River’s Edge has allegedly dealt with water leaks, sparking a lawsuit between its current owner and original developer. (BizSense file photo)
A lawsuit sparked by water leaks at a Manchester apartment tower is moving forward, according to a recent court order.
Last month a Richmond Circuit Court judge issued a ruling that largely denied a request to dismiss the dispute between the current owners of the River’s Edge apartments at 505 Porter St. and the group that developed and built the 10-story, 212-unit building.
The lawsuit was filed by Four Mile Capital, a Denver-based real estate investment firm that bought River’s Edge in 2021 for $47.5 million.
Four Mile is suing a group that includes local firms CMB Development and Purcell Construction Corp., claiming that it was misled about the building’s condition and the extent of water leaks that were known at the time of the purchase.
River’s Edge has routinely experienced leaks due to alleged shoddy construction, and Four Mile claims that the building was not built in accordance with its purported design. It claims the entire façade needs to be re-clad in order to fix the issue, and that tenants at the building would have to be relocated while that happened.
Four Mile filed the lawsuit last year, alleging fraud, business conspiracy, breach of contract and negligence. It’s seeking over $40 million in damages.
The defendants have denied any wrongdoing, and were seeking to have the lawsuit thrown out via demurrer, a legal pleading that effectively asks the court to throw a case out due to legal insufficiency.
However, Judge Jacqueline McClenney largely denied that request in a Sept. 21 opinion and order, only sustaining demurrers on certain counts against Purcell, who she agreed was not party to the sale between the developers and Four Mile and therefore is not contractually obligated to Four Mile. On Oct. 13, Four Mile amended its complaint to remove Purcell from the allegation of breach of contract.
Four Mile’s attorney, Dylan Graham with Wise Law Firm, said they view the judge’s ruling as a win.
“This is the first hurdle that had to be jumped and we cleared it pretty well. At this point we’re ready to come out swinging to try and get this resolved,” Graham said.
In an interview with BizSense, Four Mile CEO Chris Geer said the leaks have been persistent, and that there’s been no way for Four Mile to predict when new leaks will start or which units will be impacted.
“It can change depending on the direction of the wind, it can change depending on the strength or the amount of rain. We’re constantly chasing leaks to try to make sure that our residents have a safe, dry place to live,” Geer said. “This is a systemic building defect. We need to fix that defect in order to make sure no more leaks happen at any point in the future.”
Geer said the leaks have at times hurt Four Mile’s ability to lease the building, which currently has a roughly 92% occupancy. The company handles property management itself. All of the units at River’s Edge are market-rate, and per its website start at about $1,400 per month for a one-bedroom and $2,000 per month for a two-bedroom.
Attorney Samuel Kaufman of Owen & Owens is representing Purcell and Stephen Faraci of the Whiteford law firm is representing the developers. Both Purcell and the development team, through their attorneys, declined to comment.
No further filings have been made and no new hearings have been set in the case as of Friday afternoon.
Four Mile is seeking a jury trial and Graham said they’re pushing for a trial date to get the case moving as quickly as possible.
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