Developer seeks $1.2 M from Friendswood over land dispute

John Suayan, Galveston Bureau Nov. 24, 2009, 7:37am

GALVESTON � A real estate developer accuses the city of Friendswood of refusing and failing to purchase tracts of land despite signing an agreement that it would, recent court documents say.

Wight Realty Interests' lawsuit states the defendant promised to buy two pieces of land for the purpose of building recreational facilities as well as acquire another parcel, but exited the contract without making the transactions or compensating the plaintiff.

"WRI Ltd. has suffered damages as a result of the city's unexcused disregard for its obligations and duties," the suit says.

The plaintiff estimates it lost $1.2 million due to the termination.

The case was filed Nov. 18 in Galveston County District Court.

Representatives from the city approached the plaintiff's president in July 2008 about the possibility of developing a youth recreational sports facility for the benefit of the citizens of Friendswood, the original petition says.

It also shows that WRI Ltd. owned a tract of land that, with the addition of two adjacent undeveloped tracts, the city thought would be exceptional for such a facility.

Both parties signed an earnest money contract, which was drafted by the city's attorney, a couple of months later.

Friendswood City Council voted unanimously to have the mayor execute said contract.

According to the agreement, WRI Ltd. could recover an agreed-upon sum as liquidated damages if the city terminated the contract.

It further provided that the plaintiff would acquire the two adjacent tracts and construct improvements on all of the property.

Each of the three tracts of land in question were labeled and assigned an opportunity loss value, which the city consented to pay along with the stipulated default/termination fee.

"WRI Ltd. relied on the city's representations that it had the authority to enter into the contract and purchase property or the city would pay an agreed-upon amount of liquidated damages," the suit says.

"By executing the contract, the city waived its governmental immunity from liability."

More than a year after the contract went in effect, the city attorney sent the plaintiff a letter announcing the defendant's intentions to abandon the agreement.

The plaintiff alleges it had already spent large sums of money on the project, claiming the city did not reimburse it.

"The city has not paid the agreed-upon termination damages to WRI Ltd.," the suit says.

WRI Ltd. points out that the termination damages totaled up to $1.2 million at the time the defendant abandoned the contract.

"Such loss is a natural, probable, and foreseeable consequence of the city's breach of its contractual obligations to WRI Ltd.," the suit says.

Represented by Sechrist-Duckers LLP, the plaintiff seeks to recover the unpaid damages.

Galveston County 405th District Court Judge Wayne Mallia is presiding over the case.

Case No. 09CV2123

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