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SURFSIDE, Fla. (AP) — The condo tower collapse in Surfside could exacerbate the division that already exists between the tiny Florida town’s new luxury buildings built for the global elite and those constructed decades ago for the middle class. It is already creating headaches for some small businesses.

Beachgoers walk by the beach entrance to the Arte by Antonio Citterio condominium, center, Tuesday, June 29, 2021, in Surfside, Fla. Jared Kushner and Ivanka Trump rent an apartment at Arte while their home is under construction at nearby Indian Creek Village. (AP Photo/Marta Lavandier)

The town has seen the construction of numerous new condos in recent years, where large oceanfront units exceeding 3,000 square feet (280 square meters) with modern amenities can fetch $10 million and up. Meanwhile, small units of 800 square feet (75 square meters) in neighboring condo buildings constructed decades ago can be had for $400,000.

Ana Bozovic, a South Florida real estate broker, said the June 24 collapse of the 40-year-old, middle-class Champlain Towers South will exacerbate this division. At least 36 people were killed and more than 100 remain missing.

Bozovic said many buyers will now avoid older buildings, not just because they fear they might also fall but because of repair costs the Champlain South owners faced before the collapse: $80,000 to $300,000 per unit. These factors will decrease older condos’ value, while prices in luxury buildings will continue to skyrocket.

“The holders of capital who are moving here were never considering older buildings. They are buying newer structures and preconstruction, so I don’t see this putting a damper on their appetites,” said Bozovic, founder of Analytics Miami. “What this will do is further depress sales of older structures and further bifurcate the market.”

Before the Champlain Towers South tragedy, Surfside, with about 6,000 residents on a half-square mile (1.3 square kilometers) of an island off Miami, was one of South Florida’s most anonymous municipalities — though in January Ivanka Trump and Jared Kushner rented a luxury condo in a new building two blocks from the collapse.

The town is known for its clean beaches and a 12-story limit on its buildings, and stands in contrast with neighboring Miami Beach and its world-famous nightlife, Bal Harbour with its high-end shopping and both with buildings that are double and triple the height of Surfside’s tallest.

Mayor Charles Burkett said the town has experienced a “roller coaster” of emotions since the collapse. Demolition of the remaining portion of the structure and Tropical Storm Elsa, which brought strong winds and heavy rains to the area, have intensified what the community is going through.

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“We have faced innumerable challenges, but the little good news is the resources we have are all aligned, all focused and pulling in the same direction,” he said.

Ryan Mermer moved to Surfside earlier this year from Palm Beach County, drawn by the quiet, the town’s proximity to Miami’s thriving business climate and its large Orthodox Jewish community. On Saturdays, much of the town closes for the Sabbath except for the chain stores. Surfside was home to Isaac Bashevis Singer, a Yiddish poet and short-story writer who won the 1978 Nobel Prize in Literature.

But Mermer also got a deal on a small apartment built a half-century ago, just steps away from the luxury condo that former President Donald Trump’s daughter and son-in-law moved into. While Mermer’s building was constructed for the middle class, today’s construction is aimed at the New York, European and South American elite, who are drawn by the state’s lifestyle, weather and lack of an income tax.

“I pay $1,375 (a month) … across the street from the beach; Ivanka and Jared pay $38,000,” said Mermer, a real estate agent who also works for Holocaust Heroes Worldwide, a support group for survivors of the Nazi death camps.

In Surfside’s low-key shopping district one recent afternoon, barber Aramis Armor and Freddy Elias, the co-owner of a tailor and dry cleaning shop, had no customers. The pandemic hit their businesses hard, both said, and the collapse and the resulting street closures made it difficult for anyone to reach them.

Amor says that in normal times, the business district is full of families — they can have an ice cream, eat pizza or drink a coffee in the many locally owned businesses that dot the downtown.

“They are all very nice, the clients are very good,” Armor said. He blamed city officials for his lack of business, saying they should never have let the collapsed building decay like it did.

