A tangled web created by two lawsuits dominated discussions Friday morning at the Community Revitalization Enhancement District (CReED) Board meeting.
Lester Lee, the former property owner of the Thomson building and 64 acres in South Marion, is suing the Grant County Economic Growth Council for $13 million.
City attorney Tom Hunt said the lawsuit stems from a letter the Growth Council sent to Lee last summer telling him he violated terms of his lease. Tim Eckerle, Grant County Economic Growth Council executive director, said Lee promised to deliver an Internet service provider and repackaging company within 90 days of signing the lease. That promise dates back nearly two years and has yet to come to fruition.
Lee denied that he violated any terms of the contract and said of the lawsuit, "I have no hard feelings toward the Growth Council and mayor or anything. It's a business transaction."
In another case pending in Superior Court 1, Bunn Inc., a Fort Wayne contractor, filed a $150,000 lawsuit against Lee and Café Valley, the Arizona-based baked goods company, for an unpaid construction demolition.
"It is a confused mess no doubt about it," Lee said. "The city's confused about it. I'm confused about it and Bunn's confused about it. We need to sit down in the next two or three weeks or so and hash it out."
Like Lee, the Growth Council is involved in both cases.
When Café Valley decided to move into the property previously owned by Lee, the city transferred ownership to the Growth Council, a nonprofit entity, through a bond package to prevent another potential suitor from buying the land. The Growth Council acts as a conduit and as a property owner is on the hook for paying legal fees in the Bunn vs. Lee/Café Valley lawsuit.
Friday morning, Hunt requested the CReED Board dip into its approximate $1,400,000 budget and cover $26,978 in legal fees for the Growth Council. Sales and income tax paid by companies in the CReED districts account for the funds in its budget.
"At the end of the day, we — being the city — are responsible for the cost that the Growth Council incurs," said Hunt, at the CReED meeting held in the Mayor's Conference Room of the Municipal Building," and the reason is the city signed a Hold-Harmless Indemnity Agreement when we asked the Growth Council to enter into this agreement to do the bonding."
The CReED board members agreed with Hunt and approved payment, but only after a lengthy discussion about Lee and the possibility of future legal expenses.
Hunt said the court ordered mediation that will in all probability take place this summer unless an agreement is reached first.
"Lester's probably never going to agree to anything, which is fine, but Jerry (Holderead) and I have worked out what I consider to be a tantalizing proposal to settle this with Bunn and Café Valley," Hunt said to the board. "My hope is not that we settle this with Lester, but we settle with Café Valley and Bunn so they let us out of this."
Board members questioned the potential expense, if the case goes to trial. Hunt cautioned the trial would probably last three or four days and cost six figures.
One board member asked, "It'll cost more than 150K?"
Hunt nodded and said, "Oh yeah, it will."
CReED only approved paying the $26,978. Board members agreed to consider possibly paying future legal fees as they occur.