The construction conflict between the city of Rock Hill, South Carolina and the Carolina Panthers NFL franchise continues to drag on. In a legal response to developer GT Real Estate’s bankruptcy proceedings, Rock Hill is looking for $20 million in financial damages and a jury trial connected to the abandonment of the Panthers’ $800 million Training Facility and Headquarters project earlier this year.
According to the response, the main reason for the financial request is an alleged breach of contract on the part of GT Real Estate, spurred on by disagreements over bonds that were meant to be major contributions to the project’s completion. Rock Hill is accusing GT Real Estate of failing to provide information and project details that would have aided the bond process, therefore leading to the project’s failure.
The issue of these bonds previously came up as a key instigator to the project’s original pause in March 2022 after Panthers owner David Tepper alleged that the city missed a $200 million bond payment.
As part of its legal response, the city is also alleging possible fraud on GT Real Estate’s part, saying that “the circumstances surrounding [GT Real Estate’s] breach as described herein demonstrate that [the company] had fraudulent intent.”
Rock Hill claims that the delays over the project stemmed from the bonds themselves, as certain tax statuses would create the value for the bonds and thus were key to the original agreement between the city and developers.
As per Rock Hill’s complaint, “The City repeatedly communicated to GTRE that the marketability of the bonds would be materially improved if GTRE would provide additional, specific development details regarding the private investment in the Project and identify the master developer for the Project, but GTRE repeatedly failed to do so.”
The response goes on to note the importance of the tax status of the bonds, saying that ”GTRE was advised on more than one occasion that the marketability of the bonds would be severely hampered if the bonds could not be issued on federal tax-exempt basis.”
Of course, representatives for GT Real Estate disagree, blaming Rock Hill’s decision to not issue the bonds. A court filing made in response to Rock Hill claimed “The city failed to issue any amount of bonds by the contractually agreed February 26, 2021…Indeed, more than a year later, the city still had not issued a single dollar of bonds, despite the debtor’s enormous investment in the project. The city’s failure to issue any bonds caused the debtor to suspend construction on the project.”
“It seems that the true purpose of the adversary complaint is to level a host of false and incendiary allegations at the debtor and its principals,” the legal response continued. “These allegations are utterly meritless.”
This is just the latest episode in months of turmoil surrounding what was supposed to be a significant project for both parties.
After disagreements over bonds resulted in Tepper Sports & Entertainment announcing that the company had paused work on the project in March 2022, this pause quickly became permanent, as little over a month later GT Real Estate announced that the company had terminated its agreement with Rock Hill to build the project.
More disputes have spawned since the project’s termination, too. GT Real Estate filed for Chapter 11 bankruptcy after the dissolution of the project. In July 2022, joint venture contractor Mascaro/ Barton Malow claimed that it may be owed $80 million amidst the commotion while claiming that the Carolina Panthers organization itself could be responsible for shouldering some of the debt.
In August 2022, GT Real Estate proposed a plan to reorganize its debt and pay over $82 million to creditors, including Rock Hill.
Mascaro/ Barton Malow attorney Mike Roeschenthaler expressed faith in the proposal, saying “We believe the plan demonstrates a good faith effort by the debtor…Progress has been made and we look forward to bringing the case to a successful close.” However, this latest legal challenge puts the situation in more jeopardy.