CA Ventures Legal Trouble Spreads Across U.S.

Add angry parents of college students and unpaid contractors to the list of problems facing CA Ventures.

The Chicago-based multifamily giant was already playing defense against an office eviction and lender lawsuits, and now its legal challenges have deepened and spread across the nation. It’s a drumbeat of cases that has grown louder since this summer, when the first red flags indicated the company was struggling to fulfill its financial obligations.

In the latest local developments for CA Ventures, several Cook County judges on multiple cases have entered a total of $10 million in judgments against the company and knocked a lawyer representing it on its eviction from its 70,000-square-foot office at 448 North LaSalle Street.

On top of that, CA Ventures’ last-minute request for more time — made on Aug. 31, the same day its response to the eviction lawsuit was due — rubbed one judge the wrong way.

“I find that to be very disingenuous,” Judge Maria Barlow said.

That aligned with contentions by CA Ventures’ landlord.

“They mentioned in their motion that the parties are engaged in settlement discussions, but there are no such meaningful discussions,” Tim McClean, an attorney for the LaSalle Street property’s landlord, a venture of Jamie “Jay” Javors, said in an eviction court hearing this month, according to public records. “Instead, they submitted an entirely unacceptable settlement offer on the morning of Aug. 31, which was immediately rejected on that very same morning.”

Now, Minnesota lawmakers are also taking a look at the company, which claims to have $15 billion in assets worldwide. The legislators got involved after fielding concerns from University of Minnesota officials, students and their parents regarding CA Ventures apparent failure to complete a new six-story housing development near a Minneapolis campus on time. It echoes a similar situation in Pittsburgh, where an apartment complex with around 300 units being developed by CA Ventures fell behind schedule and forced students to keep searching for housing at the last minute this fall, according to a report by the University of Pittsburgh’s student newspaper last month.

The Minnesota delay sent hundreds of students into a scramble for housing this fall as classes started, and some of their parents are unsatisfied with CA Ventures’ offer of gift cards of either $80 or $150 daily to renters. Several filed lawsuits against CA Ventures seeking to terminate their leases with no penalties.

“This project is in my opinion a black eye on the construction industry,” Dan McConnell, president of the Minnesota State Building Trades Council, told state senators this month. “… We’ve had reports of workers not being paid for hours worked, including overtime pay; we’ve had reports of workers being paid in cash without withholding taxes deducted from their wages; we’re aware that Minnesota OSHA is investigating numerous safety violations.”

CA Ventures CEO Tom Scott, who started the firm in 2004 as a student housing developer before branching into senior living and standard multifamily, said he couldn’t comment on this story, citing ongoing litigation.

Meanwhile, contractors in Sacramento have filed a cumulative $8 million in liens against a nearly complete $66 million CA Ventures multifamily development in that city, alleging they haven’t been paid by the developer.

That isn’t CA Ventures’ only recent issue in California, where it also opted to kill a 14-story biotech tower development that had been planned in the Bay Area city of Emeryville earlier this year.

Back in Chicago, judges in lawsuits filed by individual investors who claim CA Ventures affiliates owe them a collective $10 million in debts they loaned to the company all filed judgments in favor of the lenders and against Scott’s firm in recent weeks, court records show. The company argued in a court motion that the lenders’ claims against the company should be barred, and that the guarantees to repay the debt they’ve cited in order to collect money from the personal assets of Scott and his firm’s CIO John Diedrich are “void and unenforceable as unconscionable.”

An attorney for the company in the eviction case contended the extra time was needed because one of the affiliates of CA Ventures named as a defendant in the case was likely to seek separate legal counsel.

The office landlord’s attorney said CA Ventures has now missed three months of rent totaling nearly $1 million owed. That case is set for a court hearing Oct. 12.