Lawyers for CentrePointe developers sent a letter to Lexington officials Friday threatening legal action unless the city by May 7 rescinds a notice to fill in the site.
Richard Getty, a lawyer for CentrePointe, said the city's demand letter sent Tuesday and statements made to the media about the project have "negatively impacted and interfered" with CentrePointe's ability to finish the project.
If the city does not withdraw its notice to have the site filled in, CentrePointe will have no alternative "but to consider taking formal legal steps to protect its valuable business interests and reputation."
CentrePointe is slated to include a hotel, apartments, an office tower and restaurant and retail space. A block of buildings was razed for the development in 2008, but construction did not begin until late 2013. Tower cranes now sit on the excavated site, but a parking garage has not been built. The site, bounded by Main, Vine and Upper streets and South Limestone, is in the heart of downtown.
The letter says Mayor Jim Gray and others at city hall have for "inexplicable reasons, been intent on destroying the CentrePointe project."
Because of the negative publicity the city's demand letter has generated, one of the tenants for the project has pulled out, the letter said. The tenant was not named in the letter.
Getty confirmed that Jeff Ruby's Steakhouse, which has restaurants in Louisville and Cincinnati, withdrew from the project after CentrePointe received the city's notice Tuesday.
Getty said that developers hope if the city withdraws the notice, Ruby will return.
Calls to Jeff Ruby this week were not returned.
"We are hopeful that litigation will not take place," Getty said. "It's in the best interest of the city that this project — which has so much time, money and effort invested in it — move forward."
Getty said he plans to send the city a litigation hold letter that will instruct the mayor and all city officials to save any correspondence, including emails, concerning CentrePointe.
The city and CentrePointe signed an agreement in December 2013. The agreement says that if no work were done toward completing the parking garage for 60 days, the city could ask that the site be filled in. If the developers do not fill in the site, the city could take out a mortgage on the property to pay to have the site filled in, the agreement says.
Mason Miller, a lawyer for the city, said late Friday that he had not had a chance to read the letter and could not comment on it.
Friday's letter was the latest in a week of back-and-forth between CentrePointe officials and the city. On Wednesday, CentrePointe officials sent the city a letter with emails and invoices from several contractors showing that work had occurred at the site over the past 60 days.
Miller said Friday that he has reviewed those invoices. The work done had nothing to do with completing the three-story underground parking garage, which is what the December 2013 agreement said.
"All of the work they cited was not work toward the completion of the parking garage. It's all work to control erosion on the site," Mason said. "It just proves that work toward the parking garage has not been occurring."
The agreement does not define work.
Miller said he could not say how the city would respond without first talking to city officials. That likely won't occur until sometime next week.