Coup de Condo
Looking back, Sharon Kratze says, she should have asked more questions. When she decided to run for the board of the Cedar Pointe Condominium Association, she thought she was simply campaigning for "constructive change" in the way her community was managed and maintained.
Nobody told her that she was also courting the wrath of the powers-that-be in Glendale, the Naked City.
Kratze is a fairly recent arrival at Cedar Pointe, a 269-unit complex of modest condos off East Kentucky Avenue. Built in the early 1980s, the place offers one of the few opportunities for home ownership in Glendale, an enclave best known for its heavy concentration of apartments, strip clubs and low-blow political brawls. A real estate broker, Kratze moved to the complex in 1999 and soon began attending homeowners' association meetings and volunteering on committees.
Like a lot of Cedar Pointe residents, Kratze had questions about the ever-increasing dues paid to the association for water and sewer service, trash collection and other expenses. The complex has no pool, clubhouse or other pricey amenities, yet the homeowner dues have been hiked three times since Kratze moved in; for her 1,100-square-foot unit, they're now more than $170 a month.
She had concerns about where the money was going, particularly the fees for Tyler Management, the company that administers the complex, and a whopping $72,800 paid annually to a maintenance company to look after the grounds and perform repairs. So last spring, backed by a group of like-minded residents called Homeowners Actively Leading Together, Kratze and two other women decided to run for three seats on the association's board of directors.
The HALT candidates -- Kratze, Christine Weatherly and Heidi Verhey -- worked closely with the group's volunteers to gather proxy votes. Their effort was successful, giving them a majority on the five-member board. Just what the trio promised to do for homeowners has since become a matter of bitter dispute; but at the time, Kratze, who soon became president of the board, had every reason to believe she had the will of Cedar Pointe behind her.
Yet something happened during the campaign that did give her pause. One day Kratze came across an anonymous flier posted in the complex's mail kiosk, urging homeowners not to vote for the HALT group. To do so, the flier warned, would be to place Cedar Pointe in the hands of the Tea Party -- the contentious political faction formed in 1998 by strip-club backers that went on to wrest control of Glendale's city council and several other official positions in the town ("The Glendale T&A Party" January 20, 2000).
Kratze was baffled by the charge. True, some of the HALT people who'd campaigned for her were also members of the Tea Party, but what did Cedar Pointe have to do with city politics?
"I was offended, frankly," Kratze says. "After our first meeting, I pulled Heidi and Christine aside and said, 'Look, I'm not going to be anybody's puppet. We were elected to do this job, and I'm going to make my own decisions.' And everybody agreed that we were all on the same page."
Nearly a year later -- after the shouting matches, the accusations of betrayal, the failed attempt to install a Tea Party associate as the board's attorney, the claims and counterclaims concerning misinformation campaigns, post-dated proxies and a canceled board election -- not many people at Cedar Pointe are on the same page anymore. Now it's Kratze who's lamenting the influence that the Tea Party seems to be exerting in her community, while several of her former supporters charge that she's become a puppet of the management company.
The situation came to a boil two months ago, when two homeowners -- both city officials with close ties to the Tea Party's inner circle -- announced their intention to run for the board. City councilman Larry Harte and community development director Chuck Line say the current board has failed to deliver on promised reforms, and the two have pledged to oust Tyler Management if elected. Their campaign tactics alarmed Kratze and her supporters, who accuse the two of misleading homeowners about the board's actions and plans in order to obtain proxy votes. Citing "certain irregularities in the solicitation of proxies," the board decided to postpone its scheduled election at the end of February -- and that, in turn, outraged Line, Harte and their supporters, who say they've been denied their rightful seats on the board.
"I don't think they had the power to cancel the election," says Line. "I'd love to debate these people in front of the homeowners. We just want the best decisions made."
"This is not a political thing," Harte insists. "The Tea Party has nothing to do with it. This is a group of homeowners who are fed up with the lack of results. It's pretty obvious that we have a tremendous amount of support. People just want a change. If the current board's not willing to do it, we'll go in and make the appropriate changes."
