Thursday, January 17, 2008

01/15 - Jekyll project upheld in court > Business
Judge rejects challenge by losing bidder for redevelopment deal on island.

By Dan Chapman
The Atlanta Journal-Constitution
Published on: 01/15/08
A Fulton County Superior Court judge on Monday allowed the large-scale redevelopment of Jekyll Island to go forward, turning back a challenge from a losing bidder who claimed the state unfairly awarded the contract.

Judge Jerry Baxter's ruling lets Linger Longer Communities continue with its $352 million condo-hotel-retail project in the state park near Brunswick. The Greensboro, Ga.-based developer plans 1,100 condo, hotel and time-share units fronting the Atlantic Ocean.

"Obviously we think the judge is correct on both grounds —- dismissing the complaint for lack of standing and denying the injunction for lack of merit," said Linger Longer attorney Emmet Bondurant, who argued alongside the counsel for the Jekyll Island Authority.

Wade Shealy Jr., whose company lost the bid, sued the authority after it awarded the contract in September. The Jekyll Island Authority and Linger Longer prevailed Monday when Baxter determined the process was fair. A disappointed Shealy said he'll likely appeal Baxter's decision to deny the injunction.

"It's not over. We still believe the process was flawed, and we want to see it done right," said Shealy, who spent $925,000 on his bid.

The crux of Monday's decision revolved around how many acres were in play. In its request for proposals last year, the authority stipulated eight times that the "town center" project would encompass 45 acres. Shealy's Jekyll Island Revitalization Group and Trammell Crow Co., another bidder, adhered to the 45-acre parameter.

Linger Longer, however, used 64 acres in its plan. By using fewer acres, Shealy said, the degree of green space and density —- two major selection criteria —- was unfairly skewed.

The authority disagreed. Its attorney, George Zier, testified Monday that the bid for the "town center" site was fluid and allowed for the construction of hotel and parking, for example, beyond the 45 acres.

"That was perfectly permissible from day one, page one," Zier said. The bid by Shealy and partners "imploded of their own volition, not by anything the authority did. . . . They lost fair and square."

Zier also questioned whether Shealy's group could secure sufficient financing for the large-scale development.

Shealy and his attorneys labeled questions over financing and "standing" —- whether his group could legally challenge the bid —- as "red herrings" intended to distract from what they considered the central argument: development within 45 acres.

Baxter also questioned, during deliberations, whether the bid process was free of "some impropriety."

"The fact that everything says 45 acres and the winning bid says 64 acres ... that's the thing that sort of jumped out at me," he said.

Shealy says the authority intended all along to pick Linger Longer and that the surprise decision to accept its 64-acre proposal underscores the favoritism.

Baxter, after ruling in the state's favor, suggested the authority and Linger Longer slow the island's development until a higher court, if necessary, weighs in.

"That island is very special," the judge said. "All of those islands down there need to be protected."

Ed Boshears, an authority board member who attended the hearing, said Monday's ruling won't stem criticism of the state park's redevelopment.

"The authority needs to take heed of the judge's words and go very slowly," he said. "The process was fundamentally flawed, and the handling of it was not done in a proper manner. But the court has ruled based on the strict requirements of the law."

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