A deal for a Highland Park house fell apart. There's more.
Something didn't smell right to Kathy Rifkin when a self-styled millionaire marijuana farm investor and music producer wanted to rush his holiday-season purchase of her multimillion-dollar home in Highland Park and many of the furnishings.
"If he has so much money, why does he want to buy my bedding, my art, my wine collection," said Rifkin, whose 18-room house on more than 2 acres on Hazel Avenue has been on and off the market for about four years. Typically, people who pay $4.8 million for a house, she said, "want to buy their own art," not to mention bedsheets.
According to a lawsuit Rifkin has filed, the buyer's agent said the man had to buy fast because his children were in a bad situation.
"He could afford to stay at the Four Seasons," Rifkin said of the man, who said he had produced music with Beyonce and had quick access to millions in cash. Even so, at every turn, when proof of funds was needed, he and his agent failed to produce, according to the lawsuit Rifkin's attorney filed June 29 in Lake County Circuit Court. The deal for the house collapsed in early January.
There are at least three other homes in Highland Park and Glencoe where the purported mogul, Ricco Garrett, represented by longtime North Shore real estate broker Debbie Hymen, pursued a similar effort, according to Rifkin's lawsuit. Garrett's goal wasn't to buy the homes, but to "move into the properties without payment until he was either evicted or otherwise forcibly removed from the property," the suit says.
Rifkin's suit alleges that Hymen and her brokerage, Berkshire Hathaway HomeServices KoenigRubloff Realty Group, committed fraud and violated Illinois' Real Estate License Act.
Garrett also is named in the suit, but "we can't find him," said attorney Aaron Stanton of Chicago law firm Burke Warren McKay & Serritella, who is representing Rifkin.
Crain's could not reach Garrett. Crain's requested comment from both Daisy Danao, a spokeswoman for Berkshire Hathaway HomeServices KoenigRubloff Realty Group, and Richard Perna, a lawyer at Chicago firm Fuchs & Roselli who represents Berkshire. Neither responded to the request. Hymen, reached by phone, said she knew nothing about the allegations and hung up.
As laid out in the suit and in reports that Crain's obtained from the Highland Park Police Department, the convoluted story includes multiple instances of checks promised by Garrett or Hymen that never showed up, repeated promises from Hymen to get all paperwork in order and, it seems, exaggeration of Garrett's roles in the music and marijuana industries.
The earliest known instance was in 2013, when Hymen approached the agent for a Glencoe mansion listed at almost $7 million, according to the suit, and said she had "a perfect buyer to purchase the mansion with cash. The buyer was famous and in the music industry [and was] a family friend she had known forever." Hymen didn't provide proof of the buyer's financial qualifications, so the seller's agent, Jody Dickstein of Coldwell Banker, didn't let them tour the property.
Dickstein declined to comment, as did Susan Maman, the @properties agent representing another Glencoe home that, according to the lawsuit, Hymen and Garrett pursued in January after the deal with Rifkin fell apart.
Two years ago, Hymen and Garrett toured a $6.5 million mansion on Laurel Avenue in Highland Park a few blocks from Rifkin's. According to a police report, Garrett arrived with an entourage of at least five people and said his security detail was circling the block. Garrett and Hymen talked up his prominence in the music business as they toured "every inch" of the home and beach, according to the report, and one woman in the entourage asked the homeowners if they planned to travel over the summer.
The homeowner got nervous, the report says, and when police later talked to Hymen, she said Garrett is "a well known music producer with the stage name Tito Ali . . . (and) is related to Muhammad Ali." She told police she had not verified his ability to purchase a multimillion-dollar home but was close to doing so.
When Highland Park police looked into Garrett's social media accounts, they found he had posted photos of himself in the Laurel Avenue house, including one of him in a bathtub, the 2016 report says.
At around the same time, according to police reports, Garrett moved into a listed Highland Park house for a weekend, until being forced out by police that Monday. The report says that at 11 p.m. on a Friday, Hymen requested a showing of the house, which was offered both for sale, at about $1.4 million, and for rent, and the listing agent told her where the keys were hidden. Hymen later told the listing agent that Garrett had moved in, according to the police report.
In both instances, the homeowners called police. Neither incident resulted in charges.
At the time of the Laurel Avenue showing, Hymen was a Coldwell Banker agent. A spokesman said the firm would not comment on a past employee.
Rifkin bought her 10,000-square-foot Hamptons-inspired mansion on Hazel Avenue in 2011 for just under $4 million. She says that while in the home, she finished the fire sprinkler and alarm systems that the previous owner had left undone, repainted the interior, upgraded the kitchen countertops and made other improvements. She first listed it in June 2014 for $5.8 million.
Amid the general doldrums in the North Shore real estate market, only one house in Highland Park has sold for more than $4 million since she listed, a house on almost 5 lakefront acres that went for $10.9 million in 2015.
Thus, when Hymen told Rifkin's real estate agent, Ryan Newberry L'Heureux of @properties, in December that she had a client who was likely to make a quick cash offer, "we were interested," L'Heureux said.
Between Dec. 27 and Jan. 3, according to Rifkin's suit, negotiations were swift but details on financing were slow. Hymen told L'Heureux that Garrett would pay the full asking price, which at the time was about $4.8 million, and that Garrett, a partner in a big pot farm operation called the Jungle Boys, had recently received a lump-sum payment of $6 million.
(There is a Jungle Boys cannabis operation in California, but it's not clear whether that's the one Garrett was claiming affiliation with, Stanton said. The operation in California did not respond to a message sent via its website.)
Rifkin told Crain's she had recently taken out a large loan to cover renovations on the Naples, Fla., condo that she bought from her parents' estate, and expected to be able to pay it off with the proceeds from selling the Highland Park mansion. During the December/January interactions with Hymen and Garrett, she said, she received an offer of about $7.5 million for the Naples condo, although it wasn't on the market. She turned it down, she said, because she thought a sale was imminent in Highland Park. A day later, Hymen withdrew Garrett's offer.
Now stuck with payments on both the Highland Park mansion and the Florida condo, Rifkin is suing for damages. The defendants' attorneys have not yet responded to the suit, Stanton said.
The Hazel Avenue house came back on the market last week, priced at $3.99 million, about the same Rifkin paid for it seven years ago, before making upgrades.
This article originally appeared in Crain's Chicago Business at http://www.chicagobusiness.com/realestate/20180719/CRED0701/180719849/a-deal-for-a-highland-park-house-fell-apart-theres-more#utm_medium=email&utm_source=ccb-residential&utm_campaign=ccb-residential-20180719