VK Corporation accepts council’s counteroffer for land; $8M settlement plus legal fees
After two years of legal wrangling, the VK Corporation has accepted an $8 million offer for land along Nicholas Parkway that Cape Coral plans to use for a new police headquarters.
William Moore, the attorney VK hired to deal with the proceedings, confirmed Wednesday that his client agreed to a counteroffer from the City Council on Tuesday afternoon.
“It’s a done deal,” said Mayor Eric Feichthaler.
The city acquired the land in a December 2006 quick-take, just months before voters rejected a plan to build a $110 million public safety facility on the property. Lawyers for the city and VK signed off on an $8.4 million agreement at a January mediation session, but informal conversation slashed the deal down to $8.2 million.
On Monday, the council sent an $8 million counteroffer to VK for the land with an additional $400,000 to cover legal expenses.
“That was a difficult decision and the client’s just decided to put this behind them and move on,” said Moore. “They gritted their teeth and accepted it.”
Bringing the case to trial could have cost the city more as any portion of a jury award above the court deposit would bear interest of 11 percent per year from December 2006 onward. At Monday’s council meeting, Assistant City Attorney Mark Lupe said the $8 million settlement would cost the city the same as going to trial with the jury deciding on a $7.37 million verdict.
The $400,000 in legal fees the city will pay was an additional concession by VK as a settlement of this magnitude normally generates a $625,580 award, according to Florida statute. But the development firm still stands to make a substantial profit on its investment as it bought the land for less than $2 million about a year before the city acquired it.
“We had a way to get out of this burden through the McGarvey proposal,” said Feichthaler, referring to a plan to place a new police headquarters along Pine Island Road and allowing a development firm to pick up the tab for the VK site. “I certainly was not happy that we acquired this property at all. It was a mistake, in retrospect.”
The mayor said city staff convinced him and the rest of City Council in 2006 that the VK site was necessary for a new public safety building. Feichthaler said the purchase at the height of the real estate boom is regrettable, but he still believes the land will be a valuable asset to the city.
“It’s going to be a good thing that we have it; unfortunately it cost a bit more than anticipated,” he said.
Councilmember Eric Grill is rueful that the city did not press the issue further with VK and either take the case to trial or offer less money.
“I think it was a desperate move on VK’s part,” he said of the settlement.
But with the issued concluded, Grill said he is on board with moving forward and determining what will go on the site.