Developer Larry Wireman is suing the city of Orange Beach over inducements in land and cash he says the city illegally required him to pay in order to build the iconic Turquoise Place towers. He contends the city has not abided by deed requirements on its use of the parcels or spending the cash he was required to pay.
The suit was filed on Jan. 4 in the U.S District Court, Alabama Southern District and seeks to retake two parcels of property, one on the beach and one on Cotton Bayou, as well as $400,000 the city collected in “development fees.”
Additionally, Wireman filed another lawsuit against three companies over fees he contends were excessive in the financing of another development, Caribe located at Perdido Pass in Orange Beach. One of the defendants in that suit, SE Property Holdings, is also the lead plaintiff in the 12-year-old Bama Bayou lawsuit.
One of the tracts Wireman was required to surrender to the city is a 90-foot wide strip on the west side of the condo towers and was to be specifically used for city “pedestrian and vehicular access to the Gulf of Mexico, the adjacent public beach and adjacent properties for beach maintenance and for police, fire and emergency purposes, and use by the public for pedestrian access between Alabama Highway No 182 and the Gulf of Mexico,” the lawsuit states.
It goes on to say that the deed requires the tract automatically revert to Turquoise Properties if it is not used for those specific purposes. Wireman’s lawsuit says neither he nor the company ever agreed to alternate uses for the property.
Across the street from the towers, the city required Wireman to give up five acres which has remained undeveloped since its conveyance in April 2010. As with the Gulf-front tract, the deed contains a clause that would cause the property to revert back to Turquoise Properties if not used for specific uses written into the conveyance deed. It required the city to build recreational facilities as well as a fire, police or other public safety building on the property.
The $400,000 collected for the development fee was supposed to fund these improvements and also pay for a fishing pier in Cotton Bayou. Today the undeveloped lot is used for overflow parking for the condos.
“The development fee has not been used to pay for an unmanned fire station, dune walkover, handicap parking spaces, barbecue grills, public restrooms and a fishing pier,” the lawsuit states.
Wireman and the plaintiffs also seek an unspecified amount of money for “actual damages related to the defendant’s use and enjoyment of the Gulf Tract and Cotton Bayou Tract.”
Another contention of the lawsuit is that Turquoise Properties was required by the city to include additional amenities in the project that other developers weren’t.
“Plaintiffs also had to complete certain cleaning and restoration projects, and develop their condominium project with greater landscaped areas greater setbacks than typically required for similar projects in Orange Beach,” the lawsuit states.
Wireman’s other federal filing against Park National, SE Property Holdings and Southeast Property Solutions, says the three Ohio-based entities overcharged Wireman by more than $1 million on about $20 million worth of financing to develop the Caribe complex. Today it has three 14-story towers on the site and in June, Wireman gained approval to add two more to the development. The Dec. 12 filing moved the lawsuit from Baldwin County Judicial Circuit to the federal court in Mobile.
Wireman’s suit alleges the companies did not disclose how much the extra charges were until after payments were made. It says $5 million of what was paid back were interest and lawyer fees.
“Not until the Plaintiff made payment in amounts sufficient to satisfy its obligations to defendants did the defendants fabricate and demand a percentage collection fee,” the lawsuit states.
Wireman contends he overpaid by just under $1 million and is seeking a total of $1.9 million.
“At this point, with no forewarning of its intent, defendant, with threats of assessing default interest against plaintiff, extracted an additional $955,549.77 from the plaintiff in violation of the loan agreements,” the lawsuit states.
Fearing financial retribution if the fees weren’t paid, Wireman and his company paid the fees and filed suit to recover what they consider illegal charges.
“Plaintiffs accepted and fulfilled their obligations under the various loan agreements entered into by them and the defendants,” the lawsuit states. “Defendants breached that agreement by seeking and accepting monies not owed to the defendant and which the defendant was not entitled to collect.”
Neither defendant has responded to the lawsuits, and Orange Beach Mayor Tony Kennon told NBC15 the city doesn’t comment on pending litigation. This story will be updated as it develops.
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