As promised MDHA appeals Tower verdict — more taxpayer money at risk

By TNWatchdog Staff on January 13, 2012
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By CHRISTOPHER BUTLER

Nashville taxpayers must brace themselves.

City officials are about to risk even more taxpayer money in a lawsuit that has already proven costly for the city, as well as a private real estate firm.

Officials with Nashville’s Metropolitan Development and Housing Agency (MDHA) officially confirmed this week that they will appeal a jury’s decision last summer to award Tower Investments a compensatory sum of $30.3 million. As Tennessee Watchdog reported last September, MDHA officials used eminent domain to acquire Tower’s downtown property. MDHA offered Tower a sum of $14.8 million for the land, where construction began on a new $500 million Nashville Convention Center.

Tower officials, however, claimed the amount was below fair market value and not enough compensation for the loss of five and a half acres in one of Nashville’s most desirable real estate properties. Tower sued, and a jury ruled last summer against MDHA, giving the company the compensatory sum that was twice the original offer.

MDHA officials had until this week to appeal the jury’s verdict.

As Tower officials promised, if MDHA appealed the matter, Tower officials would then appeal MDHA’s authority to take the property in the first place.

‘This is not a threat,” Tower Vice President John Pierce told Tennessee Watchdog last fall.

“If we are successful on the right to take issue, then it will reverse possession of the property, when they’ve already got a $500 million convention center built on the property.”

If Tower’s counter-appeal is successful, and courts rule that MDHA did not have the power the take the property in the first place, then the amount MDHA owes Tower could increase exponentially.

MDHA spokesperson Terri Woodmore said in a statement that the jury made serious legal errors justifying their verdict.

“Tower owned the property for less than three years and made no improvements to it. It is simply not rational to conclude that the property more than doubled in value under these circumstances, during a recession.”

State law allows interest to grow when it comes to the difference between the original $14.8 million offered and the compensatory sum that the jury later awarded Tower.

Thus far, the amount of interest that has grown is reportedly $670,000.

Pierce, meanwhile, said he expects the appeals courts to uphold the jury’s original verdict.

“We don’t feel like there is any legal basis for the (MDHA) appeal.”

Woodmore would only take questions via e-mail.

In the e-mail, Tennessee Watchdog asked her about the risk to taxpayers should MDHA’s lawsuit prove unsuccessful. Woodmore, however, did not respond before the end of the workday on Friday.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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Posted under Government Regulation, Government Waste, Metro Nashville Government, Misuse of funds, News.

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