When Ian and Danielle Young first toured their Park Reserve condominium in 2017, there wasn’t much to see. In realtor terms, it was a “white box” of studs and sheetrock. But to the Youngs, it was 850 square feet of potential.
The condo was in the rehabbed former Trinity Luthern hospital perched on a hill near the World War I Memorial with expansive views of the downtown skyline. The streetcar route was just down the block. Across the street was Penn Valley dog park, where their rescue, Rory, could run off his sheep dog energy.
The property boasted a variety of luxury amenities — a golf putting green, tanning beds, massage room, gym and two salt water pools — and more were supposedly on the way. To top it all off, they were getting a 50 percent abatement on their property taxes.
“It seemed like a good deal,” Danielle Young says. “The amenities hadn’t been finished yet, but, from what we understood, were coming very soon. It seemed like our property would only appreciate in value.”
The Youngs sold their suburban home in Grandview and, in January 2018, signed for a $175,000 mortgage on their second-floor unit with direct access to the courtyard — something they hadn’t found anywhere else in the city.
It proved to be the worst financial decision of their lives. Two years later, they say their unit is uninhabitable. They’re living in a Lenexa property owned by Danielle Young’s father while still paying their mortgage and homeowners association fees each month. They’ve filed one of four lawsuits pending against the property’s developer, alleging breach of contract, negligence and fraud.
“We’re just dumbfounded,” Ian Young says. “I don’t understand why this is taking years and months and thousands of dollars and legal fees for something that never should’ve been allowed in the first place.”
At a time when downtown Kansas City is seeing rapid redevelopment and an influx of new and wealthy residents, the Park Reserve debacle is a cautionary tale of just how much can go wrong when big promises and big money collide with vacant old buildings and historically underserved neighborhoods.
The Youngs are not alone in their problems with Park Reserve, the latest controversy tied to infamous developer Wayne Reeder, 86. The convicted fraudster has been the subject of dozens of court actions, including numerous lawsuits, and several unflattering media stories. He served 28 months in federal prison and was ordered to pay $16.5 million in restitution for his role in the failure of two insurance companies in the ’90s.
Now, while development is complete on two of the condo buildings, construction on the third, the Youngs’ building, has yet to be finished. In June, Park Reserve sent an email notifying residents that they had decided to cancel phase three of the redevelopment, leaving the largest building on the site vacant. The undeveloped section of the old hospital — defined by graffiti, boarded-up broken windows, crumbling cement and piles of trash — will continue to sit vacant.
“It’s like buying something brand new and it literally broke the first day,” Ian Young says. “They should’ve never sold the unit, and we just want them to take it back. ”
Alex Malloy is the president of the Park Reserve HOA and has been entangled in a series of battles with the developer over everything from unpaid HOA dues to a lack of lighting under the awnings outside. He says at least five of the condos in Park Reserve have been abandoned by their homeowners, who cited flooding, faulty elevators and other safety hazards. The outdoor pool is closed, as no one’s paid to maintain it. The putting green and tanning room are locked up, too, though the gym remains open.
As of press time, the developer had yet to get a permanent certificate of occupancy for two of the buildings after going through 45 temporary permits. Because there is no occupancy permit, residents can’t resell or lease out their units, Malloy says.
And, of course, they have not gotten the movie theater, basketball court or spa promised by a billboard that still hangs over the parking lot.
“We were tricked and we were conned and we were played to believe that we were going to get everything that we were promised,” Malloy says. “There’s now all of these homeowners that have their entire life savings, everything that they worked for, the American dream of owning a home, all sunk into a property that is currently uninhabitable.”
Reeder, his lawyer and Park Reserve’s representatives did not respond to 435’s requests for comment.
In a March interview with Matt Flener of KMBC TV 9, Reeder said the property is “a big loser” for him. He claimed the occupants and HOA are sabotaging the building.
“We have been damaged, we have been slandered, we have been broken into, and we know who the guilty parties are,” Reeder told the station.
For the Youngs, the problem started March 26, 2018, when they returned home from a weekend trip to find that their unit had flooded through the patio door. A construction manager added weather stripping, but on May 25, the Youngs woke to the sound of running water and their dog crying. When they got out of bed, they found themselves standing in a puddle.
“We had four power strips laying on the ground,” Ian Young says. “The one that was underneath my bed, the water was six inches from that power strip when I woke up that morning. From then on, we had to strategically place electrical things.”
The flooding only got worse from there, the Youngs say, including one October day when their pets had to escape the rising waters.
“I came home and there was water rushing in through the door,” Danielle Young says. “It was so bad that it had gone into all of the rooms. All of the animals — two cats and a dog — were taking refuge on the couch and crying.”
A sump pump eventually fixed the flooding. Then the ceiling started to leak and mold started to grow.
“We tended to feel better when we were away from the home and worse when we were there,” Danielle Young says. “I felt so bad leaving my animals in this potentially hazardous environment.”
Had they known about the developer’s past, maybe the Youngs wouldn’t have been so surprised.
Park Reserve is an offshoot of Interstate Underground Warehouse and Industrial Park, which is incorporated as a storage facility in an old limestone mine on the city’s east side.
