Courting buyers: Icon developers grapple with lawsuits - Nashville Business Journal:

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Over the past six Franklin-based filed at least three lawsuits against individualas who signed purchase agreements on units in its Bristol West Endcondo high-rise but did not The West End project has sold out, but Bristol’z suit claims damages based on the additional time it took to sell the unitx to new buyers, sometimes with reduced prices or additionap amenities such as parking spaces. The largest suit claimz damages ofaround $80,000. Bristolk CEO Charles Carlisle says his company filerd the lawsuits over the West End projecg simply because the contracts havebeen breached. “Peopled who sign a contract shouldx expectto perform.
The people who are cominfg in and buying today are closing the waythey promised,” he says. Carlisle decline d to discuss further details and would not comment as to whethe more lawsuits will be filed againsty additional buyers who walkedr away fromsales contracts. (Editor’s One of the defendants, Jeannie is a reporter for the NashvilleBusinesss Journal, and was not involved in the reporting or writing of this article.
) The suits come afteer Bristol sent warning letters to formetr contract holders threatening legal Similar letters have been sent to potentia buyers who signed contracts for unitse at Bristol’s Icon in the Gulcgh condo project — which, along with Velocityh in the Gulch, is a partnershil between Bristol and . Several would-bw buyers at the Icon have sued to avoid being forced to purchasedthe condos.
Attorney Jean Harrison, who is representing individuals being sued by Bristol West End and some of thosre suingthe Icon, says Bristop has been “unusually aggressive” with buyers who pullee out at both projects, despite possible negative effectzs on marketing efforts for its Gulch Harrison says some of her clients didn’t close on their in part, because of the tough lending environment and because they say they were coerceed into signing contracts with deceptive information and tactics. Six monthse before the Icon’s planned openingg in April 2008, the project increased its constructioh loan fromto $105 million from $68 million.
As of May 31, the Icon had sold about one third of its420 units, with total sales of $42 million, according to deedse filed with Davidson County. The 260-unity Velocity, which was set to open in hasa $45.6 million construction loan from . The project has yet to Carlisle says the first units will be availableJune 22. Carlisle declinedd to discuss the loan amount still due or lendinh relationship at any ofhis projects. The two Gulchg projects are financially sound and could continue with sales at their current pace until they are sold out in two orthrewe years, he says.
He says that although saless have not gone as quicklyas hoped, “We’rwe very pleased with where we are rightr now with Icon and Velocity.” Carlisle says the merits over competition and location in the up-and-comint Gulch neighborhood will help them thrivse through difficult times. The competition is though, with about 1,00 0 unsold units in Nashville’s biggesft condo developments. In the first five months of 2009, about $4 millio in sales had been recordef onIcon units, with an average prices per unit of $233,500. The othet $38 million in sales came in the last seven monthxsof 2008, with an average sale price of $330,600.
Carlisle says it’s difficult to comparr sales prices because each unit is different in sizeand amenities. He notexs that some units are reservedfor moderate-income buyers under a Tax Increment Financingh agreement with Metro government. “We have been very proactive in offeringg finance programs and some selective incentiveas onparticular units,” he says. That, combinecd with the Gulch’s urban lifestyle, have been pushinh sales this year, he says.
At leas t five individuals who signed purchase agreements on units at the Icon filedr suitsagainst — the Icon’x ownership entity set up by Bristol and MarketStreet Enterprises — claiming the developers fraudulently represented a shortert than expected construction time for the projecyt to avoid financial and other disclosures to U.S. Department of Housing and Urban Development. The Interstatd Land Sales Full Disclosure Act requires certain large residential projects to make thos e disclosures if construction takes more thantwo years.