Pezold company seeks to stop sale of property next to downtown Marriott

A tug-of-war that started over a new downtown Columbus hotel franchise spilled into Muscogee County Superior Court Friday as attorneys for local hotel owner and businessman Jack Pezold sought a permanent injunction to stop a deal between the city’s development authority and another company proposing a competing hotel.

The hearing was in front of Superior Court Chief Judge Gil McBride, who told the parties he would rule by noon Thursday when a temporary restraining order obtained Feb. 29 expires.

During testimony, Pezold Management Chief Operating Officer Tracy Sayers told the court that Four JS Family LLLP, a partnership controlled by Pezold, has been informed by Hilton Worldwide brand that it has been awarded a 65-room Hampton Inn franchise for downtown Columbus. It will be located at 1201 Broadway in the former Aaron’s Rents building acquired by a Pezold entity. Four JS Family LLLP is working with architects and proceeding with the 1200 block project, Sayers said.

Vision Hospitality, a company based in Chattanooga, Tenn., proposed a 125-room Hampton Inn and struck a deal with the Development Authority of Columbus to purchase 1.75 acres next to the downtown Marriott in the 800 block of Broadway for $50,000. The hotel would have been next to the Marriott that Four JS Family LLLP currently owns.

Columbus hotel owner and developer Dahn Parekh, a partner in Vision Hospitality, said Vision withdrew its proposal to Hilton Worldwide for the Hampton franchise after Superior Court Judge Bobby Peters granted the temporary restraining order.

“Vision did not want to get into litigation,” said Parekh, who also is a partner in two Columbus hotels with city Councilor Glenn Davis, who was not involved in the Hampton Inn project.

Vision Hospitality still has the site next to the Marriott under contract for a proposed hotel, according to testimony.

Attorneys for Pezold argued that the Development Authority exceeded its power under state law by selling the property, currently used as a parking lot for the Marriott, below fair market value. Attorneys for the Development Authority countered that it has the power, under Georgia code, to dispose of land to create jobs and economic development.

The two sides attempted to frame their arguments early in the nearly seven-hour hearing.

“The sole issue is there is no authority to sell this at less than fair-market value,” argued Pezold attorney Morris Mullin.

“There is nothing wrong with what the authority did,” Development Authority attorney Jerry Buchanan argued. “That is what the authority does.”

Pezold purchased the 170-room downtown hotel in 2002 for $8 million after there were community concerns about the condition of the facility. He renovated rooms but never expanded to the 300 rooms the city said it needed to attract business for the Columbus Convention & Trade Center.

The parking lot land is worth more than $50,000, Pezold’s lawyers argued Friday. During testimony, Sayers estimated the land was currently worth between $500,000 and $750,000 an acre.

Pezold’s attorneys argued that the deal was done quickly without a public process. In 2005, 2009 and again in 2013, the Development Authority requested those interested in putting 130 new hotel rooms across from the Convention & Trade Center submit proposals. Pezold submitted proposals in 2005 and 2009, but they were rejected by the authority. Pezold did not submit a proposal in 2013.

The deal with Vision was not done in the same public manner as the previous requests, Sayers said.

“If this one had been done publicly, we would have been OK with that,” Sayers said after the hearing. “Put it out there and let the city get the best and fair return.”

Also after the hearing, Buchanan said the authority had tried that for 15 years to get the needed hotel rooms the city claims it needs to maximize the use of the Convention & Civic Center.

“Nobody offered a good bid,” Buchanan said. “But it doesn’t matter because the Development Authority doesn’t have to have an open process. For a project, they can sell it to who they want.”

Buchanan told the judge that there could be dire economic consequences if the court rules against the Development Authority, which is the economic development arm of the Columbus Consolidated Government.

“This may be the most important decision this court ever makes,” Development Authority attorney Jerry Buchanan told the judge. “If you rule for the plaintiff, you are going to shut down economic development in Georgia and all of its 159 counties. You are going to make it where Georgia can’t compete with South Carolina and neighboring states.”

This story was originally published March 25, 2016 at 5:28 PM with the headline "Pezold company seeks to stop sale of property next to downtown Marriott."