Developer Erik Osborn and his wife, real-estate broker Angela Osborn, wowed investors a few years back with their vision of converting roughly six acres of parking lots flanking downtown's financial district into a vertical neighborhood of luxury condos and upscale retail shops. But it wasn't long before their arrangements with various partners began to unravel into a tangle of theft allegations, lawsuits and criminal cases.
In late 2007, the Denver District Attorney filed felony charges against Erik Osborn, alleging that he'd diverted nearly $150,000 in funds during the construction of the One Lincoln Park residential tower at 2001 Lincoln Street ("A Developing Scandal," March 19). Last month, a Denver grand jury concluded that sufficient evidence existed to also indict Osborn on similar charges involving a project he'd headed just a hundred yards away. That case centers on 1800 Glenarm Place, a triangular office tower built in 1980. Prosecutors charge that during a 2006-'07 effort to redevelop that drab office building into high-end apartments, Osborn siphoned more than $250,000 from capital-fund manager Michelle Brokaw and investor Robert Greenlee.
Osborn turned himself in late last month.
Related: Read about the sweet deal that financed Erik and Angela Osborn's Polo Club.
Greenlee first met Osborn at the groundbreaking ceremony for One Lincoln Park in March 2006. With Osborn as developer and wife Angela acting as head leasing agent, the $140 million, 32-story One Lincoln Park project was pitched as the cornerstone of a new, high-flying residential district. Greenlee, the former mayor of Boulder who held a large stake in 1800 Glenarm, introduced Brokaw to Osborn, and soon the three were in discussions about redeveloping 1800 Glenarm into an ancillary residential tower to One Lincoln Park, to be called Mondrian City Homes at Lincoln Park. They incorporated as a partnership, with Greenlee and Brokaw providing the initial capital and Osborn overseeing the demolition and construction. Angela was chosen to run the marketing and property sales.
This arrangement was similar to that of other Osborn ventures around town. For Belcara Development, a construction project focusing on pricy residences in south Denver, much of the seed capital was provided by developer Jeffrey Raymond. For a multi-unit condo complex near Coors Field called the Diamond Lofts, money and land was supplied by owners of the Breckenridge Brewery and other investors. The funds for One Lincoln Park had been put up by numerous parties, including auto-sales king "Dealin' Doug" Moreland. In all of these deals, Osborn's role was to use his expertise to manage the overall project from design through construction to completion — even though, prior to 2004, he had little experience as a master developer.
The son of a telecom executive, Erik Osborn grew up in metro Denver, then went to college in Utah. In 1987, he was playing shortstop for Brigham Young University's baseball team when he and another student were arrested by Provo police for stealing automobile parts and selling them from their apartment. Osborn was convicted of third-degree felony theft and burglary of a vehicle and given probation. Through the '90s, he operated a series of small painting-subcontracting companies. By 2002, he'd formed Osborn Construction Enterprises, which worked on subdivisions on the outskirts of the metro area.
But in 2004, Osborn finally moved to the big time with One Lincoln Park, which he soon followed with 1800 Glenarm and other massive projects. The collapse came almost as quickly. After the One Lincoln Park charges came down, Brokaw and Greenlee voted to remove Osborn from their partnership in December 2007. According to a lawsuit they filed against the Osborns, Erik Osborn had rigged the bidding system to funnel work to his other companies as part of a "scheme to overcharge the 1800 Glenarm project and then disburse the improperly paid funds to Osborn and other individuals complicit in the scheme"; the suit also alleges that Angela double-billed the company for marketing work in excess of $60,000 "and refused to provide documentation to prove her time and expenses." The Osborns filed a countersuit against Brokaw and Greenlee, but that claim was dismissed by a judge earlier this year.
The recent grand-jury indictment charges that Erik used $258,000 in 1800 Glenarm project funds for "other personal and business purposes unrelated" to the development. 1800 Glenarm has since been purchased by the St. Charles Town Co. and converted into office condos.
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His attorney, Robert McAllister, calls the criminal charges connected to both the One Lincoln Park and 1800 Glenarm projects "frivolous" and says he's already filed a motion to have the second indictment thrown out so that the cases can be coupled together. "When Erik basically refused to plea-bargain or settle the case," he explains, "I think the latest case was brought in bad faith."
As it happens, Osborn's arraignment on these latest charges is set for December 7, the same day his long-delayed trial in the One Lincoln Park case is scheduled to start. McAllister says he plans to show evidence "that monies were distributed to various sub-contractors on four or five projects and they were all fully disclosed. There is no theft here." In fact, he insists that it was Osborn's partners who took advantage of his client. For her part, last month Angela filed a lawsuit against Moreland and fellow investor Tom Manoogian, alleging that they have not paid her tens of thousands of dollars in brokerage commission.
Osborn "is the one who's the victim in this case," McAllister says. "Doug Moreland, who is very rich and powerful and on TV every night, is obviously somebody who has a lot more money than Erik Osborn. And [Moreland] is the one who forced Erik Osborn out of One Lincoln Park. Erik hasn't stolen any money, hasn't tried to steal any money."
He can tell that to the judge.