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At the groundbreaking, Osborn met Robert Greenlee, a well-known investor and former mayor of Boulder. He introduced Osborn to Michelle Brokaw, a capital funds manager for the firm Fleisher Smyth Brokaw, which had a stake in the nearby 1800 Glenarm building. They begin talking about redeveloping the building as a luxury residential tower that would build off of One Lincoln Park's success. They saw a possibility for creating an entire new neighborhood of high-end high-rises called Lincoln Park.
By that July, Brokaw had created a proposal to revamp the drab offices at 1800 Glenarm into a condo development called Mondrian City Homes. She and Osborn began shopping around for investors.
Flush with construction projects, the Osborns decided to upgrade by buying the 7 Polo Club mansion for $6.5 million. The ostentatious home dwarfed its neighbors even in the upscale Polo Club, whose residents include Phil Anschutz and Walter Isenberg. Osborn seemed to be doing so well that One Lincoln Park investor Blair Richardson, a prominent Denver Republican and managing partner of Bow River Capital Partners, floated his name as a possible candidate for a state-cabinet level job recruiting and relocating companies to the state.
But even as the Osborns were hosting high-society charity events at their Polo Club home, the Diamond Loft project, too, was coming undone. It was now eight months over schedule, and contractors were starting to file liens and lawsuits for lack of payment. The Buchanan Yonushewski Group claimed it was owed over $300,000. Juan Perez of Valverde Stucco was awarded $12,000 in small claims court. Osborn attributes the problems to the project management company, which he says wasn't issuing payments.
Still, things soon went from bad to worse for Osborn. In August 2006, Raymond filed a civil suit alleging that Osborn had nabbed $704,910 in unauthorized draws from company accounts. And this was after an arbitration group had already awarded Raymond $144,000, after determining that Osborn had marked up invoices for subcontractor work on the Roslyn project and taken constructions funds for his personal use without the knowledge or approval of his partner or the bank that had loaned them the money.
The suit claimed that the general contractor on Roslyn, Oceanview LLC, was essentially a front created by Osborn and Steve Philipot, an Englewood-based construction manager, to inflate invoices and redirect money to pay for improvements on the home at 1991 East Alameda. Indeed, several building permits obtained by Westword show that at least $125,000 of the work done on the East Alameda home was listed as being billed to entities under the umbrella of Solen, LLC.
"Oceanview was only a conduit through which funds would pass, and it performed no work, or management, on the project," asserted one motion filed by Raymond's attorneys. "Rather, substantially all of the actual demolition and construction work was performed by subcontractors hired by the Osborn defendants."
Raymond declined to comment for this story, as did Philipot. But in a legal motion filed by his attorney, Philipot acknowledged that Osborn submitted fraudulent invoices and took "draws upon the project's construction financing for work and materials that were actually related to non-project endeavors, including his home." The motion asserted that this occurred without Philipot's knowledge. And two people involved in One Lincoln Park, broker Julie Gelfond and her husband, Larry Gelfond, an attorney, filed two separate lawsuits against the Osborns. The Gelfonds allege that they were not paid a total of $264,000 in lawyer and broker's commissions for the project. In another case, they claim that Osborn bilked them out of tens of thousands of dollars on a home remodel he was heading for them at 20 Cherry Hills Farm in Greenwood Village, money that was instead funneled to improvements on his East Alameda home.
The Denver District Attorney's Office soon opened an investigation into Osborn's practices. The probe started in early 2007, after "an allegation was brought to us by one of the victims," says DA spokeswoman Lynn Kimbrough. Prosecutor Morales declined to be interviewed for this story, but he led a grand jury considering the Osborn case.
After calling Osborn in 22 times to testify about his various projects, the grand jurors handed down an indictment on two counts of felony theft on December 12, 2007, claiming that Osborn had rigged the bidding process on Cedar and One Lincoln Park to pay for improvements on his East Alameda home.
The Mondrian project quickly disappeared as Brokaw and Greenlee voted to remove Osborn from his position as project manager after noticing that subcontracting work there had been marked up. Brokaw, who also has a lawsuit pending against Osborn, says the building has since been sold to another development group to be converted into office condos. Osborn was also bumped from his management position at One Lincoln Park and replaced by Ed Cerkovnik, owner of Breckenridge Brewery, who had invested heavily in Diamond Lofts. Osborn fired back at his accusers, filing countersuits against Raymond, Brokaw and Greenlee.
In September 2008, One Lincoln Park opened with 80 percent of the 180 units allegedly pre-sold, but the credit crisis caused loans for many of the buyers to evaporate. Currently only 58 units, or 32 percent of the project, have been sold, according to property records. Most of those sold have been in the $300,000-to-$600,000 range. A $1.2 million unit was bought by a Chicago investor in January, but the mega, $3 million, 6,000-square-foot penthouse has yet to be sold. Of the 122 remaining units, 33 of them are considered held by Osborn's former company EO, LLC.