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SAWHORSE
By Harold Bubil
Real Estate Editor
http://www.heraldtribune.com/article/20110820/ARTICLE/308209994/-1/news?Title=Sarasota-mansion-21-000-square-feet-of-trouble
August 20, 2011
On a stretch of Sarasota Bay shoreline well known for its mansions, this one stands out.
Second in size only to Cà d'Zan -- the famed John and Mable Ringling mansion -- is a 21,192-square-foot home that is likely the largest built in Sarasota since the Ringling brothers' spending spree in the mid-1920s.
This estate, at 4449 Bay Shore Road, also is at the center of the most expensive sale you've never heard of.
In a deal between two wealthy businessmen that has since devolved into litigation, the Bay Shore home sold for $18.84 million, a regional record for a single home and lot. The transaction also included a remodeled home across the street, boosting the total to $19.2 million.
When homes like this one move, real estate agents typically are quick to trumpet the news. But when hard-money lender Howard Jacobs "sold" the unfinished mansion on Bay Shore in October 2008, it did not make the news -- not a peep -- even though the deal was orchestrated by publicity-hungry (though now-defunct) luxury broker Sky Sotheby's International Realty.
Instead, the house was quietly transferred to an entity called 4449 Holdings LLC. The unusual transfer was set up at the direction of the person listed on the sales contract as the buyer -- James A. Armour, then chief executive and now chairman of AM General, the South Bend, Ind.-based defense contractor that makes the "Humvee" military vehicle and the Hummer SUV.
The stated purpose of the title transfer through a limited liability corporation was to maintain the buyer's privacy. A side benefit was that "doc stamps" were not paid. At 70 cents per $100 of value, the levy would have been about $133,000. But lawyers explained at the top of the warranty deed that no tax was due because "this deed does not effect a change in the beneficial ownership of the property."
If that had been the end of the story, the transaction may well have remained out of public view, except for chatter among high-end real estate agents.
But it is hard to keep a house styled after Monaco's Monte Carlo Casino a secret.
That is especially true when the new owner spends upwards of $14 million -- perhaps more -- on interior remodeling and to repair alleged construction defects, or when the vehicles of dozens of tradesmen have been parked on a nearby street day after day for years after the sale. The mansion's neighbors have only just now taken down the "No Parking" signs from their yards.
After coming to Southwest Florida from Santa Monica, Calif. -- where he built and managed high-profile multifamily and commercial projects -- Jacobs began in 2004 to plan the mansion for himself, replacing a 3,000-square-foot, 1956 house that was hidden behind landscaping.
Though the unfinished Bay Shore house was not for sale, when agents from Sky Sotheby's brought Armour as a potential buyer in September 2008, Jacobs agreed to sell.
The Bay Shore mansion has 21,192 square feet of air-conditioned area, with 11 bedrooms, 12 baths and three half-baths, property appraiser records show.
The 22 rooms include a media room, a grand salon, a dining room, a fitness center, a "kids' rec room," a study, staff quarters, guest quarters, a master bedroom/sitting room the size of a cottage, a master closet that could pass for an apartment in Manhattan, and a "file room."
The total building area tops 39,000 square feet.
In Sarasota, the only thing bigger is Cà d'Zan, which features 36,000 square feet of interior space in its 50-plus rooms, and 49,000 square feet including terraces, according to Ron McCarty, keeper of the Ringling home.
From his home, Armour -- a man whom Arnold Schwarzenegger helped convince to sell a civilian version of the Humvee -- will have an amazing view of the setting sun over Longboat Key, Sarasota Bay and Ken Thompson Park. It is the same view that John Ringling once enjoyed.
"Big Jim," as the native Tennessean is known to some, became president of AM General in 1988 after stints as a manager in the automotive industry with American Motors Corp., Renault Alliance and Ford Motor Co.
Known as a good listener, the former auto industry clerk and Peace Corps project leader in Colombia stepped back earlier this year from his CEO position at AM General but remained chairman. The previous year he had been awarded the Sagamore at Wabash award, considered by some the highest distinction in the state of Indiana.
