Two members of a prominent Eugene family have been sued by a group of condo owners upset over attempts to raise almost $18 million to pay for repairs at the Inn of the Seventh Mountain in Bend.
The Pape family owns about 35 percent of the inn's commercial and residential units and controls the board. The dissident owners sued Jordan and Mary Pape, who sit on the Seventh Mountain board, accusing them of putting their family's financial interests ahead of their fellow condo owners. They also claim the Papes' timed a special assessment so that their share of the repair bill will be greatly reduced. The suit names four other board members.
The owners have scheduled a special election on Dec. 31 in an attempt to oust the Papes and their loyalists from the board.
The Pape family, which came to prominence on the success of its empire of heavy equipment and trucking dealerships, first bought into the Inn of the Seventh Mountain in 2003.
A family company signed a lease with the association board to take over the inn's restaurant, market and other commercial operations. As part of the deal, the Papes spent roughly $6 million improving the facility, company officials say.
The Papes own about 85 commercial and residential condo units at the resort, and the family gained control of the nine-member board in October.
The newly constituted board's first order of business was the repairs.
Both sides agree that exterior siding on all the residential units is badly deteriorated and leaking in spots, as are some of the roofs.
RDH Building Sciences, a Vancouver, B.C., engineering and construction management operation, determined that the buildings needed nearly $30 million in repairs. The board members asked RDH to scale back the scope of repairs to reduce the cost. That lowered the estimate to $17.7 million.
The board then notified condo owners that it would go ahead with a Nov. 25 special owners' meeting to consider a $17.7 million special assessment.
A minority of board members disagreed with the timing. In their opinion, it made no sense to proceed with a huge special assessment when the board had not gotten any bids from contractors.
The unhappy owners figured the Papes' urgency stemmed from the terms of their 2003 lease. If the Papes get the special assessment levied by the end of 2007, they get a $6 million credit for the work they paid for in 2003. If the assessment is levied after that, the Papes' credit drops to $1 million.
Danny Hollingshead, vice president of Pape Properties, said the family is expecting only the credit it is due after paying for the earlier round of renovation.
Inn of the Seventh Mountain condominium owners in legal dispute