$4.1 Million Dollar Judgement Against Owner of Condemned Parking Garage
In July 2014 the parking garage at Tucker & Locust closed for repairs. It seemed routine at the time.
It turns out the damage to the post-tensioned structure was more extensive than originally known. Since my original July 2014 tweet, I’ve posted quite a bit about it:
- December 2014: Parking Garage Undergoing Time-Consuming Multi-Million Dollar Restoration; Businesses Closed, Jobs Lost
- April 2015: Parking Garage Repairs Halted, Emergency Structural Condemnation Issued
- July 2015: Car Hit Planters & Scaffolding Outside Condemned Parking Garage
- July 2015: Readers: New Building Should Replace Condemned Parking Garage
- January 2016: Court Documents Shed Some Light On Condemned Parking Garage
Central Parking System, who operated the garage, sued the owners — two LLCs that begin with Tucker Parking. Tucker Parking countersued.
On March 22nd Judge Dowd ruled:
JUDGMENT IN ACCORDANCE WITH THE FINDINGS OF FACT AND CONCLUSIONS OF LAW SET FORTH IN THE COURT’S ORDERS OF OCTOBER 13, 2015 AND JANUARY 21, 2016, WHICH THE COURT EXPRESSLY INCORPORATES HEREIN, THE COURT ENTERS JUDGMENT AS FOLLOWS:
1. BY AGREEMENT OF THE PARTIES, THE COURT DISMISSES PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC’S CLAIMS AGAINST DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC AND DECLARATORY JUDGMENT (COUNT I) AND BREACH OF LEASE (COUNT II) WITHOUT PREJUDICE.
So Central lost on their first two counts against Tucker. Let’s continue…
2. ON PLAINTIFF CENTRAL PARKING SYSTEM PARKING SYSTEM OF MISSOURI, LLC’S CLAIM AGAINST DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC FOR UNJUST ENRICHMENT (COUNT III), THE COURT ENTERS JUDGMENT IN FAVOR OF PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC AND AGAINST DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC IN THE AMOUNT OF FOUR MILLION ONE HUNDRED SIXTY-ONE THOUSAND FOUR HUNDRED TWENTY-FOUR DOLLARS AND SEVENTY-SIX CENTS ($4,161,424.76).
Ouch. What is “unjust enrichment” anyway? The Wax Legal Dictionary defines it as:
The retention of a benefit conferred by another, that is not intended as a gift and is not legally justifiable, without offering compensation, in circumstances where compensation is reasonably expected.
The elements of a cause of action for unjust enrichment are: the enrichment of the party accused of unjust enrichment; that such enrichment was at the expense of the party seeking restitution; and the circumstances were such that in equity and good conscience restitution should be made. An additional requirement is that the party accused of unjust enrichment must know of the benefit conferred; to ensure that the benefit was not foisted on the recipient and is something for which compensation is reasonably expected.
Recovery on a theory of unjust enrichment typically occurs where there was no contract between the parties, or a contract turns out to be invalid.
The specifics of this principal aren’t clear to me from the ruling.
3. ON DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC’S COUNTERCLAIM AGAINST PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC FOR BREACH OF LEASE (COUNT I), THE COURT FINDS IN FAVOR OF PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC IN PART AND IN FAVOR OF DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC IN PART. SPECIFICALLY, TO THE EXTENT DEFENDANTS BASE THEIR BREACH OF LEASE CLAIM ON CENTRAL PARKING’S ALLEGED OBLIGATION TO REPAIR THE GARAGE’S POST-TENSIONING SYSTEM BEFORE THE END OF THE LEASE TERM, THE COURT FINDS IN FAVOR OF PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI LLC. TO THE EXTENT DEFENDANTS BASED THEIR BREACH OF LEASE CLAIM ON CENTRAL PARKING’S ALLEGED OBLIGATION TO REPAIR DETERIORATION OR DELAMINATION TO THE GARAGE’S CONCRETE SURFACE BEFORE THE END OF THE LEASE TERM, THE COURT FINDS IN FAVOR OF DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC. HOWEVER, THE COURT FINDS THAT TUCKER CANNOT PROVE ANY DAMAGES FOR THIS BREACH BECAUSE, AS SET FORTH IN THE COURT’S ORDER OF OCTOBER 13, 2015, THE GARAGE IS AT THE END OF ITS USEFUL LIFE, THE GARAGE’S POST-TENSIONING SYSTEM IS BEYOND REPAIR, AND THE FAILURE OF THE POST-TENSIONING SYSTEM WAS DUE TO NORMAL OR ORDINARY “WEAR AND TEAR.” AS A RESULT, THE COURT ENTERS JUDGMENT IN FAVOR OF PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC AND AGAINST DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC.
