Judge sides with Pezold, halts Development Authority sale of downtown hotel site

A Muscogee County Superior Court judge has sided with a Columbus-based hotel owner, issuing an injunction that will halt the sale of a prime piece of downtown property to a competing hotel company.

Judge Gil McBride ruled late Wednesday that the Development Authority of Columbus could not close a deal with Vision Hospitality, a Chattanooga, Tenn., company, for a proposed a 125-room hotel on 1.75 acres next to the downtown Marriott in the 800 block of Broadway.

That Marriott is owned by Four JS Family LLLP, a partnership controlled by Columbus businessman Jack Pezold. Like Vision Hospitality, Pezold had been vying for a new downtown Hampton Inn franchise to be awarded by Hilton Worldwide. Hilton awarded that franchise to Four JS Family after Vision withdrew its bid in the wake of the lawsuit, according to court testimony last month. Four JS Family plans a roughly 65-room Hampton Inn in the former Aaron’s Rents building at the corner of Broadway and 12^th Street.

Pezold’s attorneys, Joe Waldrep and Morris Mullin of Waldrep, Mullin & Callahan LLC, argued that under state law the Development Authority, an arm of the Columbus Consolidated Government charged with economic development, could not sell land for less than fair-market value. In a deal reached on Jan. 7, the Development Authority agreed to sell the property, currently used as the Marriott parking lot, for $50,000 to Vision Hospitality. During testimony at a hearing last month, Pezold Management Chief Operating Officer Tracy Sayers stated the land was worth between $500,000 and $750,000 per acre.

Development Authority attorney Jerry Buchanan, with Buchanan & Land LLP, argued that state code did allow for development authorities across the state to sell property at below fair-market value to spark economic development and create jobs. He cites deals in Columbus for new Blue Cross/Blue Shield and Aflac campuses as examples of what Development Authorities do.

In a seven-page order granting Pezold’s request, McBride stated that the Development Authority did not notify Pezold’s companies of the negotiations and contract with Vision and the Development Authority dealt exclusively with Vision.

“The judge was under a lot of pressure because of possible economic harm to Columbus if he did not rule that way,” Mullin said. “I am proud of the judge for not reading words in the statute that were not there.”

Buchanan said the Development Authority will appeal the decision to either the Georgia Court of Appeals or the state Supreme Court. That decision is still being made. McBride’s ruling could have far-reaching impact on development authorities across the state if it is allowed to stand, Buchanan said.

“We have no choice other than to appeal,” Buchanan said. “If this ruling is allowed to stand, it will shut down the Development Authority and its ability to attract new businesses and jobs, its ability to keep the businesses we already have and it will limit those businesses’ ability to expand.”

The Development Authority of Columbus operates through the Greater Columbus Chamber of Commerce, which has an economic development contract with the city and receives city funding to recruit and attract businesses to Muscogee County.

McBride held a hearing on March 25 to consider two motions: one from the Development Authority to dismiss the complaint by Four JS Family LLLP, and the other was to make a temporary restraining order obtained on Feb. 29 from Superior Court Judge Bobby Peters an injunction stopping the finalizing of the deal. McBride denied the defendant’s motion to dismiss at the same time he extended the injunction.

McBride originally told both sides he would issue his order by March 31. He informed the parties that day of his intentions, but did not sign the official order until Wednesday.

In the meantime, Buchanan took exception to the proposed order’s wording and let it be known in a strongly worded letter to McBride.

“I note that the proposed order is not the work of the court, but is created by the plaintiff out of whole cloth,” Buchanan wrote. “That is true because the court has not uttered any words indicating what it found, heard, saw, believed or disbelieved as a result of the hearing. Therefore the order proposed by plaintiffs should not be entitled to any presumption of accuracy or fairness; it is the product of an advocate.”

Buchanan’s letter was an attack on McBride, Mullin responded in a letter to the judge.

“The letter copying his client clearly was a ‘show’ designed to impress his client at the expense of the court,” Mullin wrote.

The land in question has been in limbo for years. Pezold purchased the 170-room downtown Marriott 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.

Three times the city or the Development Authority have tried to attract interest in building the additional 130 rooms and a parking deck that would be needed to service the hotel or hotels. 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 Development Authority’s deal with Vision Hospitality and Columbus hotel owner and developer Dahn Parekh, who was a Vision partner for this property came, about after Pezold submitted plans to Hilton Worldwide to obtain the Hampton Inn franchise.

This story was originally published April 14, 2016 at 1:15 PM with the headline "Judge sides with Pezold, halts Development Authority sale of downtown hotel site."