|By Louis Llovio, Richmond Times-Dispatch,
Va.McClatchy-Tribune Regional News
Jul. 29, 2009--A federal judge yesterday granted the owners of an upscale hotel under construction at West Broad Village a temporary injunction allowing them to retain ownership of the entire building.
The order allows the owners of the 135-room Aloft Richmond West to maintain ownership of the building as it prepares to open Aug. 6 and to market retail space in the building to prospective tenants.
Aloft is in a five-story building in the development along West Broad Street in Short Pump. The hotel occupies the upper four floors; most of the first floor is for retail.
The hotel has owned the building during construction, but the developer of West Broad Village, Orlando, Fla.-based Unicorp National Developments, was supposed to market it to tenants and buy the building back for $2.3 million before the opening.
According to court filings, Unicorp was not able to come up with the money or the financing to buy it back. But the developer was marketing the retail portion as if it owned the building.
The judge agreed with the hotel's owners and confirmed Aloft's position. "This failure [to come up with the money] appears to breach the agreement and to undermine [Unicorp's] ability and incentive to lease space in the retail unit to commercial tenants," U.S. District Judge Richard L. Williams wrote in his order yesterday.
He also ordered Unicorp to hand over documents on any prospective tenants it has contacted.
Confirming the hotel as the owner was "necessary to enable [Aloft] to secure tenants for the retail unit in advance of the hotel's grand opening," Williams wrote.
The judge scheduled a hearing on a permanent injunction for Aug. 7.
Chuck Whittall, president of Unicorp, said he was confident the matter would be resolved, and he disputed that the project was having financial difficulties.
He would not elaborate, saying the matter was being litigated.
West Broad Village, one of the largest developments under way in the Richmond area, is a 115-acre project that includes retail, housing and office space. Portions of the project, mostly stores and restaurants close to West Broad Street, are open. The hotel sits at the center of the project.
The project has had problems in the past.
In February, a discrepancy arose about how Henrico billed Unicorp for water and sewer work. In June, Prospect Homes, which was building homes for the residential portion of the project, filed for bankruptcy protection. And several liens have been filed against the project demanding payment for services during the past year or so.
For now, Aloft's owners will take over the marketing and leasing of the building.
"Now that we have clarity on ownership, our next priority is to sign up quality commercial tenants for the retail unit and get ready for our Aug. 6 opening of the hotel," said Randy Miller of McLean-based Arnold & Porter, the attorney representing the hotel's owners.
Carl Tobias, a professor of law at the University of Richmond, said yesterday that given the timing of the order and the hotel's opening, it would be highly unlikely that either new tenants would be in place or a that settlement would be reached between the parties.
"I'd be surprised if anything happens before the next hearing," he said. ------
Contact Louis Llovio at (804) 649-6348 or LLLovio@timesdispatch.com.
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