Elias, who has owned Surfside businesses for 25 years, is hoping a federal low-interest loan promised by President Joe Biden’s administration to stores affected by the collapse will tide him over until his customers return. Meanwhile, a partner was headed to a customer’s home for a fitting rather than make the client fight traffic to get to the store.

“Since COVID and now this tragedy, it has been very, very bad for us,” Elias said. “We need help.”

The streets reopened this week.

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Musk under fire again: CEO to testify over Tesla acquisition

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In the runup to Tesla Inc.’s 2016 acquisition of a company called SolarCity, Elon Musk hailed the deal as a “no brainer” — a purchase that would combine the leading maker of electric vehicles with a manufacturer of solar panels that can recharge EVs.

It didn’t exactly work out that way.

On Monday in the Delaware Court of Chancery, the Tesla CEO will testify about the $2.5 billion deal in a shareholder lawsuit that alleges that Tesla’s acquisition was rife with conflicts of interest, overlooked SolarCity’s fundamental weaknesses and unsurprisingly failed to produce the profits Musk had promised.

Questioned under oath, Musk plans to defend the purchase as a justifiable acquisition.

At the time of the all-stock purchase, Musk was SolarCity’s largest stakeholder and its chairman. Seven shareholder lawsuits, consolidated into one, alleged that Tesla directors breached their fiduciary duties in bowing to Musk’s wishes and agreeing to buy the struggling company. In what the plaintiffs call a clear conflict of interest, SolarCity had been founded by Musk and two of his cousins, Lyndon and Peter Rive.

Last August, a judge approved a $60 million settlement that resolved claims made against all the directors on Tesla’s board except Musk without any admission of fault. That left Musk, who refused to settle, as the sole remaining defendant. The trial that begins Monday had been scheduled for March of last year but was postponed because of the viral pandemic.

Daniel Ives, an analyst at Wedbush Securities, called the acquisition a “clear black eye” for Musk and Tesla, in large part because SolarCity has failed to turn a profit.

“It basically was putting good money after bad,” Ives said. “For all the successes and all of the unimaginable heights Musk has achieved, this is one of the lowlights.”

Most investors, Ives said, place no value on the company’s solar business.

“I just think Musk and Tesla underestimated the challenges and the hurdles that the business brings,” he said.

That said, Ives said he thought Tesla’s energy business could still become “modestly successful.”

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Tesla, which has disbanded its media relations department, did not answer a message Friday seeking comment about the lawsuit. In its 2020 annual report, the company argued that the lawsuit was without merit and that Tesla would vigorously defend itself.

“We are unable to estimate the possible loss or range of loss, if any, associated with these claims,” the company report said.

Tesla’s energy generation and storage business generated $1.9 billion in revenue last year — 24% more than it did the previous year. Much of that revenue came from selling battery storage units. Tesla doesn’t specify whether the business made a profit, and it also has debt and expenses.

The lawsuit filed by the plaintiffs contends that Musk drove the decision to acquire SolarCity despite his clear-cut conflict of interest.

Musk has a history of fighting government agencies and lawsuits. He was forced to pay a $20 million fine to the Securities and Exchange Commission for making statements on Twitter about having the money to take the company private when he didn’t. But he won a defamation lawsuit that was filed by a British diver involved in the rescue of a Thai soccer team that was trapped in a flooded cave. Musk had called the man “pedo guy” on Twitter.

Even if the trial ends with Musk having to pay personally for the whole SolarCity deal, $2.5 billion won’t much hurt the world’s third-wealthiest person. Forbes magazine has estimated that Musk is worth roughly $163 billion.

Ives suggested that while any such payment wouldn’t seriously affect Musk’s wealth, it would damage his reputation for choosing acquisitions.

Musk is fighting the lawsuit after others have settled “because that’s what Musk does,” Ives said. “I think Elon believes this was the right deal and still does.”

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