Developer offers city settlement in Palm Avenue lawsuit

On May 30, representatives for the developer that recently won a $49.8 million jury verdict against the city of Sarasota sent a letter to city officials regarding a possible settlement in the ongoing lawsuit.

In the letter to the city’s legal team, Buck-Leiter Palm Development attorney Tom Leiter said a settlement could “substantially reduce the potential award and structure the timing of payment.”

Now, Leiter has revealed the developer’s desired terms. The proposed deal, outlined in a June 6 letter, would require the city to pay the full sum of $49.8 million in damages within five years. In exchange, Buck-Leiter would waive the right to seek additional payment from the city for attorneys’ fees and interest on the jury award dating back to 2008.

The legal dispute is tied to the city’s 2008 decision to stop working with Buck-Leiter on the development of a city-owned parcel on Palm Avenue. Today, that land is the Palm Avenue parking garage and the Art Ovation Hotel.

In 2010, Buck-Leiter filed a lawsuit accusing the city of breaching its contract. The city argued it was not bound to follow through on an initial agreement to develop the parcel alongside Buck-Leiter. In May, a jury ruled in favor of Buck-Leiter, awarding the developer damages that included lost profits from the project that was never built.

At the June 4 City Commission meeting, City Attorney Robert Fournier said the city was still awaiting decisions on some post-trial motions before determining how to proceed. The city will have a 30-day window to appeal once 12th Judicial Circuit Court Judge Erika Quartermaine makes a final ruling. Fournier said he anticipates that ruling could come in July or August.

In the letter, Leiter suggested the city could save more than $25 million by agreeing to the nearly $50 million settlement. Interest on the jury award could require the city to pay an additional $24 million, he wrote, with attorneys’ fees pushing the city’s final total payment to more than $75 million.

The settlement offer asks the city to pay $9.8 million by July 3, with additional annual payments of $10 million through 2022. The city would also have to pay an annual interest of 3% on the unpaid balance. The letter requests a decision from the city no later than June 19.

Fournier declined to comment on the specifics of the settlement offer. He placed the item on the agenda for the June 18 commission meeting for further discussion.

“I’m going to refrain from characterizing the proposal in any way and see what the commissioners think,” Fournier said.