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Lawsuit may delay Midtown project

POSTED: January 29, 2009 12:38 a.m.
/For The Times

An artist's rendering of the proposed Midtown project.

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Plans for a major hotel and office development in Gainesville’s Midtown district were close to a reality until a lawsuit over access to a bank building adjacent to the property stymied progress last week.

The city’s planning department is "very close" to issuing a land disturbance permit for the first phase of construction of the Midtown development, Gainesville’s Planning Director Rusty Ligon said. The site will eventually include two office towers and a high-rise hotel.

Once the permit is issued, developers for Gainesville City Center LLC, Lee Caswell and Wendell Starke, have one year to begin construction on a 125,000-square-foot, nine-story office building and a three-story parking deck with 376 spaces.

Caswell has said he hoped to start on Phase I early this year, but the lawsuit over access to the Regions Operations Center could slow the project.

Last week, Regions Financial Corp. filed suit against Gainesville City Center, claiming developers violated a 24-year-old easement agreement allowing bank access from the former Town View Plaza parking lot on Bradford Street.

The agreement called for perpetual access to the bank from Bradford Street that would stay with the property despite any changes in ownership. The Oct. 18, 1984, agreement also states that the easement "to the paved parking areas shall expire 10 years from the date hereof."

Acting on the assumed expired agreement, Gainesville City Center recently erected a fence between the Regions property and its planned five-acre development.

"There is no easement," Starke said.

Steve Gilliam, Regions’ attorney in the suit, said the 10-year expiration date on the easement does not apply to driveways leading to the property. He said Gainesville City Center broke the agreement when it blocked the bank building’s two Bradford Street driveways with a fence.

"The driveway easements do not expire, so it’s that simple," Gilliam said.

Starke contends the impetus for the lawsuit is a contract by City View Investments LLC — a corporation with links to two local public figures — to purchase the Regions property. The interested buyers want to ensure access to the bank property from Bradford Street before closing, he said.

City View Investments LLC was registered with the Georgia Secretary of State on Oct. 27 by Tread Syfan, attorney for the Gainesville-Hall County Redevelopment Authority. The corporation’s address is the mailing address for Hall County Commission Chairman Tom Oliver’s South Hall egg business.

Dan Summer, chairman of the authority, said Gainesville City Manager Kip Padgett told him last week that Syfan has plans to buy the bank property. The authority will meet Friday morning to determine if Syfan’s involvement is a conflict of interest.

Last year, the authority sold the city’s public safety facility to Starke and Caswell as a key part of the redevelopment of Gainesville’s Midtown. Syfan drew up the paperwork for that sale in his role as attorney for the authority.

Summer said he would not discuss the issue until after Friday’s meeting.

"I don’t know all the facts, but I will say I give everybody the benefit of the doubt," Summer said. "I’m just going to keep an open mind."

Syfan would not discuss his intentions for the bank property, stating that legal counsel had advised him not to discuss the matter.

"I’m not even confirming I’m involved," Syfan said.

When asked why he would be advised not to discuss the Region’s lawsuit if he was not involved, Syfan replied "good question" and refused to comment further.

Oliver did not return multiple phone messages from The Times seeking comment.

Whether the bank property is sold is not relevant to the easement lawsuit, Gilliam said, because Regions still could be interested in using the property.

"If the contract (to sell the property) doesn’t go through, Regions still owns the property," Gilliam said.

The easement conflict dates back to November, when the bank’s attorneys in Birmingham, Ala., and Atlanta first claimed the developers were violating the terms of the easement, Gilliam said.

Gilliam came on board in mid-December, when Regions’ attorneys asked for help with the negotiations, he said.

"I talked to (Gainesville City Center’s attorney, Julius Hulsey), and we tried to get a resolution and just couldn’t get a resolution and they put the fence up and so we had to take action," Gilliam said.

Starke, however, said there were no negotiations.

"I’m not sure what they’re talking about about negotiations," Starke said. "They never offered anything other than a demand that they have access across the development that has already been designed and engineered to a large extent."

Gilliam said he and Hulsey are still in talks to come to a resolution of the easement dispute.

"If we can’t reach a resolution then we’ll let the judge decide," Gilliam said.

If Regions wins the lawsuit, Starke and Caswell could be forced to redesign the hotel and office development to allow access to the property where the bank’s operations center now stands.

The developers already have spent upwards of $1 million on the current design, Starke said.

Padgett said the delay is a disappointment to the city, which has looked forward to the development and even promised to reimburse developers for a pedestrian bridge connecting to the Georgia Mountains Center.

In previous City Council work sessions, Padgett has called plans for the high-rise development an anchor of Midtown redevelopment.

"We’re certainly disappointed that it’s gotten like this, because it’s a big thing for Midtown what City View Center is planning to do. It’s a big shot in the arm for Midtown," Padgett said.



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