According to Halsey Minor, owner of the Landmark Hotel, the results of the arbitration hearing between him and former hotel developer Lee Danielson, which took place from April 19 to 23 at the Omni Hotel Downtown, favor Minor.
Minor and Danielson have been at odds over the construction and management of the hotel almost from its inception. In November 2007, both parties entered into a Development Agreement, in which Danielson was set to represent Minor as his agent on the hotel.
A clause in this agreement, according to a document sent to C-VILLE by Minor, provided that in the case of a dispute between Minor and Danielson, arbitration would be called upon to settle it. The document Minor provided was signed by Arbitrator Donald Kent, on letterhead from The McCammon Group, a Richmond-based consulting firm.
In that document, Minor sought damages in excess of $12 million, and indemnification for future losses. Hotel Charlottesville, presumably meaning Danielson and called the Agent in the arbitration, countered with $5.6 million in damages. The arbitrator awarded Minor $4.2 million in damages, $2.24 million in legal fees and any additional legal fees and potential losses Minor will encounter as a result of Hotel Charlottesville’s "conduct." Read below the photo for more.
In his ruling, the arbitrator found that Danielson was not "personally liable." However, Hotel Charlottesville’s desire to build a boutique hotel on the Downtown Mall was well documented. "In order to convince the Owner to invest, the Agent misrepresented the projected construction costs of the project," reads the document.
"This story has been told in so many different and unfortunately incorrect ways," Minor tells C-VILLE in an interview. "I think that this judgment shows that the developer did not do his job and his partner, the bank, they did not do their job."
Danielson thinks otherwise. "The entire team associated with the project is shocked at the result. I am deeply saddened for the community of Charlottesville. I am truly sorry for the pain I have caused the community," he says.
"It’s up in the air what can be done with the Landmark, given all that’s happened. I would love to finish it, but there are so many questions in the air," says Minor. He adds that the hotel will either be completed or torn down.
"I had no intention of it even being in that condition and I think that if I am guilty of something is simply putting up the money to be a catalyst to get the project started, and probably not having done adequate research on both the developer and the banks," says Minor. "I made poor decisions in who I entrusted my money with."
And money has been the main culprit in the Landmark debacle.
In May 2009, the Federal Deposit Insurance Corp. (FDIC) seized Atlanta-based Silverton Bank, from which Minor had borrowed $23.7 million to finance the hotel with the hope of finding buyers. One month later, the FDIC announced it had taken over the bankrupt bank. Minor argues that for a $10 million construction loan he got from now-defunct Silverton Bank, he has paid $5 million in legal fees, and counting.
"Thank God I am actually able to withstand having to fight, not this bank, which would be bad enough, but I am fighting the federal government," says Minor.
Minor is no stranger to public disputes. He recently won $8.57 million in damages from Christie’s International auction house. The proceeding judge found Christie’s guilty of fraud, but awarded the auction house $1.5 million in damages for Minor’s breach of contract.
About both outcomes, Minor says he feels satisfied. "It’s like if Christie’s wouldn’t have been found guilty of fraud, I would have literally bought a plane ticket to Argentina, because at least nobody expects justice there," he says. "If I hadn’t gotten this ruling, I would have been very disappointed."
Minor has relied on the legal system in many of his disputes and he is sanguine about its merits. "You have no choice but to put faith in the system. And it’s a system that I have learned," he says. "The only way you can play in this system is if you are a large corporation and if you have enough money to stay in it when the federal government tries to squash you."