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Northpoint Hospitality Could Face Yet Another Hurdle for Proposed
River Street Hotel and Retail Complex in Savannah, Georgia

By Adam Van Brimmer, Savannah Morning News, Ga.McClatchy-Tribune Regional News

Aug. 30, 2012--The group planning to develop a hotel/retail complex on the east end of River Street has already overcome one legal challenge with a zoning amendment.

Northpoint Hospitality Group could soon face another, this one of the civil variety.

Developers who had a purchase agreement on Georgia Power's four-acre a year ago have pledged a lawsuit against Northpoint, the project's architect Patrick Shay and Northpoint's real estate representative, Ashley Smith of Colliers International-Savannah.

An attorney for a group known as 600 Bay Associates notified those parties, via a letter dated Aug. 23, of his intention to sue for a breach of a mutual non-disclosure agreement.

At issue are the site plans Shay presented to the Chatham County-Savannah Metropolitan Planning Commission in May. According to the letter, the materials resembled those 600 Bay Associates shared with Northpoint in March 2011, when the hoteliers were considering partnering with 600 Bay to build a hotel as part of the project.

The public sharing of the plans violated the non-disclosure pact Northpoint signed as a condition of reviewing the materials in March 2011.

"It looked very familiar," Barnard Portman, a member of 600 Bay Associates, said of the plans that appeared on the MPC website and in the Savannah Morning News. "Obviously, we feel like we have been treated wrongly."

Shay is a particular target of ire. He was at one time a partner in 600 Bay Associates and participated in the planning process, according to the letter. Additionally, Shay was the "moving force behind the decision of 600 Bay to not bring Northpoint Hospitality in as a development partner," the letter states.

Wrote 600 Bay Associates' attorney, Brent J. Savage, in the letter: "Northpoint, Shay and Colliers International have been unjustly enriched through the inappropriate use of 600 Bay's proprietary information."

Shay disputed the letter's allegations when reached for comment.

"I've read the letter and strongly disagree with all the assertions in the letter and referred it to my legal counsel for appropriate action," Shay said.

Neither Smith nor Northpoint President Jay Patel responded to telephone messages seeking comment. Northpoint's attorney, Harold Yellin, was on vacation and unavailable.

The three-page letter was penned six weeks after Savannah City Council approved a change to the Historic District Height Map. The amendment allows a developer, like Northpoint, to build a seven-story building on a waterfront portion of the site.

Northpoint's plans for the Georgia Power property call for two hotels, four retail buildings, a 500-space parking garage and greenspace. The existing office building, long Georgia Power's local headquarters, is also part of the project.

The development is valued at between $80 million and $100 million.

The purchase of the property was expected to close later this year. However, the due diligence period has been extended through the first quarter of 2013, according to a Georgia Power representative, ostensibly to allow Northpoint to address the civil liability issues.

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(c)2012 the Savannah Morning News (Savannah, Ga.)

Visit the Savannah Morning News (Savannah, Ga.) at savannahnow.com

Distributed by MCT Information Services NYSE:SO,



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