Bank of America and the city of Nicholasville have agreed to discuss a possible resolution to a complaint that the bank filed last week against the city and others concerning five parcels of undeveloped property in Brannon Crossing shopping center.
At issue is whether the city overstepped the authority of its own nuisance ordinance to take care of excessive weeds, construction debris and silt on those properties.
Bank of America holds the mortgage on the parcels and plans to purchase them when they go up for sale Wednesday morning on the steps of the Jessamine County Courthouse in Nicholasville.
In the complaint filed Friday, Bank of America claims the city sent bills of more than $39,000 "for work undertaken" without providing the bank "notice or an opportunity to undertake the work itself."
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Among the work was the "installation of an earthen berm silt pond with a bypass trench," according to an invoice filed among the court documents.
The city contends that by virtue of its abatement efforts, it holds superior liens on parcels within Brannon Crossing mortgaged by Bank of America.
The bank argues that by forcing it to pay these bills, Nicholasville's actions constitute "a deprivation of property interest without sufficient due process" that violates the 14th Amendment to the U.S. Constitution — hence the filing in U.S. District Court in Lexington.
The complaint says the city plans to perform grading upon other parcels mortgaged within Brannon Crossing — spanning more than 100 acres — without providing the bank any more notice than it has thus far. Such actions would further violate the bank's constitutional rights, the complaint says.
But under a "joint stipulation" filed Monday, the city of Nicholasville says it will not cause any further action or remediation to be taken on the properties. The city also agrees not to "create, perfect or enforce" a lien.
If the bank and the city are unable to resolve their differences, the parties will confer with Judge Joseph Hood to schedule a date for a hearing on the banks' pending motion for an injunction.
David Owen, the lawyer representing Bank of America, and William Arvin, city attorney for Nicholasville, could not be immediately reached Tuesday for comments.
The land for Brannon Crossing near the Fayette-Jessamine line was annexed into the city of Nicholasville in 2005. Developer James Hughes obtained financing from Fifth Third Bank to develop the parcels of residentially zoned property within Brannon Crossing, the complaint says. Fifth Third assigned the notes to Bank of America in 2010 after Hughes defaulted, the suit says.
Hughes completed most of the commercial-retail portion of Brannon Crossing but was unable to complete much of the residentially zoned portion. He eventually filed for Chapter 7 bankruptcy, the suit says.
On July 6, 2013, Hughes was discharged from bankruptcy. In other words, he did not have to pay certain debts, including those abatements that the city had performed by a contractor.