A lawsuit filed against the group seeking to redevelop the Berkman Plaza II property in Downtown Jacksonville was dismissed last month in the 4th Judicial Circuit Court.
The complaint was filed by Cambridge Capital Group LLC, A&T Development Company LLC and Tallahassee attorney Tim Howard in July against developer Bob Ohde and his 500 East Bay Street LLC entity, along with Choate Construction Co. and MVJFL LLC.
Cambridge Capital Group and Howard sought $1.1 million in damages tied to a previous agreement between those parties and Ohde’s group.
Circuit Judge Virginia Norton dismissed the case with prejudice Dec. 20 after the sides came to a mediated agreement, the terms of which were not available.
Ohde declined to comment on the agreement, saying his team was working on an official statement.
The complaint claimed Ohde and his development group were in breach of contract, participated in unfair and deceptive trade practices, benefited from unjust enrichment and failed to pay the plaintiffs $1.1 million for funds they invested.
Howard is a former business partner of Ohde who at one point was involved in the redevelopment project along East Bay Street. Howard was listed as the sole investor and majority owner’s representative of A&T Development Group.
Ohde wants to redevelop the property into a $130 million hotel, resort and family entertainment center. A partially built condominium building remains after construction on the project stopped in 2008.
City Council is expected to review an economic development agreement that could result in $36.5 million in city-backed financial incentives for redevelopment.
The Downtown Investment Authority approved the deal in September.
The lawsuit is one reason the deal hasn’t moved forward to council members, according to DIA interim CEO Brian Hughes.
“There were clouds that needed to clear and now they’re cleared,” he said.
Hughes said the city’s Office of General Counsel was confident “the things that were being claimed weren’t going to be an impediment to the process” by Ohde and his group to develop the property.
“But that’s easy for us to say. Investment communities see lawsuits as potentially detrimental,” Hughes said.
Ohde said Wednesday that deal is still on.
Howard claimed in the suit that he initially invested $700,000 into the project for appraisals, engineering, legal work, consulting and other site work ahead of a planned deal with Choate Construction.
According to the complaint Choate agreed to sell the 2-acre site to Cambridge Capital Group in May 2017 for $5.5 million. That deal fell through and A&T Development later was assigned to complete the transition.
According to property records, 500 East Bay LLC purchased the site in July 2018 from Choate for $4.75 million.
The suit claimed that Choate, Ohde and 500 East Bay LLC unfairly profited from the $700,000 price reduction, plus all the engineering, appraisal and due diligence performed by Cambridge and A&T Development.
Howard also alleged that Ohde agreed, through an email, to pay Howard an additional $400,000 so the sides could part ways.
It is unclear what settlement was reached.
Atlanta-based Choate secured the property in 2014 through a settlement agreement from a previous lawsuit against the building’s former owners.
Choate was the Berkman Plaza II project’s general contractor before work stopped.
The project was scrapped after an attached parking garage collapsed, killing a construction worker and injuring several others.
Choate tried unsuccessfully to market the property for development before engaging Cambridge, and eventually, Ohde.
The DIA approved an economic development agreement between the city and Ohde’s company in September.
The package includes a $20 million Recapture Enhanced Value Grant – a 75 percent refund on new ad valorem taxes generated by the project to be paid over 20 years.
The grant will be reduced to $15 million if the capital investment does not exceed $92 million and is not completed within 60 months after the redevelopment agreement is signed.
Ohde’s group also wants an $8.2 million Operational Performance Subsidy, a contractual payment based on the success of the hotel portion of the development. Those payments would represent 5 percent of the lodging revenues over 15 years.
Because of the project’s size, the city also will convey about 2.8 acres of neighboring property, worth $1.635 million.
To provide parking, the city plans to provide a grant worth up to $3.5 million to ensure 200 spaces in a new parking garage are set aside for public use.
Finally, the developers would receive a $3.25 million Redevelopment Completion Grant to offset costs of the hotel and family entertainment facility after the facilities is granted a certificate of occupancy.
Legislation approving the agreement could be introduced to council this spring.