Pinnacle Pointe developers sue Harriman

By CINDY SIMPSON

csimpson@roanecounty.com

Prestige Land Co., the limited liability company responsible for the development at Pinnacle Pointe, has filed the first complaint in the ongoing dispute between the developers and the city of Harriman over who owes whom.

In the complaint, filed Friday in Roane County Chancery Court, Prestige developers make various claims and are requesting an award not to exceed $1.9 million.

“We would not have filed our complaint if we didn’t feel we were in the right,” said Knoxville attorney Jim Scott. He represents Prestige, including developers Jerry Duncan and Steve Kirkham.

Scott said he couldn’t discuss the mediation because it was supposed to be confidential. He did say, however, that he and his clients had a different impression than what Harriman city attorney Harold Balcom said was given recently.

Harriman officials first began looking into the development after a state audit indicated the city was owed $234,685 for money spent on private development.

Balcom said last week the city could have spent between $1.7 million and $2.2 million of public monies on private enterprise, based on an engineering study of the site.

According to the complaint, the state did not know Prestige had made a number of payments to the city for infrastructure when making its findings.

Prestige Land Co. stipulates in the complaint that it paid $519,175 directly to Harriman for the project and the company contributed “hundreds and thousands of additional dollars for infrastructure after Mullins Excavating left being unable to do the grading and earthwork from 2004 through March 2006.

“The payments were made by Prestige to various subcontractors for infrastructure totaled $587,965.01 that also benefited the project and the city of Harriman,” the complaint continues.

Prestige’s complaint states that based on an independent  agreement officially completed around January, the city had paid $2.726 million on the project toward infrastructure “because certain payments in addition to the $587,965.01 was not considered nor credited to Prestige as an overpayment on infrastructure.”

Based on that, the city actually owes Prestige $273,966.73, the complaint continues.

The company said in the suit it is paying an estimated $100,000 for environmental monitoring of the site, which was to be the responsibility of the city.

The company also accuses the city of breach of contract. The suit claims the city has not paid or credited Prestige for the land acquired by the city at an estimated value of $1.5 million.

Harriman City Council minutes indicate the city was to provide reasonable value and credit for the value of the property or compensation.

The complaint also alleges that Harriman

City Treasurer Charles

Kerley approached company representatives about paying money the state claimed was owed now and having the city make it up to the company on  “another deal on the back end, or otherwise it could get worse.”

The complaint states that the representatives said they would look into whether they were indeed supposed to pay it and that this “visibly upset and angered Mr. Kerley.”

Kerley said Friday this was in reference to a meeting  between the parties before the engineering study.

He said he told the developers the money would be returned to the capital projects account and could be used on infrastructure at other projects that the developers may want to do in the Midtown area.

“Anything like that would require council approval,” Kerley said.

“We weren’t going to pay them on the back end,” he continued. “I don’t know what that means.”

He also denied being visibly upset.