A judge in Williamson County has blocked a potential obstacle that threatened to derail the redevelopment of Franklin's A-Game Sportsplex into office space.
Judge Michael Binkley, of the county's chancery court, denied an injunction sought by a volleyball club and hockey team that rent time and space at the facility. The building's owners have a $16 million purchase contract from Cincinnati-based developer Al. Neyer, which has announced plans for a $48 million overhaul that would turn the facility into 175,000 square feet of office space, and add a parking garage. It would be the company's debut project in Middle Tennessee, indicative of the wave of out-of-state developers pouring into the market - supplying a huge chunk of office space into a county that is the fastest-growing in the entire state and also experiencing historic shortfalls of office space available to rent, which makes it tougher for businesses to grow and expand there.
The dispute centers on allegations from each side that the other violated terms of their respective leases. Lawyers for the owners of A-Game Sportsplex warned in court that Al. Neyer would walk away from the deal if the judge ruled in favor of the sports teams. At that point, given the facility's mounting operating losses, lenders would have foreclosed on the property, the lawyers said.
"Although plaintiffs could have probably succeeded on the merits, they have not proven they would suffer irreparable harm if the injunction were not granted," Binkley wrote in his ruling.
Binkley ruled that the consequences for the sports teams, if the facility closed, were "less severe" and "not as significant" as the consequences for the A-Game's current owners if they were required to continue operating and uphold the leases.
"The court finds the defendants are losing a great deal of money per month and are on the verge of losing the property to foreclosure," Binkley wrote, citing concerns that an injunction "would undermine the transaction between defendants and Neyer, and require defendants to further jeopardize their business by remaining open."
"It is an important matter of public concern for parties to uphold the terms of their agreements. On the other hand, public interest supports not prohibiting failing businesses from liquidating their assets simply because doing so would injure another party," Binkley added.
It was not immediately clear whether the sports teams will appeal, or if the parties will be able to come to terms on some sort of agreement to resolve the issue.
"We are exploring our options, while recognizing that our primary purpose is to protect the rights of our clubs - and our kids - to play their respective sports," said Kevin Baltz, an attorney at Butler Snow LLP representing the teams.
A. Scott Derrick, an attorney with Gullett Sanford Robinson & Martin PLLC who represents the ownership of the sportsplex, declined comment.
Al. Neyer is not a party in the lawsuit, but of course is watching the situation closely. "We won't have a whole lot to say until they come to a resolution," said company spokeswoman Katy Crossen.
The judge's ruling revealed that the real estate broker representing the facility's ownership has received a letter of intent from a Louis Willhoit, of an entity named RCP-Sportsplex, to buy the property if the deal with Neyer does not happen.
"The court is not convinced that RCP-Sportsplex's letter of intent ... would necessarily result in a consummated transaction," Binkley wrote.
Al. Neyer was scheduled to close on the 20-acre property by Dec. 31, but the lawsuit delayed that process. The agreed-upon purchase price with Al. Neyer is almost twice what the facility's owners paid in 2008. That said, according to court filings, that payday would not be enough to cover all of the owners' debts. The venture has never been profitable, and "currently, the sportsplex is running at an operating shortfall of approximately $72,000 per month," according to a filing from attorneys for the building's owners.
According to court papers, Al. Neyer was one of three bidders for the property, and the only one who did not plan to continue operations as a sports venue. Al. Neyer has agreed to let both teams finish their seasons, which run through March, according to court papers.