Independent owners lose control of and representation on the Board of Directors

• AIR/AIMCO takes immediate control of the Board of Directors, forever.
• Independent owners lose all control of the Board of Directors, forever.
• An AIR/AIMCO-board will represent the interests of AIR/AIMCO, not independent owners.
• Independent owners lose all representation on the Board of Directors, forever, as transfer of Board-control to AIR/AIMCO is permanent.
• Independent owners will no longer be able to elect any individual to the Board of Directors, and therefore, the Board will no longer represent the interests of independent owners.
• AIR/AIMCO may seek to appoint all employees of AIR/AIMCO to an AIR/AIMCO-Board, without appointing any owners.
• Any so-called owner protections are illusory, as these protections may always be controlled or circumvented by AIR/AIMCO (see more on this below).
• The AIR/AIMCO-Board grants AIR/AIMCO a multi-million-dollar management contract, which lasts forever, and we independent owners will have to pay for it.

Independent owners lose financial control of the South Tower

• Independent owners lose financial control, forever.
• A new and permanent AIR/AIMCO-Board would determine everything that independent owners pay – e.g., annual budget, special assessments, management contract, etc.
• The AIR/AIMCO-Board will make all financial decisions for the South Tower, and if the independent owners disagree, they will have little recourse.
• Competitive bidding among independent management companies to manage the South Tower no longer exists, and the ability to change management companies ceases forever, because AIR/AIMCO will receive a multi-million-dollar management contract, which lasts forever, that the independent owners must pay for.

No guarantee of any ability to control much less decrease costs

• AIR/AIMCO does NOT pay any money directly to owners – don’t be fooled.
• AIR/AIMCO does NOT guarantee that they can control any costs.
• AIR/AIMCO only attempts to control what they refer to as “Controllable Costs,” which is not all costs, and specifically excludes many costs including insurance, deferred maintenance (e.g., roof repair), capital improvements, and numerous other costs.
• The AIR/AIMCO reference to $1,250 per unit is merely a hypothetical reduction in “Controllable Costs,” not an actual or guaranteed cost reduction, and certainly not an amount paid to any owner.
• AIR/AIMCO does NOT guarantee they can control insurance costs because insurance is excluded from the “Controllable Costs” that they will only attempt to control.
• AIR/AIMCO does NOT guarantee against future increases in your monthly maintenance, and since they take no responsibility for even attempting to control many costs, independent owners’ monthly maintenance costs are likely to increase.
• AIR/AIMCO does NOT guarantee against special assessments, but rather the AIR/AIMCO-board will decide exactly what assessments independent owners pay including: (1) special assessments decided and levied by the new AIR/AIMCO-Board, and (2) special assessments levied by the AIR/AIMCO parent company pursuant to the REA (the contract that governs the relationship between the South Tower and AIR/AIMCO).
• Not only does AIR/AIMCO not guarantee they will be able to control any costs, but they will only attempt to control “Controllable Costs” for 5 years.  After 5 years, AIR/AIMCO has no further obligation, but retain control of the South Tower and its Board forever.
• AIR/AIMCO is attempting to buy control of the South Tower and its Board, permanently, and the purchase will be made with the funds of independent owners.  The only risk to AIR/AIMCO is that they pay the South Tower Association up to but no more than $562,000 per year for 5 years, if AIR/AIMCO is unable to reduce costs by this same amount or more, but this amount will be paid with the funds that independent owners must pay to AIR/AIMCO under the management contract.  After 5 years, however, AIR/AIMCO has no further risk, financial or otherwise.  In the end, AIR/AIMCO will have bought complete control of the South Tower and its Board, forever, using the independent owners’ own money.

Conflicts of interest for AIR/AIMCO

• The AIR/AIMCO-Board grants AIR/AIMCO a management contract, which lasts forever, that independent owners pay for.
• While the terms of the management contract awarded to AIR/AIMCO are negotiated by a committee of non-AIR/AIMCO owners, the AIR/AIMCO-Board not only selects the owners on the committee but is able to replace those owners at will.
• The AIR/AIMCO-Board would supervise the AIR/AIMCO management company, or, in other words, AIR/AIMCO would supervise itself.
• The AIR/AIMCO-Boad would be able to rubber-stamp-approve all special assessments levied on independent owners by the AIR/AIMCO-parent company under the REA (the contract that governs the relationship between the South Tower and AIR/AIMCO), or, in other words, AIR/AIMCO would supervise itself.
• An AIR/AIMCO-Board would have no incentive to enforce the provisions of the REA, the contract that governs the relationship between the South Tower and the AIR/AIMCO, against AIR/AIMCO.
• The AIR/AIMCO-Board would have the power to excuse and forgive any damage caused by tenants of AIR/AIMCO owned units (e.g., the $500,000 in elevator damage caused by one AIR/AIMCO tenant).
• The AIR/AIMCO-Board would have the power to turn the South Tower into a construction zone, thereby allowing AIR/AIMCO to mass-renovate all their units, the resulting construction and noise making the units of independents owners unlivable and/or unrentable.