But the pair's opponents point out that Line and Harte have enlisted the aid of the Tea Party faithful, including high-octane attorneys Brian Pinkowski and Chuck Bonniwell, to battle the board. Former Glendale city manager Veggo Larsen -- a Tea Party hire who became the group's ardent enemy and was dismissed last year ("He's Toast," May 16, 2002) -- contends that the party's history of self-dealing, cronyism and awarding questionable contracts should have homeowners asking what sort of "changes" Harte and Line have in mind.
"The Tea Party is led by ideologically bankrupt demagogues," says Larsen, who's also a Cedar Pointe homeowner. "If they take control of the board, that impacts vendor relationships, management companies and the likelihood that Bonniwell and Pinkowski are rubbing their hands, wanting to stir up some litigation and collect their fees."
Harte dismisses Larsen's criticisms as the carping of a disgruntled former employee. "I like Veggo," he says, "but he's a grumpy old guy. He's having a hard time finding a job, and I don't appreciate him taking out his anger on me personally."
But even residents who've paid little attention to the Tea Party's machinations over the past few years have trouble believing that two city officials seeking to steer a homeowners' association isn't a political thing at some level. In the past, when association leaders have gotten involved in city politics, they've resigned their positions on the board, regarding the posts as a conflict of interest.
"It's extremely frustrating," says boardmember Doug Brown, one of the incumbents running against Line and Harte. "I'm open to competition. If they think they can do a better job, that's their right. But this is not a super-wealthy organization, and here we are having to pay lawyers and send out updated information when there are better things we could be doing. I started out doing this position to help out, and all of a sudden I'm dragged into Glendale politics. I feel like I'm fighting City Hall."
Kratze, who's been branded a "rogue board member" on the front page of the Glendale News, a Tea Party-boosting bi-weekly, believes the latest homeowner revolt has little to do with any actual problems at Cedar Pointe and plenty to do with strengthening the Tea Party's hold on Glendale. In a city with only 1,200 registered voters, the condo complex represents a major voting bloc.
"I think they are trying to solidify the Cedar Pointe vote," she says. "Larry and Chuck come off as being very credible. You've got city officials knocking on doors, spreading rumors about the association -- and people will believe it because they don't come to the meetings. They'll believe what they tell them. I, however, think they're going to ruin Cedar Pointe. I fear what these men will do to my community."
Brian Pinkowski, who has represented Line and Harte and their supporters in the squabbles with the board, notes that divisiveness within homeowners' associations is common -- though rarely is the struggle as acrimonious as the one at Cedar Pointe has become.
"While everyone has a common interest, they're sensitive to how their neighbors spend their money," Pinkowski says. "The more local the politics, the more hostile it gets."
Cedar Pointe hardly seems like a breeding ground for a homeowner insurrection. Hemmed in by apartment complexes and big-box stores, the place offers neatly packaged condos stacked three high, with plenty of light, balconies, mature trees and a greenbelt popular with pet owners. But some longtime owners say the property has deteriorated over the past decade, even as the association's expenses have outpaced inflation.
Supporters of a regime change have a long list of grievances, including weathered siding, peeling paint, dead trees and a management company that they consider arrogant and overpaid. Lawsuits against contractors and a special assessment to repair landings and stairways a few years ago have whittled away at the association's reserve fund, leaving little to address long-term maintenance issues -- such as whether to continue painting or eventually replace the beleaguered siding.
"It's gotten dumpy over here the last couple of years," declares Harte, who purchased his unit last fall. "There's trash lying around. It's poorly landscaped. It's got so much potential, but we've got a management company that doesn't give a shit what anybody thinks."
Dana Pepper, the complex's on-site manager, says there's been no increase in complaints over the past two years. Based in Lakewood, Tyler Management handles 35 properties in the metro area, and Pepper says the small percentage of homeowners who are "extremely unhappy" with their management company is probably no greater at Cedar Pointe than it is at other association-governed communities.
"The association has done landscaping improvement projects each year," Pepper says. She recites a litany of projects, including a multi-year replacement of roofing, now in its final phase, and repairs on chimney siding.
