ST. PETERS — A New Jersey company that bought a new apartment complex here for $70 million alleges it was misled about how many tenants lived there and was not told of a laundry list of construction defects.
Silverstone Management alleges in court documents that the developer “artificially inflated” the occupancy at Bold on Blvd, just north of City Centre Park, to ensure a higher sales price for the 272-unit complex amid climbing interest rates that would diminish the property’s value.
As part of that, the developer rented apartments to people who ordinarily wouldn’t meet leasing standards, like felons, who later physically threatened property management, the company claims in court documents.
Silverstone also alleges that the property had various construction problems, including cracking and collapsing tubs, water leaks that caused wood rot and mold growth, and incorrect installation of some electrical wiring, among other issues.
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“Silverstone now seeks recourse for defendants’ misdeeds which resulted in paying $70 million for the property which was actually worth several millions of dollars less,” the company says in court documents.
The developer, Indiana-based TWG Development, declined to comment.
Silverstone alleges that as market conditions were worsening, TWG’s construction loan was coming due and that the developer wanted to move fast in order to receive the $70 million.
In court documents, Silverstone says that TWG provided it financial and leasing reports that claimed the “strong” St. Peters apartment market would command high rents and that the property, at 1100 St. Peters Centre Boulevard, would reach over 90% occupancy within 18 months.
A news release at the time of the deal from TWG’s real estate brokers stated that the price tag was “a substantially higher price-per-door than any other sale in St. Charles County,” a testament to “strong demand for high-quality product.”
But when Silverstone took ownership in late 2022, the company realized that it was not collecting the amount of rent TWG said it would and that the developer had not provided all of the lease documentation.
Silverstone then conducted an audit where employees walked door-to-door to determine who was living in each apartment and whether their leases matched the TWG documents, according to the lawsuit.
The suit alleges that employees found vacant apartments that were meant to be occupied and people living in apartments without valid leases. Occupancy, the suit says, was far lower than 80%.
Silverstone also claims that it discovered various construction problems with the property, including cracking and “collapsing” tubs that were installed without supports. One tenant was reportedly severely injured as a result of a collapsing tub, court documents say.
The company also alleges that multiple instances of cabinetry and other fixtures that were drilled straight into pipes that caused water leaks, leading to wood rot and other mold issues.
Some electrical wiring was “mismatched,” forcing Silverstone to replace dozens of breakers, according to court documents.
The company said in the lawsuit that it took it 18 months to get the property close to the $70 million value. Silverstone attorney Kartik Singapura said his client has so far paid hundreds of thousands of dollars to correct most of the construction defects.
He declined to comment further.
The suit seeks damages, interest, attorneys fees and other relief.
View life in St. Louis through the Post-Dispatch photographers’ lenses. Edited by Jenna Jones.
