Lexington officials meet in closed session under cloud of CentrePointe litigation threat

City officials have not yet responded to a demand by CentrePointe developers to rescind its notice to fill in the long-delayed development or face a potential lawsuit.

After the Urban County Council met behind closed doors for hours with city lawyers Tuesday to discuss potential litigation, city officials declined to comment on the session.

Susan Straub, a spokeswoman for the city, declined to say whether the council was discussing CentrePointe.

But Mason Miller, a lawyer who the city hired to represent it regarding CentrePointe, was in Tuesday's meeting. Under the state's open meetings law, the council is allowed to discuss an issue behind closed doors if it involves potential litigation.

CentrePointe developers sent the city a letter May 1 saying that if the city's demand to fill in the site had not been withdrawn by Friday, the Webb Companies — the CentrePointe developers — would sue the city.

Tuesday's meeting came after a week of back-and-forth between the city and developers of the long-delayed development, which is supposed to include a hotel, apartments, an office tower, restaurant and retail space. The site, in the heart of downtown, is bordered by Main, Vine and Upper streets and South Limestone.

The city sent CentrePointe developers a letter April 27 demanding the site be filled in because no work had occurred on the development in 60 days. As part of a tax incentive program, the city and CentrePointe signed an agreement in December 2013 that said that if no work had occurred toward completion of the underground parking garage in 60 days, the city could demand that the site be filled in. In the alternative, the city could take out a mortgage on the property to pay for the site to be filled in.

CentrePointe officials responded by saying that crews had been on the site and provided contractor emails and work invoices to city officials. The city's lawyers have said those invoices and emails show only erosion control and other work done to preserve the site. That work was not toward the completion of the underground parking garage, they argue.

CentrePointe lawyers then sent the city a letter Monday asking the city to preserve all documents, including emails, relating to CentrePointe dating to December 2007.

The downtown development has been stalled for nearly seven years. A block of downtown buildings was razed in 2008 in preparation for the development, but construction did not begin until late 2013. Excavation began on the three-story underground parking garage in 2014, but the garage itself has not been built. Tower cranes currently sit on the site.

Dudley Webb of the Webb Companies has said that developers are still planning on selling bonds for the underground parking garage and have identified a bond buyer. Webb, in an appearance before the Urban County Council on Thursday night, urged the city to give the project more time to come together.

Before Tuesday's meeting, some Urban County Council members expressed concern that the council was not informed until late April 27 that the city was going to send the Webb Companies the demand letter.

"I feel like the council was left out of the loop," said Councilman Fred Brown. "I think we should have discussed it."

Council member Bill Farmer agreed. Council members asked the administration several questions about the status of CentrePointe during an April 27 work session, yet they were not told of the city's demand letter until later Tuesday.

"This has to do with the council being treated with respect," Farmer said.

Gray said the city was trying to act "prudentially" and was not intentionally trying to keep the council in the dark.

This story was originally published May 5, 2015 at 7:16 PM with the headline "Lexington officials meet in closed session under cloud of CentrePointe litigation threat."