Still, virulent dissatisfaction with Pepper and Tyler Management isn't confined to Tea Party homeowners. Glendale mayor Joe Rice and his wife, Kendall, longtime foes of the Tea Party, didn't hesitate to give Harte and Line their proxy vote when they learned that the pair were vowing to boot Tyler. The Rices own a condo at Cedar Pointe but no longer live there; Joe Rice, an army reservist who was mobilized for the Iraqi war, is currently stationed at Fort Bragg, and Kendall and the couple's twins live in another Glendale multi-housing complex.
Pepper was "incredibly rude and unprofessional" in dealing with her husband over a leaky pipe years ago, Kendall says, adding that she's concerned about the condition of the complex as a whole. "It's gone downhill from ten years ago," she says. "It kind of looks like a trailer park anymore."
She thinks Harte and Line have some "questionable people" supporting them, including Tea Party activists who don't live in Glendale, and "I don't think they need to be involved," Kendall Rice says. "But I know Chuck Line, and I don't see him as one of them. My disgust with the Tea Party was surpassed by my disgust with the management."
The current board has become "enamored" of Dana Pepper, Kendall claims. That's a common theme among Tyler's critics, who contend that boardmembers elected with a clear mandate to make changes are charmed or awed by Pepper's expertise and end up changing nothing. "It's as if the Borg snatched them," says city councilman Mike Dunafon, one of the Tea Party founders, who shares a unit in Cedar Pointe with his common-law wife, Deborah Matthews, the owner of Shotgun Willie's.
Kratze -- who voiced concerns about Tyler Management when she ran for the board -- now defends the company, and Dana Pepper in particular. "Dana is ethical beyond anything I've ever seen," she says. "She is incredibly loyal to this community -- and we're pretty high-maintenance. I'm surprised Tyler hasn't quit us, given the badmouthing they've received."
In fact, Tyler has canceled its contract with Cedar Pointe twice in the past decade because of what Pepper calls "political issues in the community" and uncivil behavior by a few residents, including threats to Tyler staff. Both times, the homeowners' board persuaded the management company to reconsider.
Kratze and fellow boardmember Christine Weatherly deny that they've been co-opted by Pepper in any way; instead, they say, they've "gotten educated" about the complex nature of the association's finances. Some contracts that seem excessive to critics, such as the hefty fees paid to the maintenance firm, have actually saved homeowners thousands of dollars in needed plumbing and paving work over bids received from outside contractors, Kratze says. Litter problems that are blamed on bad management, she adds, may have more to do with irresponsible homeowners who leave their trash out or fail to pick up after their pets. (The association spends $3,600 a year on a weekly pooper-scooper service and related tasks, a figure that doesn't include the hours the full-time maintenance man devotes to the problem.)
Weatherly attributes homeowners' hostility toward Tyler to the fact that few bother to study the association's expenses in detail. "If I didn't know what was going on, it would probably turn me against them, too," she says.
As for their "mandate" to change management companies, both Weatherly and Kratze insist they promised simply to review contracts and seek competitive bids; their campaign literature talks about getting a handle on expenses, not firing Tyler outright. "I never made any promises to get rid of the management company, because I didn't agree that they were ineffective," Kratze says.
Dunafon disputes this. "She is lying through her teeth," he says. "They assured everybody they were going to get a new management company. I asked them, point blank, in my home, if they would do that, and they told me that's why they were running."
Recently, the board did solicit bids from other management companies to see if Cedar Pointe could do better than the $45,000 a year paid to Tyler; the board decided to renew with Tyler because it appears to offer the best value and services for the money, says boardmember Brown. The board also conducted a survey of homeowners that suggests the unhappiness with Cedar Pointe's management isn't nearly as widespread as Harte and Line claim. But the board has been slow to release those survey results, and the Tea Party faction is impatient for change.
Just how impatient Kratze discovered shortly after her election to the board last year. At the association's annual meeting, attorney Brian Pinkowski came up to her and introduced himself. "He said he was there to represent me," she says. "I hadn't asked him to do that. I didn't even know him."
