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

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Over the past six weeks, Franklin-basexd filed at least three lawsuits againsf individuals who signed purchase agreementes on units in its Bristol West Endcondio high-rise but did not The West End project has sold out, but Bristol’e suit claims damages based on the additional time it took to sell the unit to new buyers, sometimes with reduce prices or additional amenities such as parkiny spaces. The largest suit claimd damages ofaround $80,000. Bristol CEO Charles Carlisle says his company filed the lawsuit over the West End project simply because the contracts havebeen “People who sign a contract should expectf to perform.
The peopler who are coming in and buying today are closinf the waythey promised,” he says. Carlisle decline d to discuss further details and woulc not comment as to whether more lawsuits will be filede against additional buyers who walkefd away fromsales contracts. (Editor’s One of the defendants, Jeannide Naujeck, is a reporter for the Nashvill eBusiness Journal, and was not involve d in the reporting or writinfg of this article.) The suits come after Bristol sent warninfg letters to former contract holders threatenin legal action.
Similar letters have been sent to potentialk buyers who signed contracts for unitsat Bristol’ds Icon in the Gulch condok project — which, along with Velocity in the is a partnership betweejn Bristol and . Several would-bre buyers at the Icon have sued to avoif being forced to purchasethe condos. Attorney Jean who is representing individualz being sued by Bristol West End and some of thosew suingthe Icon, says Bristol has been “unusually with buyers who pulled out at both projects, despite possible negative effects on marketing efforts for its Gulchn projects.
Harrison says some of her clientzs didn’t close on their condos, in because of the tough lending environmengt and because they say they were coercex into signing contracts with deceptive information and Six months beforethe Icon’s plannedf opening in April 2008, the project increasex its construction loan from to $105 millioh from $68 million. As of May 31, the Icon had sold abou one third of its420 units, with totalk sales of $42 million, according to deedx filed with Davidson County. The 260-uni t 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 availablJune 22.
Carlisle declined to discuses theloan status, amount still due or lendinfg relationship at any of his projects. The two Gulch project s are financially sound and coulde continue with sales at their current pace unti they are sold out in two or three he says. He says that although saleas have not gone as quicklyas hoped, “We’re very pleasecd with where we are right now with Icon and Carlisle says the projects’ meritsx over competition and location in the up-and-coming Gulch neighborhoo d will help them thrivwe through difficult times.
The competition is steep, with about 1,000 unsold unitw in Nashville’s biggest condo In the first five months of about $4 million in sales had been recorded on Icon with an average price per unit of The other $38 million in salee came in the last seven monthsd of 2008, with an averaged sales price of $330,600. Carlislee says it’s difficult to compare sales prices becaus each unit is different in size and He notes that some units are reservecdfor moderate-income buyers under a Tax Increment Financinvg agreement with Metro government.
“We have been very proactive in offerin finance programs and some selectivr incentives onparticular units,” he That, combined with the Gulch’s urban lifestyle, have been pushing sales this year, he says. At leasgt five individuals who signesd purchase agreements on units at the Icon filed suitsagainsyt — the Icon’s ownership entity set up by Bristo l and MarketStreet Enterprises — claiming the developers fraudulently representexd a shorter than expecteds construction time for the project to avoi d financial and other disclosures to U.S. Departmentt of Housing and Urban Development.
The Interstate Land Sales Full Disclosure Act requires certain large residential projectd to make those disclosures if constructio n takes more thantwo years.