At his acceptance speech, Armour told the crowd, "In life you have two choices. You are either part of the solution or part of the problem. There is no in-between."
At this moment, Armour finds himself in between the man who sold him 4449 Bay Shore and a host of contractors who repaired what the AM General chairman insists were defects in the house that, according to his suit, were not disclosed to him.
Attorneys representing the major parties in the litigation surrounding the mansion are not talking, nor is Armour, Jacobs or just about anyone else involved.
Armour's attorney, Edmond Koester of Coleman, Yovanovich & Koester in Naples, said his client was a "private person" and turned down an interview request.
But what is clear is that the voluminous "contract and indebtedness" case is exceptionally complex.
When Armour and his wife, Maryann, took possession -- if not title -- to the house, they knew there was a long list of items waiting to be finished. But they thought the house was up to code and sound, basing that belief on a written report from structural engineer David Karins.
Karins' Sept. 29, 2008, letter to Armour -- a few days before the closing -- says the building "meets or exceeds code." He said several features "significantly exceed local code," including reinforced concrete-block walls, a reinforced roof and other features designed to repel water; insulation in the floors to minimize noise; and a commercial-grade elevator. Collectively, those items contributed to a 147 mph wind-load rating, one mile per hour above the standard in hurricane-prone Miami-Dade and 17 mph higher than Sarasota County's mandate.
But 15 months later, Armour filed an 800-page lawsuit against Karins and more than a dozen subcontractors, including some major figures in the local construction industry.
The suit alleges that Karins failed to inform Armour of defects, and that the subcontractors conspired to cover them up.
An addendum to the $19.2 million sales contract contains an "as-is" clause: seller Jacobs says that because the house is one-of-a-kind, it is imperfect and that it "could not be made perfect."
The people who built the house had no experience with such a unique project, the seller's disclosure says.
The document also notes that buyer Armour "is a sophisticated and experienced purchaser of real property."
Armour's legal team says in court filings that he was sophisticated enough to walk away from the purchase if he had known about the problems, and his suit contains hundreds of photographs of the alleged water damage, depicting what appears to be mold, rotted structural components and wet insulation.
Excluded from that first suit was Jacobs and the company that built the house for him, Sarasota's Voigt Building & Design.
But in a separate action, Armour later filed a claim against both Jacobs and Voigt that will go to arbitration in October.
Jacobs himself filed a suit against Florida State Roofing, which built 4449 Bay Shore's complex roof system, and Perrone Construction, which, the suit says, demolished and rebuilt portions of the house after the sale closed.
That suit claims that Jacobs and Voigt are without fault and that Perrone would not let Voigt on the property after the closing to finish the house, as required by the Voigt contract with Armour.
The extensive changes made to the property by the new owner also have complicated the cases.
"From our client's perspective and the overall defense perspective, whether or not such defects existed, the massive changes he was going to make rendered many of the alleged defects irrelevant," said Sarasota attorney David Preston, one lawyer who would speak on the record, and who represents defendant Windemuller Technical Services against Armour's lawsuit. "That is a general premise of the defense."
Armour, as have so many other wealthy and successful people, moved to Sarasota's waterfront to enjoy the fruits of a lifetime's work.
In 2004, he and his wife chose a fine, three-year-old home on Westway Drive, the most expensive street in the region for home sales.
The house they bought from Adrienne and Gianluigi Vittadini is a 6,600-square-foot, neoclassical structure with five bedrooms, six baths and a magnificent disappearing-edge pool, all overlooking New Pass, the Gulf of Mexico and southern Longboat Key.
The Armours had listed it at $8.9 million through Michael Saunders & Co., but recently withdrew it. The home is still for sale, though, according to a caretaker.
The county appraiser values their Bay Shore home, which sold for $18,844,200, at $3,031,900 as of Jan. 1, but because it was still in the midst of reconstruction, that number is very likely to change next year.
A moving van was recently parked in front of 4449 Bay Shore Road.