Above we can get the message — the garage can’t be repaired.
4. ON DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC’S COUNTERCLAIMS AGAINST PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC FOR WASTE (COUNT III), NEGLIGENCE (COUNT IV), AND DECLARATORY JUDGMENT (COUNT V), THE COURT ENTERS JUDGMENT IN FAVOR OF PLAINTIFF CENTRAL PARKING SYSTEM OF MISSOURI, LLC.
5. BY AGREEMENT OF THE PARTIES, THE COURT DISMISSES DEFNDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKING EQUITIES, LLC’S COUNTERCLAIM AGAINST CENTRAL PARKING CORPORATION FOR SUIT ON GUARANTY (COUNTII), WITHOUT PREJUDICE.
6. COSTS ARE ASSESSED AGAINST DEFENDANTS TUCKER PARKING HOLDINGS, LLC AND TUCKER PARKINGS EQUITIES, LLC PURSUANT TO RULE 77.01. SO ORDERED: 32929-JUDGE DAVID L. DOWD
So who owns this garage, who is behind these two Tucker Parking LLCs?
Both were created in Missouri on April 19, 2007, indicating a home state in Delaware. TUCKER PARKING EQUITIES LLC was formed in Delaware two days earlier. City records indicate tax bills are mailed to 24 Church Street, Montclair NJ.
The legal battle may continue for a while. Still, we can accept some facts:
- The existing garage is unusable, it’ll need to be razed eventually.
- The owner isn’t in St. Louis.
- The owner of the adjacent former Post-Dispatch building would like to have parking for tenant use.
- Many downtown residents, myself included, don’t want any surface parking or even more obvious parking garages.
I contacted 7th Ward Alderman Jack Coatar via email, who said:
It is my understanding that this garage has reached the end of its lifespan and that it would be extremely expensive to shore up this garage and make it safe to use. I would like to see the garage demolished and replaced with another parking structure that includes a first floor retail component.
I would like the development committee of the Downtown Neighborhood Association’s Planning and Zoning Committee to take an active role in the planning for any future use of this site.
If a new garage is built, I’d like it to be enclosed with an exhaust system rather than being open.
— Steve Patterson
Clearly this parkade and it’s parking spots aren’t in demand or they’d have proceeded with replacing it already (long before legal action). I agree with Mr. Coatar, demolish it, but PLEASE don’t build another one!
If it’s unsound, tear it down! If there’s demand for more structured parking, a new parking structure will be constructed; if not, surface parking is the most likely scenario – see Ballpark Village, or multiple other sites around the CBD. Owners are not an unlimited fountain of money – people don’t build dense, urban, mixed-use projects (like you envision) because they’re either clueless or callous, they don’t build them because tenants don’t see the value in paying 50% more, whether it’s for a parking spot, an apartment, a storefront or an office! Until rents rise, for all of these, to the levels seen in cities where the projects you envision ARE happening, they will remain just visions, here. locally. I hate to burst your bubble, but money talks!
In the real world things just don’t magically happen the way you think they do. Out of state investment trusts buy real estate to generate revenue. Once the revenue ceases they move on — unloading the property if they can. The building next door was connected to this garage so tenants could park and get to their offices. The building owner may not have the capital to buy the garage, raze it, and build a new one. Doesn’t mean the market doesn’t exist.
This may be a case where the Parking Czar (Treasurer) could help.
Doesn’t fit into this treasurer’s M.O.!
