Court dismisses Watermark at Germantown complaint
One of the four proposed developments excluded from Germantown's moratorium on apartment construction won't be building in the city after a chancery court judge dismissed the developer's case Tuesday.
The developers of Watermark at Germantown were told by Chancellor Walter Evans they could not proceed because they contracted without a license to do so.
Developers for Watermark at Germantown were denied approval of their 310-unit apartment complex. Although they sued the city, the case was dismissed Tuesday. (Submitted)
“This court does not have the authority to grant the relief they (the plaintiffs) are asking,” said Will Wyatt, who represented the city along with attorney Ed McKenney in court Tuesday. Wyatt added that Thompson Thrift Developers violated the Tennessee Contractors Licensing Act. “This is a narrow legal issue. There are not factual issues that have to be resolved.”
Thompson Thrift can appeal the decision and is expected to do so.
Thompson Thrift is an Indiana-based developer attempting to build a 310-unit development on 51 acres south of Winchester along Crestwyn Hills Drive. The land is owned by Forest Hill Associates, according to the county assessor’s website.
The developers filed a complaint against the city after it denied Thompson Thrift’s final approval in July 2018.
The failure to grant final approval came as the city wrestled with apartment growth and its impact on city services, which led to a moratorium on new construction. Several projects already in the approval process were excluded from the moratorium, however. The Watermark project was among them.
The moratorium is set to expire July 8, and aldermen are expected to meet soon to consider next steps.
In the complaint, developers argued former Germantown city attorney David Harris said Thompson Thrift had “vested rights” to the property following preliminary approvals before the proposal reached final approval in July 2018.
But Wyatt said the approvals were not valid since Thompson Thrift was unlicensed in Tennessee.
Wyatt said the proposal submitted to the city talked about apartments, sidewalks, natural gas improvements and sewer improvements, all of which require a license. He said public records indicate Thompson Thrift Developers never had a license and therefore violated the licensing act.
“They’ve alleged the city is trying to change the game,” Wyatt said. “That’s not the case at all.”
Lew Wardlaw, who represented the developers, said his clients “never proposed to construct anything.” Instead, he argued they applied for a plan. Had it been approved, developers would have put the project out for bid, Wardlaw said.
“My clients have never swung a hammer, have never put a shovel in the ground and they never will,” he said.
He said the project likely would have been built by Thompson Thrift Construction, which is related to Thompson Thrift Developers but is licensed in Tennessee.
“(Thompson Thrift Developers) applied for the right to have plans approved to build,” Wardlaw said.
When Evans asked Wardlaw why they needed the various approvals, Wardlaw responded: “I’ll try not to chuckle.”
He said Germantown is one of the toughest places in the county, and possibly the country, to get approval of how land is used.
“All we’ve done is ask them for permission of use of the land under this plan,” Wardlaw said.
He said the developers never asked for a building permit because they “never got that far.”
“That is a job for a general contractor,” he said.
Wardlaw claimed Germantown denied the project “for political reasons.”
Wyatt rebutted Wardlaw’s statements by saying the proposal submitted to the city said the developers would “construct” the project with multiple on- and off-site improvements.
“They are not simply proposing plans,” Wyatt said. “They are proposing to construct (Watermark). ... So that they were going to hire a contractor involves contracting for which they must have a license.”
Wyatt said while they would have subcontracted, it did not negate the violation of the state’s licensing act. He also said the petitioners did not own the land. The landowners were not a party in the case.
Topics
apartment development Apartments Development Germantown Watermark at Germantown Will WyattAbigail Warren
Abigail Warren is a lifelong resident of Shelby County and a graduate of the University of Memphis. She has worked for several local publications and covers the suburbs for The Daily Memphian.
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