Copyright © 2011 HeraldTribune.com
Real Estate Editor
http://www.heraldtribune.com/article/20110820/ARTICLE/308209994/-1/news?Title=Sarasota-mansion-21-000-square-feet-of-trouble
August 20, 2011
On a stretch of Sarasota Bay shoreline well known for its mansions, this one stands out.
Second in size only to Cà d'Zan -- the famed John and Mable Ringling mansion -- is a 21,192-square-foot home that is likely the largest built in Sarasota since the Ringling brothers' spending spree in the mid-1920s.
This estate, at 4449 Bay Shore Road, also is at the center of the most expensive sale you've never heard of.
In a deal between two wealthy businessmen that has since devolved into litigation, the Bay Shore home sold for $18.84 million, a regional record for a single home and lot. The transaction also included a remodeled home across the street, boosting the total to $19.2 million.
When homes like this one move, real estate agents typically are quick to trumpet the news. But when hard-money lender Howard Jacobs "sold" the unfinished mansion on Bay Shore in October 2008, it did not make the news -- not a peep -- even though the deal was orchestrated by publicity-hungry (though now-defunct) luxury broker Sky Sotheby's International Realty.
Instead, the house was quietly transferred to an entity called 4449 Holdings LLC. The unusual transfer was set up at the direction of the person listed on the sales contract as the buyer -- James A. Armour, then chief executive and now chairman of AM General, the South Bend, Ind.-based defense contractor that makes the "Humvee" military vehicle and the Hummer SUV.
The stated purpose of the title transfer through a limited liability corporation was to maintain the buyer's privacy. A side benefit was that "doc stamps" were not paid. At 70 cents per $100 of value, the levy would have been about $133,000. But lawyers explained at the top of the warranty deed that no tax was due because "this deed does not effect a change in the beneficial ownership of the property."
If that had been the end of the story, the transaction may well have remained out of public view, except for chatter among high-end real estate agents.
But it is hard to keep a house styled after Monaco's Monte Carlo Casino a secret.
That is especially true when the new owner spends upwards of $14 million -- perhaps more -- on interior remodeling and to repair alleged construction defects, or when the vehicles of dozens of tradesmen have been parked on a nearby street day after day for years after the sale. The mansion's neighbors have only just now taken down the "No Parking" signs from their yards.
After coming to Southwest Florida from Santa Monica, Calif. -- where he built and managed high-profile multifamily and commercial projects -- Jacobs began in 2004 to plan the mansion for himself, replacing a 3,000-square-foot, 1956 house that was hidden behind landscaping.
Though the unfinished Bay Shore house was not for sale, when agents from Sky Sotheby's brought Armour as a potential buyer in September 2008, Jacobs agreed to sell.
The Bay Shore mansion has 21,192 square feet of air-conditioned area, with 11 bedrooms, 12 baths and three half-baths, property appraiser records show.
The 22 rooms include a media room, a grand salon, a dining room, a fitness center, a "kids' rec room," a study, staff quarters, guest quarters, a master bedroom/sitting room the size of a cottage, a master closet that could pass for an apartment in Manhattan, and a "file room."
The total building area tops 39,000 square feet.
In Sarasota, the only thing bigger is Cà d'Zan, which features 36,000 square feet of interior space in its 50-plus rooms, and 49,000 square feet including terraces, according to Ron McCarty, keeper of the Ringling home.
From his home, Armour -- a man whom Arnold Schwarzenegger helped convince to sell a civilian version of the Humvee -- will have an amazing view of the setting sun over Longboat Key, Sarasota Bay and Ken Thompson Park. It is the same view that John Ringling once enjoyed.
"Big Jim," as the native Tennessean is known to some, became president of AM General in 1988 after stints as a manager in the automotive industry with American Motors Corp., Renault Alliance and Ford Motor Co.
Known as a good listener, the former auto industry clerk and Peace Corps project leader in Colombia stepped back earlier this year from his CEO position at AM General but remained chairman. The previous year he had been awarded the Sagamore at Wabash award, considered by some the highest distinction in the state of Indiana.
