Developer notches legal victory in Millennium battle with Port

Developer notches legal victory in Millennium battle with Port

A Cincinnati commercial real estate developer has won a summary judgment against the Port of Greater Cincinnati Development Authority for a $5 million development fee for its role in acquiring the Millennium Hotel for redevelopment.

Hamilton County Common Pleas Judge Tom Heekin made a summary judgment Wednesday in favor of Vandercar LLC, which filed its lawsuit against the Port in February 2020. Vandercar sued the Port, an organization formed in 2001 to stimulate growth of the regional economy, for breach of contract and negotiating in bad faith.

In Heekin’s summary judgment, a judgment entered by a court for one party and against another without a full trial, he awarded Vandercar the additional $5 million the Port agreed to pay Vandercar if the Port issued any redevelopment bonds to finance redevelopment of the property within a year of the real estate closing, or if the Port the Port transferred the project to a third party prior to the payment of the additional Vandercar redevelopment fee.

Rob Smyjunas, CEO of Vandercar, said it came down to the definitions included in the agreement.

“Demolition is a part of redevelopment,” Smyjunas told me. “I feel disappointed at the Port and how the Port treated Vandercar, as well as others.”

Tom Millikin, vice president of communications and marketing for the Port, said in a statement, “We stand by the merits of our case and disagree with the court’s decision. We are considering our options moving forward so it would be inappropriate to comment further.”

Under the agreement with the Port, Vandercar could be entitled to two fees, each triggered by a different event. When the Port acquired the hotel on Feb. 14, 2020, for $36 million, Vandercar received a $2.5 million development fee.

The Port issued revenue bonds totaling nearly $53 million on Feb. 13, 2020, which included about $39 million to acquire the hotel and pay Vandercar its development fee and expenses and about $13 million to begin redeveloping the property, according to the lawsuit. The next day, the Port closed on the purchase of the hotel and transferred ownership to the Hamilton County Land Reutilization Corp. Records with the Hamilton County Auditor’s office show the property was first transferred to the Port of Greater Cincinnati Development Authority and then to the Hamilton County Land Reutilization Corp., better known as the Land Bank.

Smyjunas said his legal team, which include Beth BryanStuart Dornette, and Russell Sayre at Taft Stettinius & Hollister LLP, did a “spectacular job” presenting the case.

“(Vandercar) didn’t do anything wrong,” Smyjunas said. “We actually did something nobody else could do.”

Oakley-based Vandercar acquired the right to buy the downtown hotel at 150 W. Fifth St. in July 2019 from Millennium & Copthorne PLC, which is headed by Singapore billionaire Kwek Leng Beng. Vandercar assigned the purchase rights to the Port in exchange for redevelopment fees in October 2019.

City and county officials had struggled for years to find a way to either get the previous owner of the Millennium Hotel to drastically improve it or sell it so it could be redeveloped.

As for the former Millennium Hotel, demolition is currently underway. According to the Port’s reply brief in support of its motion for summary judgment, the Port has “no plans and no financing issued for a ‘new hotel.’”

Smyjunas said he hopes the new hotel and convention center expansion can occur.

“It’s out of my hands, but the discussion about putting the hotel on the south Plum (Street) site is wrong,” Smyjunas said. “The plan we presented, a hotel integrated into the expansion of the convention center, is the way to go.”

“I’m shocked to hear they are putting all the rubble in the hole and building a park on top,” he said. “I hope that this opportunity doesn’t get wasted.”