Pinkowski, who lives in Highlands Ranch but has been involved in numerous ventures with Dunafon and other Tea Party leaders, says he can't recall who asked him to attend the May 2002 meeting. He was there to offer his services to the new boardmembers "to see that they were treated fairly," he says. "I told them I was available to help them, and they agreed."
At the new board's first monthly meeting a few days later, Pinkowski was back -- and Kratze began to suspect that Heidi Verhey, one of her fellow HALT boardmembers, knew more about the group's connections to the Tea Party than she'd disclosed to her colleagues.
"There was a full house," Kratze recalls. "Heidi made a motion to appoint Brian Pinkowski as our new attorney. I felt uneasy about that, but Christine seconded it."
The motion carried, prompting Judy DeWit, then president of the board, to take the meeting into executive session. Kratze says DeWit, who's been on the board several years, scolded the new boardmembers for violating their own campaign pledge to seek competitive bids before awarding contracts. When the public meeting reconvened, the board voted to rescind Pinkowski's appointment and seek bids for the job.
The board's longtime attorney, David Braden, submitted a bid and retained the position. Pinkowski declined to bid; instead, he sent a scathing letter to Kratze, Weatherly and Verhey, upbraiding them for letting themselves be "bullied" by Pepper and DeWit into changing their minds. "In all of the boards I have had involvement with, Ms. Pepper would have [sic] terminated on the spot for her blatant efforts to control the board," he wrote.
Pinkowski says he can't comment on the letter because it's a matter of attorney-client privilege. But that he would be interested in the position of board attorney baffled many observers. The job consists chiefly of occasional collections work, a far cry from the sort of fees that Pinkowski, a former EPA Superfund manager, has reaped as a consultant studying Glendale's pollution problems or as a city attorney in Central City during the Tea Party's ascendancy in that town.
"It's not like we're making a million dollars representing Cedar Pointe," says Braden, whose firm supplies legal representation for several homeowners' associations. "Most of the time they don't have a lot of call for us, other than collecting delinquent assessments."
Recently, though, the board has found more reasons than usual to turn to its legal counsel. The effort to jettison Braden's firm turned out to be only a prelude to an even more heated situation, one that would have boardmembers calling on Braden for help, while dissident homeowners brought in their own legal advisor: Brian Pinkowski.
Although he claims to currently represent 21 Cedar Pointe homeowners, Pinkowski declines to identify any other than Chuck Line and Larry Harte, again citing attorney-client privilege.
"It's not a big secret, but I haven't talked to them about it," he says. "It isn't time to name them."
Two months ago, Line and Harte sent a letter to homeowners announcing that they were running for the board. The letter contained the usual denunciations of Tyler Management, but it also stated that the current board is "preparing for a special assessment to cover the cost of a new siding project in a way that is viewed as secretive and not above board."
The assessment, the letter added, would be in the million-dollar range, which meant every homeowner would be socked with $5,000 to $8,000 in fees, depending on the size of the condo. Conclusion: The board must be stopped from embarking on such insanity -- by electing Line and Harte.
When she learned of the letter, Kratze was livid. No special assessment had been "prepared" by the board or even discussed, she says. And even if the board had been prodigal enough to consider such a thing, it could never be imposed without first being approved by two-thirds of the homeowners. (The last time the board did seek a special assessment, for stair and landing repairs, the effort took three years and three votes of the entire association membership before it passed.) The letter's claim was a complete fiction, she says, a scare tactic to stampede the vote.
"I contacted Larry and Chuck," Kratze says. "I told them there was no special assessment. Chuck told me he didn't believe me."
Boardmember Brown knew Chuck Line as his upstairs neighbor -- a "super-nice guy," but not someone who regularly attended board meetings or tracked the board's agenda. "There's no reason he couldn't come down one flight of stairs and ask me what was going on," Brown says now. "I would have been more than happy to give him an update. It makes you wonder why they want to be on our board so bad, that they're sending out lies."
Line, Harte and their supporters have offered various defenses of the letter, which apparently was a group effort. They point out that the board hired a consultant to study the siding problems and offer options. They argue, with a flair for solipsism, that studying the issue amounts to taking the first step toward an assessment.
