. He announced the first of the three Champlain Towers projects, again with Canadian partners, in 1980. The first two towers, Champlain Towers South and Champlain Towers North, were completed by 1982.

A third tower, Champlain Towers East, wouldn’t be completed until 1994 as the partners were slowed by yet another recession and became embroiled in lawsuits with contractors and battles with the city of Surfside over the project’s scope and distance from the shoreline. It was his third and final building, according to a recent Miami Herald story.

Reiber family invests in condo conversions

State corporate records list Reiber and his daughter, Jill Meland, as managing members of two companies, Everglades East Associates LLC and Everglades South Associates LLC, along with Robert J. Wolfarth and his son, Robert J. Wolfarth II.

Official records of Miami-Dade, Palm Beach and Broward counties show no transactions by either company.

But the Wolfarths had by then built a reputation as “condo converters” — businessmen who purchased apartment complexes, allowed leases to expire, and then converted the complexes into condominiums.

A 2001 Miami Herald story reported complaints by more than a dozen residents of a former Miami Beach apartment house that the Wolfarths had converted the year before. The residents said the Wolfarths told them they wouldn’t get their security deposits back because they damaged their apartments — which the residents denied.

None of the Reiber family members show up again with the Wolfarths in any other company registered in the state’s Division of Corporation database.

But court records show they had continued to do business together, as investors or managing members of at least two other Wolfarth-fronted companies.

Nathan Reiber, his wife, Carolee, daughter Jill Meland and her husband Mark Meland — a real estate attorney with the Miami-based firm Meland Budwick — were named with the Wolfarths and two companies as defendants in a 2008 foreclosure suit against Club Caribe, a Coconut Creek-based condominum complex.

Neither Robert Wolfarth Jr. nor Mark Meland responded to emails and text messages seeking comment for this report.

Marketing ‘a little gem’

Records show that the Wolfarths in 2005 purchased what was then called Coconut Creek Apartments, a 14-building, 377-unit complex near the Sawgrass Expressway interchange at State Road 7, and converted the apartments into condominiums.

It was the height of the nation’s real estate boom, and South Florida real estate in particular was selling at a fever pitch, pushing up home prices to unsustainable levels within just a few years.

But that wasn’t yet known in 2005, and the Wolfarths’ new company, Club Caribe Associates LLC, aggressively marketed the former apartments to buyers who were being left behind by the rising prices.

A South Florida Sun Sentinel ad in May 2006 touted: “Across from prestigious Parkland. Adjacent to a protected nature preserve. From a simply unbelievable $159,900!”

In smaller type, the pitch continued by telling readers that Club Caribe, “a little gem of a community,” is “tucked away at the end of a long and winding road.”

And then the ad revealed that Club Caribe consisted of one- and two-bedroom residences “with qualify finishes, great amenities and almost-too-hard-to-believe prices.” What the ad didn’t reveal were the unit sizes — 846 square feet, 1,015 square feet, and 1,130 square feet.

Nevertheless, Broward County official records reveal the units sold rapidly in what turned out to be a vastly overpriced market. More than 200 of the 377 units sold between April 2006 and December 2007, at prices ranging from $139,900 to $298,000.

It wasn’t long afterward before the housing boom came to an end. Only another 30 or so units sold in 2008.

From 2007 to 2010, new owners of Club Caribe condos were hit with 179 foreclosure suits. While foreclosures came at a rapid pace after the 2008 financial collapse, 179 suits in a 377-unit complex is “outrageous,” said Douglas Jeffrey, a Miami Lakes attorney who defended borrowers in foreclosure suits after the housing market crash.

One of the only reasons such a large percentage of foreclosures could have happened so quickly after homeowners bought their new units was if their lenders allowed them to sign contracts without properly evaluating their ability to make their mortgage payments — a common issue that helped trigger the Great Recession, Jeffrey said.

By the time they were served with their foreclosure suits, they likely didn’t know how to defend themselves, Jeffrey said. “These were people who didn’t know what they were doing,” he said, “so they just let their properties go.”

Ocean Bank, which lent Wolfarth $59 million to finance the apartment complex purchase in 2005, filed its own foreclosure suit in December 2008 against the Wolfarths, Club Caribe Associates Inc., South Bay Plantation Associates and the four Reiber family members, seeking all unsold Club Caribe units.

Lawsuits shed light on involvement

On April 9, 2010, the Wolfarths filed for Chapter 7 bankruptcy protection from creditors on behalf of another of his troubled companies, Village at Dadeland Associates LLC.

Units in that condominum complex, on Southwest 82nd Street in Miami, had been taken over by a receiver in June 2009 and the Wolfarths were ordered to turn over title to 15 units after a judge determined their company had stopped paying maintenance fees for the units while still pocketing rent payments.

The bankruptcy petition filed in federal court listed Nathan and Carolee Reiber and Mark and Jill Meland as unsecured creditors. Each couple invested $1 million with the Wolfarths, and each owned a 25% share of the company.

Yet, that doesn’t explain why the Reibers were sued, along with the Wolfarths, by the bank that financed the Club Caribe loan, and Broward County Circuit Court’s online database does not store images of complaints filed prior to 2010.

A 2012 federal court complaint filed in the Village at Dadeland Associates bankruptcy case pointed to a possible reason why.

The Reibers and Melands, the complaint said, went into the partnership with the Wolfarths in 2004 “for the purpose of condominum conversions and to get in on the real estate bubble.”

To avoid exposing revenues from condo sales to their creditor, Ocean Bank, the company “transferred numerous sums of money ... from the sale of the condominium units straight from the closing agent to [the Wolfarths], or for the benefit of the [Wolfarths] and all other Managing Members,” the complaint states

The transfers, the complaint states, “were all a part of a design and scheme to defraud the creditors ... and indeed did defraud said creditors.”

Despite the accusations, no one faced criminal charges. Charges of wrongdoing in real estate were rampant after the economic crash, but most cases were resolved outside of the criminal system.

Both the Club Caribe lawsuit and Village at Dadeland bankruptcy case, which did not name the Reiber family members as defendants, were settled. The Reibers and the Melands were removed as defendants in the Club Caribe foreclosure suit before it was resolved.

Control of Club Caribe was transferred to a receiver, who sold it to a company formed by Isram Realty Group for $8.2 million. And today, Club Caribe is again operating as an apartment complex, with Isram owning 200 of its units, according to a Broward County property search.

It’s tucked away just east of State Road 7, north of the Sawgrass Expressway and next to a Hampton Inn and Suites. And if you zoom into an aerial map on the Club Caribe Apartments website, you’ll see the “preserve” is still there.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. You can reach him at [email protected] , on Twitter @ronhurtibise or by phone at 954-356-4071.

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