City wins, loses in SC Supreme Court in long-running Vista hotel dispute
The city of Columbia dodged a $3 million or greater legal bill Wednesday when the S.C. Supreme Court ruled it did not have a binding contract with a team of architects, developers and others with whom it had an initial agreement – later abandoned – to build a city-owned hotel in the Vista.
“It could have been big,” said Rick Detwiler, one of the winning lawyers who defended the city in the legal battle that’s gone on some 10 years. He did not know exactly how much money the city stood to lose if the matter had been sent back to lower court.
In a related case, however, the Supreme Court kept alive a lawsuit by architects Stevens & Wilkinson, who contend the city still owes the firm money for initial design work it did in 2003 on the proposed city-owned hotel that was to be connected to the Columbia Metropolitan Convention Center.
That suit was sent back to the lower court to determine whether the city breached any contract it had with Stevens & Wilkinson and, if so, how much the city owed the firm.
“The city has huge exposure here,” said Stevens & Wilkinson attorney Dick Harpootlian, saying a jury trial is possible. “We are considering right now whether we will ask for punitive damages.”
Even without punitive damages, his client will be seeking at least $2 million, Harpootlian said.
The legal battles began some 10 years ago when the city was planning to build a city-operated hotel that would work in tandem with the convention center in the now-thriving downtown Vista business district.
In making initial plans to develop the hotel, the city drew up a written memorandum of understanding in 2003 with an architectural firm, a realty company, a development company and a construction company. In 2004, the city broke off relations with that development team and chose another. Most of the firms in the first team sued.
But the Supreme Court, in a 13-page opinion thick with complex language on contract law, ruled that the memorandum of understanding the city and the companies signed didn’t amount to a formal, binding contract because its language wasn’t specific enough to require the city to go ahead with those parties.
The losing parties in that lawsuit were architects Stevens & Wilkinson, Gary Realty Co., Garfield Traub Development and Turner Construction Co. In 2004, projected rising costs of their initial project caused the city to reject that project and to choose instead private developers Windsor/Aughtry Co. and Vista Hotel Partners to build a hotel with Hilton. The Hilton now sits across from the convention center.
The Supreme Court’s decision in this case has significance across the state, Detwiler said.
“Businesses and governments use memorandums of understanding all the time” as a way to facilitate parties reaching a point where people finally can sign a firm contract, Detwiler said. “They serve a very useful purpose – but it isn’t to get sued over.”
According to 2009 filings, Stevens & Wilkinson was seeking $1.6 million in that case. Gary Realty and Garfield Traub Development were seeking about $2 million. It was not immediately clear what Turner Construction was seeking.
In the other opinion, the city lost its battle to be completely absolved from paying any more money to architects Stevens & Wilkinson for initial design work the firm did for the city in 2003.
How much money, if any, the city still owes Stevens & Wilkinson will now go back to the trial court for determination.
Reece Williams, a Columbia attorney representing the city, said the city will fight the matter if it can’t be resolved out of court. “Factually, the city will not agree that any more money is owed.”
The city approved paying $697,000 for the initial design but balked at paying any more.
There remains no hotel dedicated exclusively to convention center guests.
This story was originally published August 20, 2014 at 10:11 PM with the headline "City wins, loses in SC Supreme Court in long-running Vista hotel dispute."