MDHA to appeal ruling in eminent domain case over Music City ...Center
The legal battle between MDHA and Tower
Investments is now headed to the Court of Appeals with the convention center
budget hanging in the balance.
Jan 14, 2011 The Tennessean
Tower Investments said it will be joined by a
Washington D.C.-based nonprofit group, the Institute for Justice, which
regularly supports property owners whose land is taken by the government
through eminent domain.
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After nearly three years in a legal tug-of-war concerning the fair price of
a piece of property for the new convention center, the Metro Development and
Housing Agency has elected to take its case to the Tennessee Court of Appeals.
The decision by MDHA sets the stage for an even messier legal battle. At
stake is whether the high profile convention hall project will stay under its
$585 million budget.
The development company, whose land was condemned and taken by MDHA in order to build the new convention center, said on Friday
that it now plans to argue the city never had the right to take its property in
the first place.
Tower Investments
said it will be joined by a Washington D.C.-based nonprofit group, the Institute
for Justice, which regularly supports property owners whose land is taken by
the government through eminent domain.
A Nashville
judge last month upheld a jury ruling that said MDHA vastly undervalued a piece
of property owned by Tower Investments. MDHA, which was in charge of acquiring
land for the Music City Center project, said the land was worth $14.8 million.
But a jury said the fair value was $30.4 million.
The jury’s ruling busted MDHA’s budget for land
acquisition and put the budget for the entire project in serious jeopardy. Most
of the project’s miniscule $15 million reserve would be nearly entirely sapped
if the jury’s verdict is upheld.
MDHA Director Phil Ryan said an appeal was necessary because of “serious
legal errors leading to the jury’s erroneous verdict.” But such an appeal,
which figures to take months, comes with a great risk. State law requires
interest to be applied to the difference between MDHA’s
original offer and the jury’s award.
As of earlier this week, that amounted to approximately $670,000, a figure
that would continue to grow should MDHA lose its appeal. The accumulating
interest muddies the exact impact on the convention center budget.
Without interest factored in, the contingency fund stands at $2.4 million
in light of the jury verdict. MDHA still has two other property owners
contesting the fair value of their properties as well.
MDHA already lost one attempt to vacate the jury’s award when Circuit Court
Judge Joe Binkley ruled in December that he approved the verdict. MDHA pointed
out that earlier in the legal wrangling a panel of experts valued the property
at $16.1 million.
“As is typical in a case of this magnitude, the judgment should and will be
reviewed by the appellate courts,” Ryan said. “If the verdict is reversed, no
interest will be due.”
Tower contends MDHA wrongly condemned its land in 2009. The city’s
legislative body didn’t approve financing
for the project until 2010.
“This would mean that Metro has moved forward with the construction of the
convention center on our property with the potential risk of losing the
property back to Tower as the rightful property owner,” the company said in a
prepared statement.
Contact Nate
Rau at 615-259-8094 or nrau@tennessean.com.
Follow him on Twitter @tnnaterau.
http://www.tennessean.com/article/20120114/NEWS0202/301130099/MDHA-appeal-ruling-eminent-domain-case-?odyssey=nav%7Chead