Velocity’s Bristol Development Sues CSX for $2.5 mil

Velocity in the Gulch

Velocity in the Gulch

This article entitled “Gulch condo development sues CSX” appeared in the Nashville Post on July the 31th, 2009. The author is Kyle Swenson:

“The Velocity, the newest piece of The Gulch’s growing line of high-end condos and mixed-use projects, has launched a legal squabble with rail company CSX Transportation, accusing the latter of not paying for environmental clean-up costs.

The litigation, filed this week in U.S. District Court, stems from an agreement put in place when Bristol Development, the project’s developers, originally purchased The Gulch property from the Virginia-based rail giant in 2007. According to the filing, an August 1998 soil test feasibility study by the Tennessee Department of Environment and Conservation found high levels of arsenic, lead and chemicals in the area’s surface and subsurface soil.

As a result, the agency recommended that any plans for construction on the site be preceded by an environmental clean-up. The two options suggested were “capping,” which is when contaminated surfaces are “covered by some type of permanent structure, thus eliminating the exposure pathway and any associated excess risk,” or the removal of the contaminated material from the area.

The suit states that, as part of the purchase agreement between CSX and Bristol, a specific environmental clause was included. This provision acknowledged the need for a clean-up, and states the “Seller [CSX] shall reimburse Buyer [Velocity developers] for” that clean up and will “hold Buyer harmless for any and all costs, expenses, charges, fees, fines, liabilities, claims, duties and obligations related to the environmental condition of the Premises at the times of transfer to Buyer.”

Throughout the construction process, according to the filing, the Velocity paid for the “excavating, removing, hauling and disposing of surface and subsurface soil” which was contaminated as well as more capping work. The developer’s total cost was more than $2.5 million, an amount invoiced to CSX. The suit alleges the company has yet to pay and the failure represents a breach “of CSX’s duties and obligations under the Environmental Agreement.”

The project’s developers also are suing for the damages no less that the amount owed. Calls to the Velocity’s attorneys — Woody Woodruff, Michael K. Stagg and Elieen Burkhalter Smith of Waller Lansden Dortch & Davis — and CSX were not immediately returned.”

We’re not exactly sure what this means for the project and do not know if this will affect the buyers currently under contract.

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