The city has backed off its demand that Jacksonville Landing Investments follow through on purchasing the mall's parking lot from the city. The change comes as city seeks to evict JLI from the Landing.
In a legal turnaround, the city no longer is seeking to compel the owner of the Jacksonville Landing to take ownership of a parking lot next to the downtown riverfront mall.
The city's decision opens the door for Jacksonville Landing Investments to pursue its quest for a refund of the $4.35 million it paid the city in 2007 for the parking lot — a transaction that never resulted in JLI taking title to the property even as the business operated the lot and charged people to park at it over the past 11 years and counting.
The city's new legal strategy, based on an amended complaint filed Friday, comes after the city went to court in a separate lawsuit to evict JLI from the mall itself, which is on city-owned land.
Jacksonville-based Sleiman Enterprises, which owns JLI, said the city "did a complete 180" on the parking lot less than three weeks before a trial date on that lawsuit.
"While Sleiman Enterprises is vindicated by the city's position, we remain disappointed," the statement said. "Lawsuits are expensive for all parties. The city of Jacksonville intentionally used litigation as another roadblock against Sleiman Enterprises providing our community with a successful redevelopment of the Jacksonville Landing."
The city issued its own statement saying the original complaint filed in 2015 was "both justified and legally correct," but the city's recent action to remove JLI from the mall makes it in the city's best interests to keep legal title to the adjoining parking lot.
"It has become clear the JLI had no intention of fulfilling its contractual obligations to the city, not only to take title to the parking lot, but also to operate the Landing as a first-class retail establishment the citizens of Jacksonville deserve," said the statement issued by General Counsel Jason Gabriel's office.
Prior to the city's shift in strategy, the lawsuit over the parking lot and the second lawsuit over the mall had a hall-of-mirrors quality to them. In the case of the parking lot, JLI was saying it didn't want to be the owner of that property while the city was trying to force JLI to follow through on purchasing the lot.
With regard to the mall, JLI wants to remain there but the city is trying to evict it from the buildings, which are on city-owned land.
Sleiman Enterprises' statement says the city now agrees it must pay back $4.7 million to Sleiman in regard to the parking lot. The company comes up with that figure by including $350,000 in contractual entitled parking credits on top of the cash paid in 2007 for the property.
But the city's amended complaint does not agree to any specific dollar amount. The complaint says it remains for the court to decide how much money each side should get credited for in reaching a bottom-line figure. The city also is asking for a judgment that would make JLI vacate the parking lot property.
The city filed its lawsuit after JLI, which is controlled by shopping center developer Toney Sleiman and his family, told the city in October 2014 that it wanted a return of the $4.35 million paid by JLI in 2007. The company said the city had failed to deliver an executed deed conveying the property and JLI therefore was entitled to call off the purchase and get its money back.
The city countered the JLI had gained "beneficial ownership" of the property by virtue of operating the lot and keeping the money collected by charging people to park at it.
In November, JLI filed a lawsuit contending the city has made it impossible to run the Landing as a first-class facility by failing to carry out its responsibilities in the lease of city-owned land. The city filed a counter-claim this month that puts the fault on JLI and seeks to evict the company, which would cause ownership of the buildings to go to the city.
The Downtown Investment Authority had been in talks with Sleiman about tearing down the Landing and building a new development on the site with millions of dollars in city incentives. After the city filed the suit over the parking lot in 2015, the Downtown Investment Authority froze those talks while waiting for the litigation to be resolved.
David Bauerlein (904) 359-4581