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Aurora, Colorado, pauses closure plans for apartments wrapped up in gang claims after court appoints caretaker

Seth Klamann, The Denver Post on

Published in News & Features

DENVER — Aurora city officials are delaying plans to close dilapidated — and now politically infamous — apartment buildings after control of two of the owners’ properties was transferred to a court-ordered caretaker.

The court took action after the property owners defaulted on millions of dollars in loans. Attorneys for U.S. Bank Trust Company filed two lawsuits in recent weeks to force Aurora’s Whispering Pines and 200 Columbia apartment complexes into receivership. That is a court-appointed process that gives control of the assets to an appointed receiver to help unpaid creditors recover their loans.

Both properties, controlled by troubled property owner CBZ Management through a web of limited liability corporations, were listed as collateral for roughly $10 million across two loans.

U.S. Bank’s attorneys wrote that the properties’ owners have not made payments for three months and have repaid virtually none of the initial loan amounts.

CBZ in recent months claimed that its properties — which for years have been plagued with persistent health code violations and allegations of management neglect — were taken over by a transnational Venezuelan gang called Tren de Aragua. Those allegations spun into a state and then national firestorm, culminating in Republican presidential candidate Donald Trump’s plans to hold a rally in Aurora on Friday at the Gaylord Rockies Resort and Convention Center.

The receivership order has prompted Aurora officials to hold off on imminent plans to close 200 Columbia and its neighboring CBZ property, Edge of Lowry, over increased criminal activity and persistent health code violations. The Edge of Lowry apartments gained national notice in the late summer after a video of armed men in a hallway went viral and sparked the gang claims.

“We are thrilled that the property owners and managers have agreed to let a court-appointed, third-party receiver take control of these private properties to finally address the longstanding issues at each of them,” Aurora spokesman Ryan Luby wrote in an email Tuesday. “Tenants and various activists and advocates have called for more accountability, stability and certainty, and that is precisely what these actions will bring.”

In court, CBZ’s attorneys did not challenge either U.S. Bank suit, and both properties were swiftly moved into receivership. The court-appointed receiver, Kevin Singer of California, will now have full control of the properties — including the ability to terminate leases, collect rent and conduct repairs that tenants and city inspectors say have lagged for years.

U.S. Bank, which previously paid for a private investigation into gang activity at CBZ’s properties, requested Singer’s appointment and wrote that he had “experience in managing properties affected by gang presence and addressing that problem and eliminating it.” Singer was previously appointed receiver of a nonprofit housing project serving homeless people in Los Angeles.

Tenants at Whispering Pines were told that the caretaker would be on site as early as this week to begin assessing the properties.

 

City officials have said the gang claims have been exaggerated while also confirming that CBZ’s properties were “significantly affected” by gangs. In previous interviews, current and former tenants have also described criminal activity. But they’ve also blamed CBZ and its Colorado-based owner, Zev Baumgarten, for persistently failing to fix mold, pest infestations and hot water issues — among a litany of other problems — over a period of years across the company’s Denver and Aurora properties.

Walter Slatkin, the attorney for CBZ and the constituent companies that formally own its properties, did not return a message seeking comment Tuesday.

Nor did the attorneys representing the U.S. Bank Trust Company respond to questions about the fate of the properties or the scores of tenants who live in them.

The Edge of Lowry property was also used as collateral for a loan, according to financial records. UBS Bank, which provided that loan, did not return a message seeking information about the loan’s status, and no lawsuit has been filed pursuing control of the property.

In his email, Luby wrote that city officials hope “the remaining buildings will follow” into receivership.

The city ordered the closure of another CBZ property, the Aspen Grove apartments on Nome Street, in early August because of persistent health code violations. That property is now for sale, Business Den reported.

Nadeen Ibrahim, the organizing director of the East Colfax Community Collective, which has advocated for CBZ’s tenants, said this week that tenants were told the new receiver would soon come to “do an assessment of the repairs, try to bring in security” and address rent collection.

Despite the building’s dilapidated condition, Whispering Pines residents had previously asked the city not to close the property out of fear they would be made homeless.

“We’re just treading with caution,” Ibrahim said. “I will say that knowing that someone from the ownership is coming in to take responsibility is promising. But obviously we’re treading with caution, because we just don’t know what that means.”


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