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Nathan Baker

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2nd lawsuit filed against Model Mill developers, Chamber of Commerce

July 29th, 2014 11:31 pm by Nathan Baker

2nd lawsuit filed against Model Mill developers, Chamber of Commerce

The latest lawsuit was filed July 24 in Washington County Chancery Court by Howell Sherrod Jr. and a handful of other residents of the Tree Streets Neighborhood. (Nathan Baker/Johnson City Press)

A second legal attack against the development of the former Model Mill property was filed last week, this one complaining that Chamber of Commerce CEO Gary Mabrey misrepresented the organization’s intention for the dilapidated structure.

The latest lawsuit was filed July 24 in Washington County Chancery Court by Howell Sherrod Jr. and a handful of other residents of the Tree Streets Neighborhood against Mabrey, the Johnson City Chamber of Commerce and Evolve Development LLC, the North Carolina company planning to demolish the former flour mill and the nearby Mize Farm & Garden Supply building and erect a five-building apartment complex in their stead.

In the suit, which lists Sherrod as legal representation, the filers cite a letter from the Tennessee Historical Commission to city leaders calling the mill a valuable historic landmark, and its demolition violates the city’s commitment to the Main Street Communities principles and the Chamber’s mission statement to “promote business, enhance economic and community development and serve as a catalyst for improving the overall quality of life in the community and region.”

The suit also alleges that Mabrey and the Chamber initially solicited charitable donations through a nonprofit organization to assist in the relocation and development of the mill property, but then listed the land for sale at an asking price of $1.8 million, more than four times what the Chamber paid for it.

“Based upon the misrepresentations made by Mabrey and the Chamber that they were conducting a capital campaign to relocate the Chamber and redevelop the mill, Mabrey and the Chamber collected over $200,000 in public donations which they represented to be taxable donations which were in fact donations fraudulently obtained to finance a ‘for profit’ real property transaction,” the lawsuit states.

The filers also claim Mabrey acted as an advocate for Evolve through the property’s rezoning process, saying early on that retail could have a space on the property, that the apartments would not be marketed to college students and that no other options were viable to develop the land, all of which Sherrod writes were untrue.

“In fact, if the Chamber and Mabrey had not been intent on making a huge profit off the sale of the mill property, they could have found a developer who could have rehabilitated the mill,” the suit reads.

When reached Monday by phone, Mabrey confirmed he had been served with the legal papers, but declined to comment on the lawsuit, claiming a confidentiality clause in a contract with Evolve.

Attorney Tom McKee, who has been representing the development company locally, likewise said he couldn’t comment because he had not yet analyzed the documents.

The lawsuit claims that the “rent by the room” apartments Evolve plans to build will cause harm to residents of surrounding neighborhoods and nearby business owners by increasing traffic and noise, negatively affecting property value and creating a general nuisance.

For that harm, the lawsuit’s author asks a Chancery Court judge to impose a temporary restraining order and permanent injunction against Mabrey, the Chamber and Evolve to bar them from constructing the planned complex.

The July suit is the second legal action filed against the development in Chancery Court.

Last month, attorney and active Southside Neighborhood Organization member Amber Floyd Lee, filed suit against Evolve and the city Board of Zoning Appeals, claiming a mishandling of the board’s variance approval process allowing the developer to build parking spaces between the site’s structures and West State of Franklin Road.

McKee admitted the notification process outlined in Johnson City’s code was not followed and initiated and received a second variance request for the property against Lee’s protestations.

According to a Chancery Court Clerk, neither the first suit or the latest have been set for a hearing date yet.

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