You can fight city hall and win.
Cone Denim Entertainment Center owner Rocky Scarfone just proved it by agreeing to settle his lawsuit against the city for $735,000, plus a wider unobstructed easement, plus some land and concessions the city evidently threw in to sweeten the deal.
In addition, to make the deal work, the city agreed to pay Limelight nightclub $150,000 for its rights to the easement plus $35,000 in attorney fees.
So the cost to the city to buy the easement – which the City Council earlier voted to condemn and purchase for $55,000 – cost the city $920,000 plus some land and concessions, and the city will have to pay its own attorney fees.
The attorneys for the City of Greensboro evidently thought their case was so strong they didn’t bother to argue it in court, and three months later agree to a settlement where the city is paying right at $1 million for an easement that City Attorney Tom Carruthers told the City Council was worth $55,000.
The Greater Greensboro Entertainment Group LLC (GGEG) and the N Club LLC sued the City of Greensboro because the city had condemned an easement from the backdoor of Cone Denim Entertainment Center out to Davie Street. Cone Denim is owned by GGEG and leases the building owned by N Club LLC. Scarfone is the principal owner of both.
The payments from the city are actually divided up to $325,000 to GGEG, $325,000 to the N Club and $85,000 in attorney fees.
Greensboro had bought the parking lot behind Cone Denim for $1.1 million in June 2017 in order to build the February One Place-Westin Hotel parking deck. In July, City Manager Jim Westmoreland and Carruthers began a series of meetings with Scarfone and his attorney Amiel Rossabi to discuss the easement issue. The city offered $55,000 for the easement and the use of a 10-foot alley to East Market Street that would be blocked during construction of the parking deck and was at the time blocked by electrical equipment. As a concession, Carruthers and Westmoreland said the city would allow the buses and trucks with equipment for the entertainers to park on East Market Street, which is a far cry from the deal that the city made this week. Scarfone repeatedly said that he had to have access to the back of his building to stay in business.
The negotiations between Scarfone and the city did not result in an agreement and, on Dec. 19, the Greensboro City Council voted to take the easement by eminent domain, what is commonly called condemnation.
Scarfone filed suit against the city arguing that the true purpose of the parking deck was to provide parking for the Westin Hotel, which is to be built over and under a portion of the parking deck south of February One Place. Scarfone also requested a temporary restraining order (TRO), because once the parking deck was built, no reasonable accommodation could be made for his business.
On Jan. 29, North Carolina Superior Court Judge Andy Cromer heard the request for the TRO. Rossabi represented Scarfone, and it took him about an hour to present a condensed version of his case.
Bruce Ashley with Smith Moore Leatherwood represented the city and his presentation had to have been under 10 minutes. Sometimes shorter is better, but it certainly didn’t wow this judge, who has yet to make a ruling on the request for the TRO.
Actually, there was no need for Cromer to rule because the city had agreed not to start construction while the TRO decision was pending. So there was in effect a TRO in place without Cromer having to get involved.
It appears the city gave Scarfone everything he had been asking for from the beginning, plus a big wad of cash. He gets access to his back door through an easement to East Market Street. The easement won’t be closed during construction. A tour bus parking spot is being built for him in the parking deck complete with a lift to move equipment weighing up to 2,500 pounds. He has to rent the parking space, but it’s as close to the back of Cone Denim as possible, and getting his own lift is pretty cool.
The initial articles about the easement stated that the city missed the easements when researching the property before buying it. Carruthers, however, said that was not true and that the city knew the easements were there, but didn’t see them as a problem. Carruthers said that the city condemns easements all the time.
But this easement was different according to Scarfone because the city taking the easement and blocking the access to the back of his building would put him out of business.
Former City Councilmember Mike Barber, who took part in the negotiations from July until December when he left the City Council, said that the city’s attitude that it was simply going to take the easement seemed arrogant and misguided. It’s worth noting that after Barber was no longer involved, the city condemned the property and Scarfone sued.
The decision by Carruthers not to investigate the easement issues before purchasing the property and designing the deck delayed the project for at least six months and resulted in an additional cost of over $1 million.
Mayor Nancy Vaughan said, “I’m pleased that we were able to reach an amicable solution with Rocky and Amiel without redesigning the parking deck.” She added, “We’re still making the time frame that the Westin needs.”
The City Council should take a page from its own playbook and insist that its employees adhere to the same standards that the City Council requires of developers. When a developer comes before the City Council with a rezoning request, the developer is invariably asked how many contacts and meetings he has had with people in the community. In this case, the city bought the parking lot and designed the parking deck before contacting the business owners whose businesses would be affected by having a parking deck built right behind their buildings and cutting off vehicle access to the back of those buildings.
Then, when the city discovered that there was opposition, the city tried to strong arm the businesses into accepting that the city was going to do whatever the city wanted to do.
Barber said that early on he told Carruthers and Westmoreland that if they didn’t make some serious concessions Scarfone would sue and likely win.
It turned out Barber was right. Although Scarfone and Rossabi didn’t win the lawsuit, they didn’t have to. The city gave Scarfone what he told the City Council he needed before the property was condemned, and more.