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TX City Sues Developer Over $1B Project

Tuesday, January 22, 2019

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The city of Rowlett, Texas, filed a lawsuit earlier this month against developer Bayside Land Partners LLC over allegations that the firm defaulted on agreements for a $1.1 billion mixed use development that’s underway.

The Project

Rowlett and the developer had been working in the public-private undertaking since 2015 to bring the mixed-use development, also called Bayside, to Rowlett and the Dallas/Fort Worth metroplex.

The two entered into a series of development agreements for the 262-acre project, including an eight-acre Crystal Lagoon, one-acre show fountain, 1.75 million square feet of commercial space, an open-style bench trolley, 45 acres of programmed parks, 4+ miles of hike-and-bike trails and a 500-room resort and conference center.

City of Rowlett, Texas

The city of Rowlett, Texas, filed a lawsuit earlier this month against developer Bayside Land Partners LLC over allegations that the firm defaulted on agreements for a $1.1 billion mixed use development that’s underway.

In June 2018, the city issued a pre-default notice to the developer with the hopes that the obligations for the project would be fulfilled. However, according to the city, in July 2018, the developer proposed significant changes to Rowlett City Council, including eliminating arguably the biggest features of the project: the lagoon, fountain and trolley.

In September, Rowlett City Council officially voted to reject the revisions.

“This is a textbook bait and switch tactic,” said City Manager Brian Funderburk. “We were promised and sold on a great project and after we fulfilled our obligations, we were shown a completely different one. The [city] has performed as required under the development agreements and it is clear that the [developer] has not and does not intend to fulfill its obligations. By filing this lawsuit, the [city] is seeking all available legal remedies.”

Because of the initial agreed-upon vision, the city has adopted a tax increment reinvestment zone to support the project, created a public improvement district and secured state tax support for a convention center, reports the Dallas Business Journal.

The Lawsuit

The suit, filed in Dallas district court, alleges that the developer was changing plans as early as August 2017, while the city was issuing $50 million in public improvement bonds.

"If Bayside had been honest, Rowlett would have not issued the bonds," the suit says. "They were at the very least contemplating different plans, or, more likely, had already decided to abandon the agreed plan for an entirely new plan."

Work has been ongoing on the north side of Interstate 30, where the project is mostly residential. However, city officials say that they never would have agreed to such residential density if they knew that the lavish amenities they were promised weren’t going to be there to support it.

The city says that the entertainment portion of the project was supposed to be completed by the third quarter of 2019 but will likely remain undeveloped land.

The city’s attorney, Michael Collins, told the Dallas Morning News that it “would be appropriate for the court to award at least the south side of the property to Rowlett so that the city may develop it as it intended.”

"The city of Rowlett is resolved that it will not settle for anything less than making Bayside a unique legacy project and world-class destination," the city's statement says.

Representatives for the developer told the Morning News that they had not seen the lawsuit and could not comment.


Tagged categories: Commercial / Architectural; Developers; Good Technical Practice; Lawsuits; NA; North America

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