The City of Tallahassee and Fairmount Tallahassee, LLC – the developer of the downtown Washington Square project- have reached an agreement that will allow construction to continue.
Work on the $150 million project came to a standstill in June after a disagreement with the City of Tallahassee regarding the use of the Eastside parking Garage, located off of Gadsden Street.
Fairmont eventually filed a lawsuit over the disagreement.
The settlement approved by the City Commission on August 20th will resolve the Fairmont Tallahassee, LLC lawsuit against the City of Tallahassee and will result in a payment of $187,000.00 to the City for Fairmont’s easement interest. The easement interest is in both the first floor of the Eastside garage and a ten foot (10’) no build aerial encumbrance.
The City’s Eastside parking garage is a six-level structure located at 215 South Calhoun Street and the City has fee ownership of approximately 70% of the land upon which the Eastside garage is built. The remaining 30% consists of three privately-owned lots, which are leased to the City on two long-term ground leases that will expire in 2025.
Fairmont owns the one-half block adjacent to the south of the Eastside garage and is undertaking the development of Washington Square on its parcel.
In 2016, the City granted to Fairmont a “Perpetual Ingress/Egress, Use and Parking Easement Agreement for the first floor of the Eastside parking garage” for utilization of its “back of house” operations that will include employee parking, storage, deliveries, waste disposal etc.
The parties have disputed the intent and rights granted in that easement. On August 1, 2019, Fairmont filed an eight count complaint and an Emergency Motion for Temporary Injunction. A hearing was held on August 13, 2019 and was continued until August 21, 2019.
The parties engaged in settlement negotiations to resolve all the claims raised in the lawsuit and reached an agreement.
The settlement agreement resolves the lawsuit and the parties agree that:
(1) Fairmont will purchase the easement interest in the first floor of the Eastside garage for $10,000, without competitive bidding, and that the 2016 Easement will be amended to clarify that Fairmont’s interest runs with the land, encumbers the City’s property and is limited to the height of the current first floor of the Eastside garage and shall not extend above that height even if the Eastside garage is demolished, reconstructed or otherwise altered;
(2) Fairmont will purchase, for $177,000, without competitive bidding, a no build aerial encumbrance on the City’s parcel measured from the south property line and running northerly for ten feet (10’) and extending from the eastern boundary to the western boundary beginning at the approximate elevation of the roof slab of the elevator stop tower of the level six (6) of the Eastside garage; and
(3) the parties continue exclusive negotiations to enter into a Purchase and Sale Agreement for the purchase of the Eastside parking garage, without competitive bidding, for a period of thirty (30) days from the date of the Settlement Agreement utilizing agreed upon appraisal criteria as stated in the Settlement Agreement, but with a minimum purchase price of $1.5 million, and subject to other mutually agreeable terms. The City will not be required to sell the garage to Fairmont unless all parties agree to the sale terms for the Eastside garage.