At his acceptance speech, Armour told the crowd, "In life you have two choices. You are either part of the solution or part of the problem. There is no in-between."
At this moment, Armour finds himself in between the man who sold him 4449 Bay Shore and a host of contractors who repaired what the AM General chairman insists were defects in the house that, according to his suit, were not disclosed to him.
Attorneys representing the major parties in the litigation surrounding the mansion are not talking, nor is Armour, Jacobs or just about anyone else involved.
Armour's attorney, Edmond Koester of Coleman, Yovanovich & Koester in Naples, said his client was a "private person" and turned down an interview request.
But what is clear is that the voluminous "contract and indebtedness" case is exceptionally complex.
When Armour and his wife, Maryann, took possession -- if not title -- to the house, they knew there was a long list of items waiting to be finished. But they thought the house was up to code and sound, basing that belief on a written report from structural engineer David Karins.
Karins' Sept. 29, 2008, letter to Armour -- a few days before the closing -- says the building "meets or exceeds code." He said several features "significantly exceed local code," including reinforced concrete-block walls, a reinforced roof and other features designed to repel water; insulation in the floors to minimize noise; and a commercial-grade elevator. Collectively, those items contributed to a 147 mph wind-load rating, one mile per hour above the standard in hurricane-prone Miami-Dade and 17 mph higher than Sarasota County's mandate.
But 15 months later, Armour filed an 800-page lawsuit against Karins and more than a dozen subcontractors, including some major figures in the local construction industry.
The suit alleges that Karins failed to inform Armour of defects, and that the subcontractors conspired to cover them up.
An addendum to the $19.2 million sales contract contains an "as-is" clause: seller Jacobs says that because the house is one-of-a-kind, it is imperfect and that it "could not be made perfect."
The people who built the house had no experience with such a unique project, the seller's disclosure says.
The document also notes that buyer Armour "is a sophisticated and experienced purchaser of real property."
Armour's legal team says in court filings that he was sophisticated enough to walk away from the purchase if he had known about the problems, and his suit contains hundreds of photographs of the alleged water damage, depicting what appears to be mold, rotted structural components and wet insulation.
Excluded from that first suit was Jacobs and the company that built the house for him, Sarasota's Voigt Building & Design.
But in a separate action, Armour later filed a claim against both Jacobs and Voigt that will go to arbitration in October.
Jacobs himself filed a suit against Florida State Roofing, which built 4449 Bay Shore's complex roof system, and Perrone Construction, which, the suit says, demolished and rebuilt portions of the house after the sale closed.
That suit claims that Jacobs and Voigt are without fault and that Perrone would not let Voigt on the property after the closing to finish the house, as required by the Voigt contract with Armour.
The extensive changes made to the property by the new owner also have complicated the cases.
"From our client's perspective and the overall defense perspective, whether or not such defects existed, the massive changes he was going to make rendered many of the alleged defects irrelevant," said Sarasota attorney David Preston, one lawyer who would speak on the record, and who represents defendant Windemuller Technical Services against Armour's lawsuit. "That is a general premise of the defense."
Armour, as have so many other wealthy and successful people, moved to Sarasota's waterfront to enjoy the fruits of a lifetime's work.
In 2004, he and his wife chose a fine, three-year-old home on Westway Drive, the most expensive street in the region for home sales.
The house they bought from Adrienne and Gianluigi Vittadini is a 6,600-square-foot, neoclassical structure with five bedrooms, six baths and a magnificent disappearing-edge pool, all overlooking New Pass, the Gulf of Mexico and southern Longboat Key.
The Armours had listed it at $8.9 million through Michael Saunders & Co., but recently withdrew it. The home is still for sale, though, according to a caretaker.
The county appraiser values their Bay Shore home, which sold for $18,844,200, at $3,031,900 as of Jan. 1, but because it was still in the midst of reconstruction, that number is very likely to change next year.
A moving van was recently parked in front of 4449 Bay Shore Road.
Copyright © 2011 HeraldTribune.com