"They don't start out calling a duck a duck," says Dunafon. "I looked at a white board at a meeting, and I saw a million-two on the siding question. And they had it all listed out, how they were going to do this."
Line acknowledges that the letter "used incorrect terminology," but he says he's still convinced that the board plans to seek a monstrous assessment -- if not by a vote of the homeowners, then by obtaining a secret loan that will come due later. (Braden says such a maneuver would be legally dicey and practically impossible, since no bank would loan money to the association if its membership hasn't already okayed the debt.)
Harte insists the letter is accurate, relying on a creative interpretation of the word "preparing." He explains, "I've never gone out and said yes, there's going to be an assessment. I've said they are considering it."
According to Janet Anderson, the Harte-Line campaigner who actually typed the letter, the version homeowners received was supposed to have been nothing more than a rough draft. "I was shocked when I got it in the mail, as is," she says. "Let's say, for the sake of argument, there was misinformation in that. But I know they were looking into options, and they had the opportunity to print a rebuttal."
The board issued its own letter, denying the assessment scheme. But members feared the effort was too little, too late. Harte, Line and their supporters were busily collecting proxy votes from homeowners. In more than a third of the cases, they'd asked homeowners to post-date the forms for February 25 -- one day before the election was supposed to take place.
"There's nothing illegal about that," Harte says. "It gives the enemy one day to get them to change their mind."
Braden concedes that the practice is legal, but he believes it raises ethical questions. "If you listen to someone who says you need to postdate your proxy for the day before the election, then you've given up your right to change your mind if you find out the facts are not the way they were represented," he says.
Technically, a voter can rescind a proxy by showing up to cast a vote in person, but boardmembers feared that wouldn't happen; at most board meetings, the number of homeowners in attendance could be counted on one hand, with plenty of fingers to spare. Yet at least one of the people Line and Harte approached felt sufficiently incensed by their tactics to rescind his vote in writing.
Rob Malky, a former boardmember, says he gave Line his proxy before he found out about "this totally fabricated campaign story that the board was planning to put through a special assessment." When Harte and Line visited him again to ask him to fill out another proxy -- Malky had filled out the first form incorrectly -- he refused.
"I told them, 'Look, I don't appreciate the misinformation that's being distributed in order for the two of you to get elected,'" Malky says. "They had the audacity to tell homeowners what a rewarding experience it was to go door-to-door to get their input. That's all a big lie. All they were doing was disseminating false information. And if somebody gives a proxy vote based on bad information, there's not a lot you can do about that."
With only days left before the annual meeting, Kratze called the other boardmembers to ask if they should put off the election until a later date. Braden had recommended the move, writing that "it is not in the interest of the association to conduct an election tainted by allegations of fraud."
Four members of the board agreed with their attorney. The dissenting view came from Heidi Verhey, the same member who'd tried to replace Braden with the Tea Party's Pinkowski. "If the voters choose to listen to only one side of the story...that is their right," Verhey wrote to the board in an e-mail. "They also have the right to vote based on information they do have, even if the information is incorrect or skewed.... Politicians have always told lies and will continue to tell lies; they can claim the lies are their beliefs so therefore their statements aren't fraudulent." (Verhey, who worked on Harte's city council campaign, did not respond to requests for comment for this article.)
Of course, the Line-Harte camp didn't think the board had any right to cancel the election, either. They made tortured analogies to the Gore-Bush hanging-chad scandals in Florida and bemoaned the board's tampering with the democratic process. On the night of the canceled election, several of them -- including Line and Harte, attorneys Pinkowski and Bonniwell, Janet Anderson and Anna Fine, the Glendale city clerk -- assembled at the designated location, the Virginia Village public library, and held their own meeting.
Harte and Line brought their proxies. They would later say they'd amassed 127 of them - representing almost half of the association's membership -- including 47 that were post-dated. Someone took notes.
"I don't know what was discussed," says Kratze. "But after it was over, Chuck Bonniwell came out and told the security guard that Larry Harte and Chuck Line had just been elected to the board of directors."