In this case, a PROPERLY-CONSTRUCTED , WELL-MAINTAINED garage doesn’t typically meet this end, after so relatively few years of use. Applying deck coatings and sealers to MINIMIZE water from penetrating the concrete and thus corroding the reinforcing steel, along with regular restoration efforts , will preserve any parking structure. Blitz maintenance efforts are typically ineffective, in the long-run. Garages cannot be treated like red-headed stepchildren.
The Treasurer can build garages, where needed. The case could be made a new garage is needed to support the renovated building next door. When it was renovated it had adjacent parking, but now tenants might seek space elsewhere.
If Larry were still sitting in the Treasurer’s chair, there may be some hope. This treasurer apparently doesn’t have the savvy or the interest to put together a team.
I’ll repeat – it boils down to financial calculations, and you’re confirming that! And why should private property owners be relying on public investments (from the “parking czar”) to increase the marketability of their small number of buildings?! If it makes financial sense, it will likely happen; if not I’m betting on a surface paking lot . . .
If you’d take off your rose-tinted free-market glasses you’d see that while something may make financial sense, that doesn’t mean that an entity has the capital to act on it. Individuals and businesses must pass up good opportunities on a daily basis.
Let me give you a micro example. We recently bought a giant package of toilet paper at Costco — 1,593.7 sq ft for $15.99. Culinaria has packages on sale — 10 for $10, or $1 each — for 88 sq ft. Buying in bulk is cheaper per sq ft, the big package would cost $18.11 if priced like the sale price. It makes sense to buy the larger package. Still, not everyone has a Costco membership — not everyone has the cash flow to buy months work of TP in advance. What makes logical financial sense isn’t always an option.
In other cases people don’t always have the skills to work through the situation. A person/entity that buys/restores a historic building might not know what it takes to buy a failed garage, raze it, replace it — putting together a business plan to get financing. It may make sense, they might have the capital — doesn’t mean they have the skill set to make it happen.
I agree that the must exist before investment in a new garage should and will occur. But the treasurer does have the ability to apply bond proceeds with lower interest rates to offset the initial losses that may be realized in any new garage development, in (informed) hopes that the new garage will attract new developments. Cases in point: the Marquette garage which was later sold to the Feds and was responsible for keeping the Feds in downtown STL; the 7th Street Garage that filled the void in the area to meet parking demands and eventually will improve the potential for development of the two historic structures across the street; the Nine North Garage which solidified the deal with the developer of the Nine North Condo project; the Argyle Garage which made parking so much easier for the Chase Apartments’ residents and improved parking resources for local daytime business patrons and late-night party folks, for festivals, etc. The Kiel Garage, as another example, certainly plays a big role to provide convenient and (relatively) safe parking for Blues supporters. Imagine where these fans would have to park their cars if both the Kiel and the Justice Center garages were pizza joints that specialized in serving pizza made without Provel.
I wouldn’t look for any new structure on that property for decades, earlier only if the STL economy recovers and after all the other empty parcels are developed–unless there is a business entity that just can’t live without that location, willing to pay the price. Post tensioned garage demolition is costly and time consuming. After the PT cables are de-tensioned, the concrete columns, beams, girders, and crash walls (filled with densely placed, large diameter rebar (#9, 10 and 12 are not uncommon) are then chipped away (and the rebar is torched) in manageable chunks for haul off. Even the decks are designed with two mats of heavy rebar placed at approx 8″ centers, both ways, in addition to the steel PT cables. Then the underground structure has to be removed. STL is a 3-4 earthquake zone, even higher in areas (like certain areas of downtown STL and anywhere near bodies of flowing water, areas resembling the highest levels of seismicity as found in parts of India for example) where the phenomena of liquefaction is possible (sudden reduction in soil strength due in part to saturated/non-cohesive/clay soils conditions which surface when earthquake shaking occurs). Where liquefaction is known or even possible, a substantial underground pier and grade beam network exists especially in high-rise or heavy-use construction, making demo and reuse of the parcel quite expensive just because of the extensive and associated costs of concrete removal. Often underground concrete is not removed and is left in place for the next developer to deal with. Conditions are then ripe for a surface parking lot.