The developer behind a more than $100 million development planned near Northern Kentucky University has filed a complaint for damages against the school and others saying their interference scuttled the long-planned project in the community.
Cleveland’s Fairmount Properties filed the complaint Tuesday in Kentucky’s Franklin Circuit Court. The filing names NKU; its president, Ashish Vaidya; and the city of Highland Heights as defendants.
Fairmount is seeking monetary damages – in excess of $6 million – for breach of contract and monetary damages incurred in its multiyear effort to build a commercial and residential development at NKU’s main entrance known as Northern Pointe.
NKU, in a statement submitted to the Business Courier, said it was disappointed by Fairmount’s filing.
The university has been interested in seeing the property at the intersection of Nunn Drive and U.S. 27 developed as far back as 2005-2006, when NKU first made requests for proposals to developers.
“It is disappointing that Fairmount would rather file a lawsuit over this project than actually complete it,” the university said. “Instead of building the vibrant development it promised, and years after it was selected, Fairmount has left NKU with nothing but costs, delays and a vacant site. Fairmount’s allegations are false, and NKU will vigorously advance its interests in this litigation.”
The project aimed to transform a key site, located at NKU’s “front door.” In concept, it included retail, residential, a hotel and public parking in addition to greenspace and other amenities.
Adam Fishman, principal of Fairmount Properties, said Fairmount completed Phase 1, a $30 million medical office building for St. Elizabeth Healthcare, on time and on budget. Construction started in 2018 and St. Elizabeth moved into the facility in 2020.
Two other phases were planned.
Fishman said “numerous impediments” created by NKU and other public officials have caused costly delays and obstructions.
NKU, he said, “abruptly pulled the plug on the project” earlier this year.
“We have been good partners, we have done everything required of us in the lease agreement, and we have been repeatedly obstructed in moving this development forward,” Fishman said in a release. “We are moving forward to protect our rights under the lease agreement and be made whole financially for costs incurred while this project was thwarted by NKU, Dr. Vaidya and the city of Highland Heights.”
NKU in 2016 selected Fairmount Properties to develop Northern Pointe over three other submitted proposals, including one from a team led by former Cincinnati Bengals defensive-back-turned-commercial-real-estate-developer Chinedum Ndukwe.
It was the third time the university sent out a request for proposals for the property. In 2006, the NKU Foundation said it was planning to develop the site. In May 2013, the university issued a request for information for the project to developers.
Fairmount said in October 2021, NKU, “facing pressure from Highland Heights and Campbell County, soured on the project.” Highland Heights expressed “significant concerns” about certain aspects of the design, including the planned location of a parking garage. Campbell County, per the complaint, had also expressed concerns to NKU about the project design and the delay of the planned hotel, which Fairmount said was not feasible. The Covid-19 pandemic has had a “devastating” impact on the hospitality industry.
The requests “were extensive, triggered discussions lasting several months, and led to two ground lease amendments,” Fairmount said. With approval from the local governments secured and financing available, Fairmount said it was ready to start work on Phase 2 in February 2022 but needed a third amendment to the ground lease “because of the delay in commencing work” related to those talks.
NKU, per the complaint, would not sign the third amendment. The complaint said NKU offered no proposed changes and refused to engage in any further negotiations. The city and county also sent similar letters saying they would not extend the term of $80 million in previously approved industrial revenue bonds from 30 to 40 years, “as we don’t believe it is in the public’s best interest to do so,” Highland Heights Mayor Gregory Meyers said.
“NKU asked Fairmount to work with the city and county – who were not parties to the lease agreement and were adding layers of costly delays, additional design work and unrealistic expectations for the hotel which was not feasible in the middle of the pandemic,” Fishman said in the release. “We tried to be cooperative and incurred significant costs.
“Given Fairmount’s substantial progress with all aspects of the project, we were surprised that NKU abruptly pulled the plug on the project,” he said.
No court date has been set.
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