Owners of three floors at Sutton Place sue Minnesota developers

08/08/2013 5:20 PM

08/08/2013 5:21 PM

The owners of three floors of downtown’s 11-story Sutton Place office building are suing the owners of the other floors for not paying for building-wide expenses.

TLB Inc. and Dragon Estates filed lawsuits last week against Minnesota-based developers Michael Elzufon and David Lundberg, several of their companies, and their main creditor, Profinium Bank of Mankato, Minn.

The suit contends plaintiffs are owed $24,000 from Elzufon, Lundberg and Profinium for building-wide expenses.

Lawyer Abdul Arif, an owner of the first floor, said in a Wichita Eagle story in June that he and Jeremiah Connelly, an owner of the third and fifth floors, together pay $10,000 a month for utilities for the building, and hadn’t gotten any help from the bank or Real Development in months.

Wichita Data Center, Connelly’s company, is also suing for $7,053 for unpaid telephone and Internet service it provided.

Elzufon and Lundberg bought Sutton Place, at William and Market streets, in 2007 and legally broke the floors into separate properties for individual ownership. One problem that can occur in such arrangements is that one or more of the owners don’t pay their share of common expenses, such as utilities.

Sutton Place is one of a dozen downtown buildings that Elzufon and Lundberg bought in the past decade before running into severe financial problems. They had converted several of the buildings into the new ownership structure.

According to the suit, Profinium Bank has taken control of the fourth floor from Elzufon and Lundberg. The suit calls the bank the “de facto owner” and claims it was collecting the rent paid by the Kansas Department of Labor, which was a tenant on the fourth floor until recently, but didn’t pay a share of the building’s common costs.

The lawyer who represents the plaintiffs had no comment. A representative of the bank also said he had no comment.

On Thursday, Lundberg disputed the lawsuits’ contention that they owe the money. He said the floors owned by Sutton MN are empty and not using the amounts of electricity, heat and water that are being used by Arif and Connelly’s floors. But, he said, discussions with Arif and Connelly have gone nowhere.

Arif and Connelly knew that most of the building was empty going in – Arif has been there about a year and Connelly about six months, Lundberg said. The two bought the floors very inexpensively, and now are making demands, Lundberg said.

“We won’t pay for what we don’t use,” he said.

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