Legal fights over Vista properties cost nearly $1.9 million, most at taxpayer expense

The city of Columbia taxpayers paid $1.7 million in fees for the decade-long legal dispute over a failed hotel/convention center project, according to figures provided by City Hall.

The $1,705,185 in legal bills are on top of the $1.65 million a jury in July awarded the architectural and engineering firm that sued, Stevens & Wilkinson. The trial judge last week upheld the jury’s decision and refused the city’s request for a new trial, said Dick Harpootlian, who represented Stevens & Wilkinson. Still to be decided by Judge Alison Lee is how much, if any, interest the city might pay to the firm on the money owed, Harpootlian said. He claims the interest amounts to $2.9 million, while the city says it owes no more.

In another legal fight involving property in the Vista, the quasi-public Columbia Development Corp. spent $155,000 of its economic development funds to reach a settlement in June with a Columbia developer in a five-year foreclosure fight over the Senate Street fire station.

The legal expenses – which total $1,860,673 – were released in response to open-records requests by The State newspaper. The $1.7 million total in the hotel contract dispute is as of Aug. 24.

The lion’s share of hotel fight went to Callison Tighe & Robinson, the law firm that argued the city’s losing position in the protracted contract lawsuit. The firm received $1,182,408, according to a financial breakdown the city supplied.

After the law firm, the next largest outlay of public money was $435,462 to Acuitas Inc. an Atlanta accounting firm that provides litigation and business valuation services.

The smallest outlay in the hotel dispute was $1,248 paid to fly Councilwoman Tameika Isaac Devine from a vacation in Houston to testify. She told the jury she had no clear memory of earlier testimony from Bobby Lyles – a key witness for the architectural firm – that Devine had asked Lyles to make then-private attorney longtime friend, Steve Benjamin the bond attorney for the convention center development project. Benjamin is now serving his second term as mayor.

Devine’s travel expense was not taken from the $8,000 annual expense account that most council members have received for years. City Manager Teresa Wilson said she decided the cost of Devine’s testimony should be a legal expense and not be deducted from the account council member use for their normal duties.

The rest of the fees went to seven firms and individuals. Altogether, the legal costs for those seven amounted to some $86,000, according to the city’s accounting. The firms include Yonkers, N.Y., law firm Gunther H. Kilsch; deposition and court reporting firm Henjum Goucher Reporting Services; and Hdc & Associates, a real estate ownership and development firm. The roles of the others in the case could not be clearly determined Friday. They include Strategic Solutions, Golder Associates Inc., and individuals Robert M. Erwin Jr. and William Barry Jenkins.

The Columbia Development Corp. paid the McNair law firm $155,488 in the foreclosure fight with developer Tom Prioreschi, said development corporation director Fred Delk.

“This is not the city (paying the legal costs),” Delk said. “It was all funds held within the development corporation.” Taxpayer money was not involved, the director of the quasi-public organization said.

Prioreschi paid the corporation $1.35 million to settle the dispute over the structure that is listed on the National Register of Historic Places and is in a prime location a block from the State House.

The dispute grew from Prioreschi’s purchase of the former headquarters of the Columbia Fire Department for $1.45 million in 2008. In 2011, during the Great Recession, he defaulted on the bank loan, Delk said. The businessman also owed back property taxes, Delk said.

Over the years, the corporation, which guides investment in the Vista and the city center, spent about $1 million to save the fire station from the initial foreclosure and for future redevelopment, Delk said.

In July, Prioreschi sold the brick building for $2.4 million to a Virginia-based shopping center developer for reuse as a possible office/restaurant/retail project, according to Richland County records and a spokeswoman for Wheeler Real Estate Investment Trust.

“The real effect of this bad situation,” Delk said of the extended dispute, “is that it took a substantial amount of money ($1 million) from the corporation and that pot of money was not available for us to invest and reinvest (in other properties).”

This story was originally published September 27, 2015 at 7:32 PM.