Palermo's original developer makes Chicago news over keeping earnest money

Here's story from a Crain's Chicago Business publication about the original developers of Palermo Palm Springs. The developer wants to keep earnest money even though the Chicago condo project in question mostly now is being rented out. “They're not getting the luxury, exclusive condo; they are buying into a rental building," says the would-be buyers' attorney.
 The story:
 The developers of a luxury Gold Coast condominium project may have given up on selling units in the building, but they're not letting go of the earnest-money deposits from would-be buyers. Ronald Shipka Sr. and Richard Stein gave up control of the Walton on the Park project in March to a venture controlled by the owners of Dart Container Corp., which is now aiming to rent the 160 unsold condos in the 189-unit project at 2 W. Delaware St.
 But buyers who never closed on their condos may have to do more than just politely ask Shipka and Stein for their earnest-money back: Recent lawsuits over the deposits suggest that the developers plan to keep the money, one way for them to salvage a losing investment in a depressed condo market.
 In the most recent case, brothers Milan and Dan Kesic are suing a venture led by the two developers to collect $58,900 in earnest money they paid in February 2007, plus damages in excess of $50,000.
 In another case, buyer Gretchen E. Green seeks to collect a $100,000 deposit she put down for a $1-million unit in the project in July 2007. Both buyers allege that the venture breached their purchase agreements by not completing their units on time and by converting the building to rentals.
 “They're not getting the luxury, exclusive condo; they are buying into a rental building,” says Donald C. Battaglia, a lawyer representing the Kesics. “The buyers aren't getting what they bargained for.”
 The Dart family bailed out the Shipka/Stein venture in March, when it paid off an $82-million construction loan on the development. But the venture retained the rights to the earnest money, says a Dart executive.
  It's unclear exactly how much earnest money is at stake, or how many condos still have outstanding deposits, but the dollar amount could easily reach into the millions. As of the end of 2010, 26 units in the project were under contract but hadn't closed, according to Appraisal Research Counselors, a Chicago-based consulting firm. In the third quarter, 77 units were under contract but not yet closed.
 In at least one case, the Stein-Shipka venture argues it is entitled to the earnest money, saying in a filing that there was “no promise or agreement” in the contract to complete the project by spring 2010.
 It was an “estimate and nothing more,” according to a motion to dismiss Ms. Green's complaint.
 The developers' lawyer, Glenn Udell, a partner in Chicago-based Udell Pomerantz & Delrahim Ltd., did not return messages. Mr. Shipka, chairman of Chicago-based Enterprise Cos., also did not return phone calls.
 Miss Penny Lane says: She's earnest in saying she loves Palermo.