NKU delayed gateway development due to city and county pressure

A Cleveland Area Developer is suing Northern Kentucky University for breach of contract, saying the university got “bitter” over a mixed-use walkway project after the developer had already incurred millions of dollars in expenses.

Now, the future of the long-planned, multimillion-dollar development appears to be in jeopardy, although the developer is asking the court to order NKU to give the necessary approvals for the project to go ahead.

The lawsuit, filed Tuesday in Franklin County Circuit Court, alleges the university coordinated with Campbell County and the City of Highland Heights to obstruct the development of the multi-phased project.

Fairmount has completed the first phase of the project, a 65,000 square foot building St. Elizabeth Healthcare Office Buildingg, in April 2020, according to university records.

The “downtown,” the second phase of the project, announced in 2017, outlined a plan to add new restaurants, retail space, market-priced apartments, a hotel, structured parking and public gathering spaces adjacent to the campus NKU’s Highland Heights.

In March 2021, NKU entered into a 75-year lease with Fairmount Properties as part of a public-private partnership for the downtown phase.

Under the agreement – obtained through an open records request from Kentucky – the university, which owns the approximately 16-acre site at the corner of US 27 and Nunn Drive, would not be liable construction, financing or operation of the development.

The complaint says that before construction could begin, NKU insisted on several changes to the site plan “without any knowledge or expertise as to planning a mixed-use development.”

NKU approved the developer’s design after a long delay, the complaint says, although Highland Heights and Campbell County also later expressed concerns about the project. Some of those concerns related to the design and construction of the hotel project, which had been temporarily delayed due to the economic impacts of COVID-19, the lawsuit says.

NKU made false statements to the developer, according to the lawsuit, assuring that construction would proceed if Fairmount worked to address city and county concerns. But after several months of working with officials to resolve those issues, according to the complaint, the university, city and county withdrew their support for the project.

According to the lawsuit, NKU rejected a proposal to extend the schedule for the project, following lengthy discussions with city and county officials, saying it believed Fairmount could no longer fund the development.

However, the developer claims to have secured funding that would have generated an additional $10-15 million for the university.

“Highland Heights and Campbell County pressured NKU to end the project because they did not like the design,” the complaint states, adding that university officials were aware that NKU could be subject to a trial if he gave in to pressure to break his contract.

University officials believed they could evade responsibility by halting development progress, the lawsuit says.

In a statement released Tuesday afternoon, NKU denied the allegations presented in Fairmount’s lawsuit.

“It is disappointing that Fairmount would rather pursue legal action for this project than complete it,” the statement read. “Instead of building the dynamic development it promised, and years after its selection, Fairmount has left NKU with nothing but costs, delays and a vacant site. Fairmount’s allegations are false, and NKU will vigorously do advance its interests in this litigation.”

The site where Northern Kentucky University and Fairmount Properties planned to build a mixed-use development and professional office building along US 27 and Nunn Drive.

In a statement sent to The Enquirer late last month, the university said “ongoing challenges in the broader commercial real estate industry” were the cause of delays in the construction of the project, adding that she was in talks with Fairmount about “next steps.” “

Fairmount is asking the court for compensatory, punitive and loss of profits damages, as well as an order requiring NKU to extend the project schedule so that work can continue.

“In short, but for many delays and obstructions created by NKU and other public officials, this project would be well underway,” Adam Fishman, director of Fairmount Properties, said in a statement. “We are disappointed that the project did not materialize as expected and we have never experienced anything like this in the history of our company.”

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