City settles lawsuit, now owns downtown garage - SanTan Sun News SanTan Sun News

City settles lawsuit, now owns downtown garage

October 12th, 2022 SanTan Sun News
City settles lawsuit, now owns downtown garage
Community
0

By Ken Sain
Managing Editor

The City of Chandler has settled a lawsuit and taken possession of the parking garage behind the LOOK Dine-In Cinema downtown.

The Overstreet Parking Garage opened in 2019 and the city had planned on purchasing it. However, the builder of the garage claimed the city missed a deadline to complete the purchase and wanted to hold on to the property and continue to lease it to the city.

Kelly, great job to you and your team and our legal department for pulling this together, it’s a smokin’ deal for the city,” Councilman Mark Stewart told City Attorney Kelly Schwab. “Let me just break it down to numbers here. We got a great parking garage for community parking.”

It’s a nice parking garage over by LOOK’s that will continue to be able to provide free parking downtown for all of our residents and people that love visit Chandler,” Stewart added.

The two sides agreed for the city to purchase it for $9.625 million. That’s about $1 million more than the city intended to pay the developer, DT Chandler. However, the developer intended to charge the city $65,000 a month in rent over the 27-year lease, which would have cost $21.2 million.

DT Chandler had filed a lawsuit in Maricopa County Superior Court a year ago, claiming the city had to notify the developer it intended to exercise its option to purchase the garage for $8,690,351 in writing at least 30 days before the third year of its lease ended.

According to DT Chandler, that would have been Aug. 12, 2022. It says the city notified them in writing on Aug. 27.

The city then countersued the developer, saying the lease “represents only a portion of the overall dealings between the parties” and that the lease “must be read in conjunction with” development and option agreements.

The city also says the document the plaintiff attached to the complaint “does not bear the stamp of a document recorded with the Maricopa County Recorder’s Office and which the City considers the official version of the document.”

Chandler officials also claimed the pandemic played a role in the delay.

In another counterclaim, the city said DT Chandler had agreed to extend the deadline for exercising its option to October 2022 and accepted a sale price of $8.8 million.

In the end, the two sides agreed to go through with the sale and transfer to the City of Chandler for just under $1 million more than the price in the original agreement.