Landowner sues city, building owner over eminent domain: St Louis (MO) Post-Dispatch, 5/26/06

By Robert Patrick

A downtown St. Louis landowner is suing the city and the owner of the building that sits on its property, Gentry's Landing, claiming they're abusing the eminent domain process to get the land for millions of dollars below market value.

The building owner, Integrity Real Estate Corp., has been working with the city since 2004 to get the property, the suit says. Landowner STL 400 North Fourth LLC, which is controlled by Florida developers Joe and John Seravalli, was told April 28 that it would have to sell by May 12 or face the use of eminent domain.

Lawyer Eric Martin said the Seravallis attempted to negotiate, but were unable to agree on a price.

Martin says Integrity used the threat of eminent domain like a "sword" during negotiations.

"They have made offers — we've just not really been in the same ballpark. I think that part of the problem is that they've got this eminent domain sword that they can use," Martin said.

"Why negotiate … when (using eminent domain) you can sweep in and buy the property?" he asked.

The Gentry's Landing building is in the 400 block of North Fourth Street. The Seravallis also own the land under two other parcels in that block, the Mansion House and the Radisson hotel.

The lawsuit says Integrity "conspired" to use the eminent domain process to get the property below fair market value. The suit also says the city is attempting to use a 1989 ordinance declaring the property blighted. That ordinance expired in 1997, the suit says.

Bob Denlow, another Seravalli lawyer, goes further, saying that allowing the city to become involved in a private negotiation means few downtown properties are safe.

Denlow said the Seravallis paid $8 million for the land under all three parcels, and that he's heard rumblings from all of the building owners about using eminent domain to take the land.

Peter McCann, Integrity's president, could not be reached for comment Friday afternoon. His lawyer, a lawyer for the Land Clearance for Redevelopment Authority, Deputy Mayor Barbara Geisman and a mayoral spokesman also could not be reached.

Last fall, McCann and others involved in the planned redevelopment of all the buildings on the Seravalli land said the work couldn't be financed without ownership of the land. McCann is planning a renovation of the residential building and the addition of a new residential building, both of which would become condominiums.

McCann said the property, which includes the landmark 28-story residential tower, a three-story commercial building and part ownership in the 1,700-space underground parking garage, looks "tired" and needs reviving back to luxury status. He said since purchasing the buildings in 1989, he had invested $19 million.

St Louis Post-Dispatch: www.stltoday.com