Illusory protections for independent owners

• Any alleged protections to independent owners afforded by a committee of non-AIR/AIMCO owners are non-existent since the AIR/AIMCO-Board not only selects the owners on the committee but is able to replace those owners at will.
• Any alleged protections provided by the requirement of a vote of non-AIR/AIMCO owners are non-existent.  Not only would the independent owners need to live in a constant state of readiness to attend all such meetings, but the owners would live in constant fear of missing such a meeting, for example an unexpected or ill-timed meeting (e.g., at 2am Christmas day or Yom Kippur).
• All protections afforded under the REA would become non-existent for independent owners, since an AIR/AIMCO-Board is unlikely to enforce those provisions against AIR/AIMCO. 
• If an AIR/AIMCO-Board were to breach the terms of any governing condominium document, the only recourse for independent owners would be to sue the Board, subjecting the owners to significant legal fees (plus the risk of losing and paying the Board’s legal fees).
• If AIR/AIMCO were to breach the terms of the REA, an AIR/AIMCO-Board is unlikely to attempt to enforce the terms of the REA.  And while it is unclear of independent owners could sue AIR/AIMCO to enforce the REA, litigation with a multi-billion-dollar corporation such as AIR/AIMCO would subject owners to significant legal fees (plus the risk of losing and paying the legal fees of AIR/AIMCO).

Renovations and Maintenance

• The AIR/AIMCO-Board will always decide the special assessments that the independent owners must pay.
• If any renovations or beautifications are made to the South Tower, the independent owners will pay for it via a special assessment levied by the AIR/AIMCO-Board.  There is no such thing as a free lunch.
• As maintenance to items such as the roof, deferred maintenance and capital improvements are made, independent owners may pay for it via an assessment levied by the new AIR/AIMCO-Board.
• AIR/AIMCO controlled the South Tower and its Board of Directors for over a decade ending in late-2021 and, during that time, they neglected most maintenance and repair issues, such as the roof, fire safety system, HVAC and others.  These same practices are likely to continue under another AIR/AIMCO-Board.
• An AIR/AIMCO-Board is likely to ignore maintenance and repair issues at the South Tower, in order to decrease costs and increase profits for AIR/AIMCO.

Decreased property values

• AIR/AIMCO control will decrease the value of all South Tower condo units, not increase condo unit values.
• In the 2 years since an arbitrator terminated AIR/AIMCO control over the South Tower, South Tower property values have increased by about 50%.  In contrast, all South Tower properties were undervalued by at least 30-40% during the prior period of control under AIR/AIMCO.
• When a developer such as AIR/AIMCO controls a condominium such as the South Tower, real estate agents tell their clients not to buy at that condominium, thereby further decreasing property values.

Termination of the South Tower Condominium

• AIR/AIMCO is attempting to make it easier to terminate the South Tower condominium and force independent owners to sell their homes/investments at a reduced value.
• The original and current condominium declaration for the South Tower condominium can only be terminated by the agreement and vote of all (100%) owners.
• However, the AIR/AIMCO amendment reduces this threshold immediately.
• And further amendments are a possibility.  For example, once AIR/AIMCO controls 66 2/3% of all votes (they already control at least 260 units, or at least 46% of the units, and are actively acquiring more), they may pass another amendment to attempt to reduce the termination threshold even further.

The new apartment tower proposed by AIR/AIMCO

• AIR/AIMCO previously attempted to construct a new apartment tower on the Flamingo property, which would have subjected the independent owners to a special assessment (according to their attorney Michael Larkin) and increase owners’ costs (under the REA).
• The City of Miami Beach terminated this apartment tower project when it learned that AIR/AIMCO was suing the South Tower to force them to consent to this new apartment tower, at the time referring to AIMCO/AIR as a bad corporate citizen.
• The legal team for AIR/AIMCO including current AIR/AIMCO director (and attorney) Ken Diamond, also threatened to sue the then Board members personally, if they refused to consent to this new apartment tower. 
• In the future, the AIR/AIMCO-board would have the power to rubber-stamp the approval of any such construction and force the independent owners to pay for it.  If the independent owners disagreed with such an approval, they would have little recourse.

Quality of life issues

• The South Tower was controlled by an AIR/AIMCO-Board until late-2021 and, during that time, neglected maintenance and repair issues such as the roof, HVAC, fire safety system, and other systems.
• An AIR/AIMCO-Board would have the power to turn the South Tower into a construction zone, allowing AIR/AIMCO to mass-renovate their units, the accompanying construction noise making the units of independents owners unlivable and/or unrentable.
• An AIR/AIMCO-Board would have the power to operate the South Tower as a commercial apartment rental complex rather than a condominium for individual owners.

• An AIR/AIMCO-Board is likely to ignore maintenance and repairs to the South Tower, to enable AIR/AIMCO to reduce their costs and thus increase their profits.

Single-Company Risk

• Allowing AIR/AIMCO to control the South Tower exposes the South Tower to all the risks, financial and otherwise, to which AIR/AIMCO is exposed, or what is often referred to as unwanted exposure to “Single-Company Risk.”  For example, if AIR/AIMCO were to experience financial problems, these problems could be transferred to the South Tower.
• There is significant risk to being closely associated with a single real estate developer such as AIR/AIMCO, especially in time of rising interest rates, which typically negatively affect real estate developers.
• As of October 1, 2023, the AIR REIT (AIRC) is priced at 30.70, about 43% down from its all-time high, and below its initial opening day price of 37.25, suggesting a problematic business and/or investment model for AIR/AIMCO.