The company was started by Wayne Reeder in the ’70s. His ex-wife, Sammy Jo Reeder, received the property in a divorce settlement and is now the legal owner and president. In 2017, Wayne Reeder told the Kansas City Star he is just a “lowly consultant” for the business. Interstate Underground Vice President Dennis Speer says Sammy Jo owns other properties, but Wayne does a lot of her “wheeling and dealing.”
Wayne Reeder has some experience purchasing troubled properties like Park Reserve, which was the Trinity Lutheran Hospital in a former life.
At that time, the city agreed to a 25-year property tax abatement — excusing the fact that Reeder is a convicted felon. Before the activities that sent him to prison, Reeder spent most of his life in Southern California, where he developed hotels and defaulted on several multimillion-dollar loans.
Park Reserve’s residents say they had no idea he was involved.
“He did a really good job of keeping his name off of the project, so when we researched it before buying, it seemed like a good opportunity,” Park Reserve homeowner Kate Sweeten tweeted on June 3, 2019.
Sweeten, who declined to comment for this story, has a running Twitter commentary about her issues with her “garbage fire of a living situation” in the building. Sweeten’s feed shows piles of empty aerosol cans, a pop bottle filled with urine, an empty milk carton sprouting weeds and graffiti that reads “IT WILL BE QUICK FACE ME COWARDS.”
Sweeten tweeted saying she knows the abandoned building that was supposed to be phase three will never be finished, but “razing it for green space would be a dream come true!!”
https://twitter.com/kate_kansascity/status/1135654592518270977?s=20
This is 75 steps from our back door on Wyandotte. 23 missing, damaged or broken windows. Also random debris pile – bricks, tile, wood, PVC, cement, yard waste, glass. pic.twitter.com/sF6liCdJA6
— Kate Sweeten (@kate_kansascity) June 3, 2019
Trash, an old metal barrel that was used as a fire pit as some point, graffiti and what looks to be a soda bottle full of urine. pic.twitter.com/24EfFENnFW
— Kate Sweeten (@kate_kansascity) June 3, 2019
This piece of trash has been sitting by the front door for so long, it’s growing a plant. pic.twitter.com/7PLOqOYkYq
— Kate Sweeten (@kate_kansascity) June 3, 2019
https://twitter.com/kate_kansascity/status/1152625071053295617?s=20
The situation is now heading to court. The HOA, led by Malloy, is suing, alleging that the Park Reserve is not paying required HOA dues on unsold units.
“The board of representatives can’t get a loan to fix anything because the developer refuses to pay his share,” Malloy says. “People are having to sell their homes for losses or are thinking of walking away from their homes because they’re being taken advantage of. We could care less if we get the basketball court or the indoor pool. We just want to be able to sleep at night and know that our home is safe.”
Residents we spoke to described feeling unsafe, especially after getting warnings from the Kansas City Fire Department after an inspection on Feb. 1, 2019. This was one of “at least 10 to 15 inspections, easy,” KCFD has done since January, according to fire investigator Tom Kievlan. Out of a stack of paperwork, he says all of the violations have been taken care of, except for a backup generator and sprinkler line that still need to be installed. The deadline for those two fixes has already passed.
KCFD Deputy Chief Jimmy Walker says he believes both the developer and the residents are at fault. Reached for comment, he called the situation a “pissing match” between the two parties.
Among the homeowners who have filed suit is Ashley Morgan, an attorney for Park University in Parkville.
Morgan alleges she had water leaks in six different areas of her condo for a year and a half straight, many of which produced black and green mold and some of which were coming directly from a light fixture. Morgan stopped receiving any response from Park Reserve around October 2018.
Morgan says her complaint to the city is what prompted KCFD to do an inspection. The marshals then told Morgan her condo was unsafe, with no fire alarm, no fire suppression system and water leaks near the electrical wires.
Morgan moved out of the condo two days after the inspection and is living with her parents in Lee’s Summit. She filed her lawsuit on March 22, 2019. She’s not sure why the city is allowing residents to inhabit the condos given the code violations.
“I completely understand on a pragmatic level that they’re not going to evict 100 people at the same time,” she says. “But on another level, it’s not safe or legal.”
For now, the residents are hoping the courts can help them. In addition to the Youngs and Morgan, partners Eric Schulte and Kevin Kraft have sued. Among the defendants are Wayne Reeder, Interstate Underground, Leslie Reeder and Citizens Bank and Trust, a part owner of Park Reserve.
Schulte and Kraft filed their lawsuit on May 24, 2019, after living at Park Reserve for about 15 months. According to the lawsuit, their penthouse condo had roof leaks that led to uncontrollable mold growth in the drywall. As time went on, Schulte says he developed an allergic reaction to the mold, inducing migraines, fatigue and
blurred vision.
“There are hundreds of other people that are forced to live in this mess who don’t have another choice, who don’t have a family member that can save them,” Ian Young says. “We’re the lucky ones.”
Homeowners are left feeling powerless. All they can do is wait out their lawsuits in hopes they’ll no longer be anchored to a home they can’t live in.
In some ways, the situation at Park Reserve reminds Malloy of the infamous 2017 Fyre Festival, where thousands of people paid big bucks for a “luxury” musical festival experience and were left sleeping in FEMA tents and eating pre-packaged sandwiches on a remote island.
Then again, the concertgoers eventually got to go home.
“They just lost a week, and the people in our community are facing losing everything,” he says. “It is so analogous to the Fyre Festival with the exception that it is so much worse.”
