Judge issues rulings in lawsuit against City
Written by Phil Cerroni
By Amanda Casanova
A district judge dismissed a claim from the Las Colinas Group that asked for $100 million in profits lost from a failedjoint venture with the City of Irving. District Judge Carl Ginsberg ruled Nov. 11 that the lost profits are “consequential damages” and cannot be recovered, according to court documents.
In August, the Las Colinas Group filed a lawsuit against the City after the Council voted down a resolution that would have extended negotiations for a $252 million entertainment center. The lawsuit came just a day after the Council vote, the same day as a contract deadline with developer TDI Real Estate Holding and the Las Colinas Group.
The judge, however, did decide that the Las Colinas Group, the developer of the entertainment center, could seek $39 million in unpaid fees and investments.
The lawsuit, filed in the 193rd Judicial District Court, claimed that City Manager Tommy Gonzalez and “others, acting on behalf of the City, have stalled, stone-walled and delayed, purposefully allowing the contract to expire.”
Also, the City “refused to mediate in good faith” and possibly violated the Texas Open Meetings Act by “orchestrating a boycott” of the Aug. 2 special council meeting, according to the suit.
The Las Colinas Group had requested that the court issue an injunction to keep the city from “destroying, falsifying, tampering with or hiding any documents” related to the entertainment center and to prohibit the city from using hotel occupancy tax revenue to pay for lawyers.
Voters approved the entertainment center in 2007, and since then the city has spent about $35 million on the development.
The final proposal presented stipulated that TDI Real Estate Holding and the Las Colinas Group would have financed the project with $210 million in private funds and required only $17 million in new City funding. The new proposal would have made TDI the lead developer.
At one point, the City was expected to pay about $170 million of the project. However, a multi-million bond package earmarked for the project failed to receive a AAA Standard & Poor’s rating earlier this year, jeopardizing the city’s plan to raise the funds.
Ernest Walter Leonard is the attorney for the Las Colinas Group. Donald Colleluoriis representing the City of Irving in the suit.
