The One Lincoln Park high-rise at East 20th Avenue and Lincoln Street turned heads when it became the first new residential tower in more than 40 years to rise out of downtown’s skyline.
But the visionary behind the project is mired in a legal morass that includes felony charges, a host of civil lawsuits and a new grand jury investigation.
Erik Osborn, 41, stands accused of two third-degree felony counts and faces up to 24 years in prison if convicted. According to an indictment handed up in December 2007, Osborn allegedly diverted about $147,000 from One Lincoln Park and $108,000 from an office building renovation project at 5351 S. Roslyn St. in Greenwood Village. He allegedly used the money for improvements to his own home.
But even though he lives in a $6.5 million home, he recently tried to seek a public defender, saying he couldn’t afford an attorney.
Meanwhile, there is a new grand jury investigation into Osborn’s business dealings, said Lynn Kimbrough, spokeswoman for the Denver district attorney’s office. A number of other witnesses are being interviewed, she said, declining to disclose specifics of the investigation.
Osborn is also being sued by numerous people connected to his developments — capital-funds manager Michelle Brokaw, architect Brad Buchanan and real estate agent Julie Gelfond among them. The complaints include nonpayment of commissions and fees for work performed on projects including One Lincoln Park.
Osborn’s attorney, Charles Fife, said the criminal charges against his client are a result of getting crosswise with his influential investors, including auto-dealership owner Doug Moreland, talk-radio personality Tom Manoogian and Blair Richardson, a prominent Denver Republican and managing partner of Bow River Capital Partners.
“I haven’t seen a case like this before,” Fife said. “It just has that smell to me.”
An Arizona native, Osborn moved to Colorado when he was 12 and grew up in the construction industry.
He describes his rapid rise from small-time construction projects to building a massive high-rise as a matter of saving and investing. He built and sold all his own projects — including custom homes and apartment and office buildings — then sold the projects for a profit, he said.
Osborn befriended Manoogian, who goes by the radio persona “Lou from Littleton,” at the Greenwood Athletic Club and started running with some of Denver’s big-name businessmen.
Manoogian and Moreland, known locally as “Dealin’ Doug,” were Osborn’s main investors in One Lincoln Park.
On hook for millions
They had already invested $4.25 million in a housing development Osborn planned for an area north of Denver’s Polo Club neighborhood when he approached them with a plan to build the 31-story tower on the site of a downtown parking lot. They gave him $5.2 million for the project in February 2005.
The pair say they were already on the hook for millions of dollars when they found out Osborn had allegedly misappropriated funds.
“We knew Erik had overcharged some money, but we thought we had resolved the issues,” said Moreland, who said he and the other investors were unaware of the criminal investigation until they were notified by the DA’s office.
They continued to finance the project, which Osborn is no longer connected with, because they were already in too deep to pull out.
“We found out he was abusing the relationship after we had invested our money,” Manoogian said. “We were kind of trapped. Our money was at risk.”
Osborn counters that he had been allocated draws and commissions — essentially allowing him the money — and met all the required benchmarks for performance. He maintains that he has gone four years without a paycheck.
He argues that he was the one who tied up the land for One Lincoln Park and took it through the entitlement process before Moreland and Manoogian purchased the property for $1.9 million. They then entered a purchase-sale agreement with Osborn for $11 million.
“I brought huge value to the real estate I signed over to Moreland and Manoogian for the project,” Osborn said. “All the time that goes into developing a project was done on my time. I took time off other ventures to work on these projects.”
Couldn’t come up with cash
As the developer, Osborn was required to invest a significant amount of money in the project in December 2007 but couldn’t come up with the cash. That’s when he called on friend Ed Cerkovnik, president of Breckenridge Brewery, who made the payment and took over Osborn’s position as project director.
Osborn’s criminal trial, originally scheduled for Feb. 2, was delayed after his attorney, Jeffrey Pagliuca, quit, citing “non-adherence to fee agreement” and “irreconcilable differences.” Saying he couldn’t afford to pay an attorney, Osborn then requested representation by a public defender.
After examining Osborn’s finances, a collections investigator found that Osborn did not meet the criteria for indigency required for representation by a public defender.
The investigator found that even with all the liens and loans against his $6 million Polo Club home, there was about $415,000 of equity in the property. The nearly 15,000-square- foot home on 1.24 acres has four bedrooms, seven bathrooms, four fireplaces, a three-car garage, in-floor radiant heat, a home theater, a gym with spa and steam, and a humidor/wine cellar.
Osborn and his wife, real estate broker Angela Osborn, are making monthly payments of $4,000 for a Cadillac Escalade and a Mercedes-Benz, as well as nearly $1,300 a month for health insurance, according to the report.
“Tens of thousands of dollars flow through two accounts in Ms. Osborn’s name every month,” the report states. “These accounts were used to pay some of the expenses listed as bills for Osborn Development Corp. making it more likely than not that these accounts are connected to Mr. Osborn’s financial affairs.”
Osborn listed $40,000 as the monthly payment for the first-, second-, third- and fourth-mortgage loans on his home, according to documents he supplied the investigator. Osborn Development shows unpaid bills totaling $500,126. He also has a balance of $80,822 on his American Express Rewards Green Card.
“An abuse” of judicial system
The next time Osborn appears in court, Fife, his new attorney, will be at his side. The longtime defense attorney has agreed to represent Osborn, even though Fife has been told the developer can’t pay.
“It appears to me that this is an abuse of the criminal judicial system to effectuate a hostile takeover of One Lincoln Park,” Fife said of the 2007 charges. “Part of the reason I’m doing this case is because as a defense attorney, I owe a duty to make sure an innocent person doesn’t have to plead guilty to something he didn’t do when the only thing that’s keeping justice from being done is the money for a defense attorney.”
Osborn will next appear in court May 28, when a trial date will be set.
Manoogian said he now thinks he ignored numerous red flags pointing to Osborn’s free-spending and questionable business practices. He recalls Osborn hosting a business dinner in a private room at Del Frisco’s, where virtually every employee knew his name. As the party was ending, the waiter asked Osborn whether he wanted to take some of his wife’s favorite lemon cake home to her.
“They put it in his car, and I thought to myself, ‘Why is this guy asking me for money?’ ” Manoogian recalled.
Neither Moreland nor Manoogian has brought civil charges against Osborn, and they maintain they just want to get the project sold and move on.
Though they parted on a sour note, Moreland acknowledges Osborn’s skill as a businessman. “He’s a very persuasive, very good salesman,” More land said. “I wish he was selling cars for me. I was sold on him, and I believed him.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