The "election" of Harte and Line, at a meeting attended only by their supporters, went unheeded by the association's official leadership. But it was front-page news in the Glendale News, a newspaper that is as closely aligned to the worldview of the Tea Party as Pravda was to the policies of the Soviet Politburo.
In an un-bylined article that appeared in the paper's February 28 edition, the election of Harte and Line was presented as legitimate. The story asserted as fact that "the management company had been about to impose a $8,000 special assessment on homeowners." (In reality, the management company doesn't impose assessments; the board does, after approval by the association membership.) "Newly elected director" Larry Harte was quoted as vowing to "execute a full fraud audit" on the expenditures of the current board "and work with law enforcement to make sure that our owners get any improperly spent money returned."
The article offered no comments from anyone not directly involved with the Harte-Line campaign, no pretense of objectivity or fairness. The paper's publisher, Guerin Green, declines to identify who wrote the story. The assertion about the assessment was "double-sourced," Green says, and was confirmed by "somebody who was on the board."
"Whoever did the story -- and I believe we talked to Larry when checking the story -- they told us that in fact that assessment was in place," Green says. "I stand by our story."
According to Green, the paper, which is mailed to Glendale residents and distributed at businesses in the surrounding area, has a circulation of 6,000. The February 28 issue featured prominent ads for Mr. Limos, a limousine company partly owned by Tea Party leader Mike Dunafon (see sidebar, page 29), and for Kudu Rugby, a "rugby development company" founded by Dunafon that lists Pinkowski as its president.
Six days after the canceled election, the Cedar Pointe board held its monthly meeting for March. Boardmember Verhey arrived late, Kratze says, with the Tea Party regulars in tow.
"One step behind her, I kid you not, is Chuck Bonniwell, followed by Brian Pinkowski, Chuck Line and Larry Harte," Kratze says. "I asked Heidi to pick up her board packet, and she looked at me and said, 'Let's wait and see what happens.'"
What happened was an angry exchange between the two camps, with various homeowners joining in. The board declined to seat Harte and Line.
"HOMEOWNERS DENIED A VOICE AT CEDAR POINTE CONDOS," shrieked the headline in the March 15 Glendale News. "The struggle for democracy of the most local sort continues at the Cedar Pointe condominiums," the un-bylined article began, "where a management company and a rogue board of directors have sought to overturn the will of the homeowners..."
According to Braden, association bylaws require that the annual election be held before the end of April. Harte and Line say that they'll participate in that rescheduled election and that they expect to win.
The fragile state of "democracy of the most local sort" in Glendale troubles Judy DeWit, one of the incumbents running against Line and Harte. She points out that the challengers attended few board meetings before declaring their candidacy and not many since; they departed the March meeting after having their say but before the board could address the regularly scheduled association business.
Board meetings are usually held on Tuesday nights, Line responds, the same night as Glendale City Council meetings. But DeWit wonders how many of the homeowners who gave the challengers their proxies are truly informed about the state of affairs at Cedar Pointe.
"It's a trend in homeowners' associations: People get up and question the management," she says. "But unless they attend the meetings, they're very vulnerable to misinformation. The truth is, things are going very well here."
At the April board meeting, concerns over the election dispute brought out more than a dozen homeowners -- but no Tea Party members. Also absent was Verhey, who was then voted off the board for repeatedly missing meetings. The removal of their lone board supporter means that even if Line and Harte win seats, they won't have the slam-dunk majority they sought to implement their "mandate" for change.
Kratze is preparing for the election by churning out newsletters and special letters urging homeowners to "get informed." Her effort has been criticized by Line and Harte, who say the board is using association funds for campaign purposes; it was also hampered by the March blizzard. Cedar Pointe's plow equipment broke down, leaving the complex buried for days and prompting more grousing about Tyler Management and how the board is "out of touch" with residents.
As the storm ebbed, Kratze found herself struggling alongside half a dozen neighbors, trying to save a tree overloaded with the wet, heavy snow. While the group worked to free its branches, candidate Line walked by, toting paperwork.
"He saw us," Kratze says. "I just wish he'd stopped to help."
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