A federal judge ruled Tuesday that Baton Rouge developer J.T. “Tommy” Spinosa and three of his companies must pay $201.9 million to an Ohio lender for loans and interest owed on the Perkins Rowe mixed-use project.
U.S. District Judge James J. Brady added in his final judgment that Spinosa and his firms also must pay Cleveland-based KeyBank National Association an additional $32,510 in interest for each day the debt remains unpaid.
Brady ruled last month that KeyBank could foreclose on the development, but he did not specify the total debt until Tuesday.
Mark R. Beebe, a New Orleans attorney who serves as Spinosa’s lead counsel in the 37-month-old case, said Tuesday the developer and his Perkins Rowe companies will ask the 5th U.S. Circuit Court of Appeals to reverse Brady’s decision.
“The Perkins Rowe defendants disagree with the court’s judgment in several respects,” Beebe said. Beebe said the most significant of those disagreements is over a 21-year-old decision by the U.S. Supreme Court that shows the dispute should have been litigated in state district court rather than federal court.
Brady has now rejected that argument three times.
The judge, Beebe insisted, “is without the authority to enter this judgment and wrest Perkins Rowe from the defendants.”
KeyBank representatives in Cleveland and New York were asked in telephone and email messages for comment, but did not issue any statement.
KeyBank first sued Spinosa in July 2009, alleging that the developer had not made a payment on the unfinished project since October 2008.
Spinosa and his Perkins Rowe Associates LLC, Perkins Rowe Associates II LLC, and Perkins Rowe Block A Condominiums LLC, had filed written objections to KeyBank’s request for the final judgment in specific dollar amounts. But those objections were filed under seal, meaning they are withheld from public view.
Brady dismissed Spinosa’s public allegation that Chicago-based management firm Jones Lang LaSalle Americas Inc., appointed by the judge in 2009 as Perkins Rowe’s operator, had mismanaged the mixed-use development since that time.
Laura J. Mimura, spokeswoman for KeyBank, said last month: “Things are going well (at Perkins Rowe), and we expect that to continue.”
Brady has noted in court records that Perkins Rowe has turned a profit under Jones Lang LaSalle’s management.
The $201.9 million and the $32,510 in additional daily interest are not the only sums owed to KeyBank by Spinosa and his three companies, Brady ruled Tuesday. The judge ordered Spinosa and his firms to pay all of KeyBank’s court costs and attorney fees.
Court records show KeyBank loaned Spinosa’s companies $170 million to develop Perkins Rowe near the intersection of Bluebonnet Boulevard and Perkins Road.
More than $8 million of that debt had been retired before payments ceased in October 2008.
But Brady’s ruling showed that interest owed on the remaining principal of $161.4 million expanded the debt to $201.9 million by Aug. 15.
The judge added that Spinosa, who personally guaranteed the debt, and his Perkins Rowe companies owe KeyBank another $32,510 in interest for each day the loan remains unpaid after Aug. 15.
Spinosa’s ambitious project included space for 229 apartments, 88 condominiums, more than 60 shops and restaurants, a movie complex, grocery store, pharmacy, a book store, two parks and business offices.
Some of the available space has yet to be finished, but many of the restaurants, shops and stores appear to attract significant crowds on a daily basis.
However, Spinosa still controls the supply of chilled water that provides air conditioning for the residential and commercial tenants at Perkins Rowe.
A dispute between Spinosa and KeyBank over control of that chilled water remains pending in Brady’s court.
Both Spinosa and Beebe have stated in the past that chilled water will not be denied to any Perkins Rowe tenant who continues to pay his or her monthly bill for that service.
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