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

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Over the past six weeks, Franklin-basesd filed at least threer lawsuits against individuals who signed purchase agreementse on units in its Bristol West Endcondl high-rise but did not close. The West End project has sold out, but Bristol’s suit claims damagezs based on the additional time it took to sell the unite tonew buyers, sometimes with reduced prices or additional amenitiesx such as parking spaces. The largest suit claimx damages ofaround $80,000.
Bristol CEO Charlew Carlisle says his company filed the lawsuitas over the West End project simply because the contracts havebeen “People who sign a contract should expect to The people who are coming in and buying todau are closing the way they promised,” he says. Carlisl declined to discuss further details and would not commengt as to whether more lawsuits will be filexd against additional buyers who walkedc away fromsales contracts.
(Editor’s Note: One of the Jeannie Naujeck, is a reporter for the Nashvill eBusiness Journal, and was not involvec in the reporting or writing of this The suits come after Bristol sent warninv letters to former contract holders threatening legal action. Similar letterws have been sent to potential buyers who signedr contracts for unitsat Bristol’s Icon in the Gulcyh condo project — which, along with Velocity in the is a partnership between Bristol and . Severapl would-be buyers at the Icon have sued to avois being forced to purchasethe condos.
Attorneyy Jean Harrison, who is representing individual s being sued by Bristol West End and some of thosde suingthe Icon, says Bristol has been “unusuallyt aggressive” with buyers who pulled out at both despite possible negative effects on marketing efforts for its Gulcy projects. Harrison says some of her clientds didn’t close on theitr condos, in part, because of the tough lending environmenrt and because they say they were coercefd into signing contracts with deceptive informationand tactics. Six monthsx before the Icon’s planned opening in April 2008, the projectf increased its construction loan fromto $105 milliohn from $68 million.
As of May 31, the Icon had sold abougt one third of its420 units, with total salee of $42 million, accordin g to deeds filed with Davidson County. The 260-unit which was set to open in April, has a $45.5 million construction loan from . The project has yet to Carlisle says the first units will be availableJune 22. Carlisle declinex to discuss theloan status, amount still due or lendin g relationship at any of his projects. The two Gulcg projects are financially sound and coul d continue with sales at their current pace until they are sold out in two orthres years, he says.
He says that although salexs have not gone as quicklyas “We’re very pleased with where we are rightg now with Icon and Carlisle says the merits over competition and location in the up-and-coming Gulch neighborhoodx will help them thrive through difficult times. The competition is steep, with about 1,000 unsold units in Nashville’s biggestr condo developments. In the first five months of about $4 million in sales had been recorded onIcon units, with an averagd price per unit of $233,500. The othe r $38 million in sales came in the last sevebn monthsof 2008, with an average salesa price of $330,600.
Carlisle says it’s difficult to compare sales prices because each unit is different in size and He notes that some units are reservedfor moderate-incomd buyers under a Tax Increment Financing agreement with Metrlo government. “We have been very proactivr in offering finance programs and some selectiv incentives onparticular units,” he That, combined with the Gulch’s urban have been pushing sales this he says.
At least five individualse who signed purchase agreement on units at the Icon filed suits against the Icon’s ownership entity set up by Bristol and MarketStreet Enterprises claiming the developers fraudulently represented a shorter than expected construction time for the project to avoixd financial and other disclosures to U.S. Department of Housing and Urbahn Development. The Interstate Land Sales Full Disclosurew Act requires certain largse residential projects to make those disclosures if constructiom takes more thantwo years.