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The ongoing litigation over the Pinnacle Pointe development sparked a passionate debate last week amongst Harriman councilmen and city attorney Harold Balcom.
Councilman J.D. Sampson had put discussion about the litigation on last week’s City Council agenda with the intention of making a motion to approach developers Steve Kirkham and Jerry Duncan about mutually dropping their lawsuits.
Sampson withdrew the motion after discussions.
Both the city and developers have sued one another in light of a 2007 state audit that found the city should be reimbursed $234,685 for public funds spent on private development.
Balcom said engineering data would show the city should be owed around $2 million.
The developers sued first, asking for more than $1 million that included payment for land under the streets the city paved in the development as part of the agreement.
Sampson said he’s heard the developers would drop their lawsuit if the city would drop theirs.
“If you remember back when this started, after they got the construction stuff done, up come Lowe’s, then Kroger’s came in and Gondolier’s, the credit union, UPS. It looked like things were really going to go good,” Sampson said.
“Then the lawsuit came in, and everything fell flat.”
Sampson said he believes it would be best to for both parties to step away from the litigation and concentrate on developing Midtown.
“I myself would like to see clothing stores, shoe stores, just different things come in so people don’t have to go to Walmart, and they don’t have to go to Turkey Creek,” Sampson said. “They can stay home.”
Sampson said he doesn’t know how the state comptroller would react or even if he would be involved.
“This was not a grant so the state didn’t have nothing invested in it,” he said.
“This was totally the city of Harriman invested. I feel like if we want to drop it, then it is up to us to drop it.”
Balcom disagreed. He said contacting anyone without the lawyers involved would not be appropriate.
“You only really have a couple of real opportunities here, Mr Sampson,” Balcom said. “One is mediation through a lawful channel, which is what we are attempting to do. The other is if you guys just want to go over there and talk to them.
“I don’t know if you can do that without your lawyers present, that is the first thing. So as soon as you do that, you are putting yourself right back at mediation,” Balcom said.
Balcom said he was ready to approach the parties about mediation, having recently completed depositions in the lawsuit. He said all parties have agreed to that.
He added that the roadway dispute was a losing battle for the developers.
“They can’t win that, and they know they can’t win that,” Balcom told council members last week.
Governments can only legally invest money in public works on projects, not on private development itself.
Balcom has said that paving the roadways was the city’s way of taking ownership.
“Our engineering data shows they owe us approximately $2 million,” Balcom said. “You can negotiate that down to whatever you want to negotiate it down to. You give us the Brownfield. You give us the wetland mitigation. You give us the detention pond. You give us all the things that we paid for, because I have documents which back up the fact that they represented that we would be given ownership of those things,” Balcom said.
“And you can negotiate that in the mediation, and you may or may not come out with a dollar value.
“But if you just drop the lawsuit, then the taxpayers of this town have just spent whatever they spent — and I don’t know what the cost of deposition are total, we can look that up, whatever they spent on me — to collect absolutely nothing when you have engineering data that clearly says there is money owed to the city of Harriman, in a substantial amount.”
Balcom said the best way to deal with it is through mediation or litigation.
Sampson said the city is making money in Midtown because of the development.
Balcom said he’s heard that argument before, but it doesn’t mean the city didn’t spend money they should not have.
The city borrowed money for the project, and loans still being paid off.
“But the purpose of borrowing money was not to spend money that should have not been spent,” Balcom said.
Councilman Kenyon Mee doesn’t like spending an unknown amount on litigation and the risk the city would come away with nothing.
He questioned again how much had been spent so far, and Balcom said he didn’t have that figure, but that Mee could get that from city hall.
“Why is it such an issue to find out how much money we’ve spent on this mess? I have formally asked numerous times to know how much money we dropped into this,” Mee said.
“I think people are going to look at it, ‘Sampson wants to give up $2 million’ That’s if we win,” Sampson said.
Balcom said he’d never promise victory in any legal matter, but he is confident.
“Nobody guarantees anything in this profession,” said Balcom. “Most people don’t look at litigation that way. You’re welcome to.”
Balcom said the figure he believes the city is owed far exceeds any amount the city would spend on the litigation.
Sampson pointed out the city’s lost litigation over an annexation issue between Kingston.
Kingston’s annexation by referendum was found legal on appeal, although Harriman contended their efforts to annex the area occurred first.
Balcom, however, said the appeals court looked at changes in state law, not the law that was in place at the time of annexation, when deciding in favor of Kingston.
He also told council that the Pinnacle Pointe developers in meetings with himself and Treasurer Charles Kerley indicated they would outspend the city on litigation.
Balcom said they were trying to wear the city down by such tactics.