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Developer sues NKU, Highland Heights for ‘scuttling’ a 16-year, $112m project at campus’ entrance

By Jack Brammer
NKy Tribune reporter

A large development firm is suing Northern Kentucky University, its president, Ashish Vaidya, and the city of Highland Heights for allegedly scuttling a 16-year, $112 million building project at the main entrance of NKU’s campus.

In a 24-page lawsuit filed Tuesday in Franklin Circuit Court in Frankfort, Fairmount Properties of Orange Valley, Ohio, in northeast Ohio, is seeking monetary damages in excess of $6 million for breach of contract for the deal.

The suit claims Fairmount Properties was to build a mixed-use commercial and residential development at the main entrance of NKU’s campus known as Northern Pointe.

Defendants in the suit responded with displeasure.

“It is disappointing that Fairmount would rather file a lawsuit over this project than actually complete it. Instead of building the vibrant development it promised, and years after it was selected, Fairmount has left NKU with nothing but costs, delays, and a vacant site.

Conceptual rendering of the project. (NKU)

“Fairmount’s allegations are false, and NKU will vigorously advance its interests in this litigation,” Steve Franzen, city attorney for Highland Heights, said, “I don’t think the suit is well-taken. We will defend ourselves.”

Adam Fishman principal of Fairmount Properties, which does business as FPNKU in Kentucky, said, “We have been good partners, we have done everything required of us in the lease agreement and we have been repeatedly obstructed in moving this development forward.”

Fishman said after many months of extraordinary efforts to build this project, Fairmount faced numerous and costly delays and obstructions.

“We thought long and hard about filing a lawsuit against a university, its president, and the city as our work typically includes public-private partnerships. That said, their mercurial and blatant disregard for our contract, and total lack of communication to work through it, left us without any choice,” he said.

“We are moving forward to protect our rights under the lease agreement and be made whole financially for costs incurred while this project was thwarted by NKU, Dr. Vaidya, and the City of Highland Heights.”

Fishman said Northern Pointe would be well underway by now if NKU and other public officials had not put up numerous impediments.

Talks about the potential for this project and NKU requests for proposals to developers date back to 2005. At least two other developers attempted to work with NKU and were unsuccessful in moving the project forward.

Adam Fishman

“Given our experience with NKU, we are not surprised that prior efforts to redevelop this prime real estate failed,” Fishman said.

Fishman said NKU recently provided a statement to the Cincinnati Enquirer about the status of the project. He said NKU officials, who were in settlement talks with Fairmount, made a misleading and disingenuous statement to the press such as saying NKU and Fairmount are discussing “next steps” related to pandemic-related challenges in the commercial real estate industry.”

“While it may be convenient for NKU to blame the pandemic, the project being stalled can’t be reduced to such generalized ‘ongoing challenges in the real estate industry,’” Fishman said, “other than the difficulty to build and finance a hotel in the midst of the COVID-related deterioration of the hospitality industry.”

Fishman said Fairmount Properties acted in good faith on the project with a vision that was consistent with the request for proposals.

He noted that Fairmount had completed the first phase of the project – the $30 million St. Elizabeth Medical Office building on time and on budget – and retail pre-leasing efforts for the Northern Pointe project were “tracking toward a vibrant mixed-use district, with a range of dining and retail options.

Fairmount arranged financing for Phase 2 of the project, and “the financial structure would have been enormously beneficial to NKU,” Fishman said.

Fishman said NKU, as the only governing authority with approval rights, asked Fairmount to work with the city and county – “who were not parties to the lease agreement and were adding layers of costly delays, additional design work and unrealistic expectations for the hotel which was not feasible in the middle of the pandemic.

NKU President Ashish Vaidya

“We tried to be cooperative with all and incurred significant costs in the process.”

Fishman said given Fairmount’s substantial progress with all aspects of the project, we were “surprised that NKU abruptly pulled the plug on the project.”

Fairmount has created over $1 billion in mixed-use developments with a specialty in creating thriving college towns, he said.

“We are disappointed the project has not come to fruition and we have never experienced anything like this in our company’s history,” Fishman said. “That said, for the good of the region, we sincerely hope this project goes forward.”

As of late Tuesday, the case had not been assigned to a specific judge in Franklin Circuit Court.

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