Real estate

Lawsuit against Blugold Real Estate continues

June 26 – EAU CLAIRE – A lawsuit filed by local developers against the real estate arm of the UW-Eau Claire Foundation will continue after a judge ruled on Friday that it should not be thrown out.

Blugold Real Estate Foundation has sought the dismissal of the lawsuit, which was filed in January by companies owned by local developers Robb Majeski and Peter Hoeft over an exclusive deal they were to develop part of the site where the complex of county materials is under construction.

Eau Claire County Judge Emily Long dismissed an allegation of misrepresentation that Southside Holdings and Big River Education Center alleged against Blugold. But Long allowed the other claims in the case alleging breach of contract and good faith.

Long said that the vagueness of the agreement between the two parties, namely a clause hinting at talks outside of this written contract, caused the matter to continue.

“Normally, I would be in complete agreement with the defense that these extraneous conversations that apparently took place around this deal would be irrelevant,” Long said during Friday’s oral decision. “But I’m really stuck on the vagueness of this agreement.”

Attorney Matthew Mayer of the Weld Riley law firm, which represents the developers, said those talks leading up to the deal were key.

“Weight was given to those discussions,” he said.

Steven Anderson, an attorney with the law firm Ruder Ware hired to represent Blugold, pointed to another part of the deal that gives the foundation the option of whether or not to pursue the project in the deal.

“The wording of the contract is clear. We didn’t promise to do anything. In fact, it explicitly leaves that choice exclusively to Blugold,” he said.

But Long disagreed that the contract and arguments presented so far in the case were sufficient to decide the issue.

“The thing is, that language is just too vague at this point for me to determine the only true interpretation,” Long said of the exclusivity deal.

The lawyers said they will now move on to the discovery phase of the case, which precedes a trial.

{div class=”subscriber-only”}The lawsuit centers on an exclusivity agreement the developers signed in December 2017 with Blugold for the right of first refusal to purchase, lease or develop a plot of 3, 9 acres along Menomonie Street where Student Transit once stood. At that time, there were plans to put a mixed-use building there called the Big River Education Center. The building would have university recreation programs, a rock climbing wall, a small restaurant, apartments for up to 350 students and educational areas for studying the Chippewa River, according to a press release issued by the university to the mid-2017. plans to develop the area, and the land for it is now planned to be a parking lot for the Sonnentag Event Center. {/div}

{div class=”subscriber-only”}The developers, who said they invested their own money in the mixed-use building, accused Blugold of breach of contract in their lawsuit. {/div}

In a brief filed last week, Mayer wrote that Blugold continues to violate the agreement by renting parking to one of its “puppets” instead of trying to work with the developers first.

Blugold created a parking lease for $1 a year for 99 years with Eau Claire Community Complex, a business entity that shares an address with the foundation, for land that Majeski and Hoeft dispute they still have exclusivity. A copy of this lease was given to the developers’ lawyers on April 15.

“Blugold clearly violated this term not only by negotiating with its puppet entity, but by fully fleshing out the lease terms before providing notice to Southside and Big River,” Mayer wrote.

The next court date for the trial will be a planning conference on September 2.

Meanwhile, construction is still moving forward with the County Materials Complex. Work on footings and foundations could begin as early as this week, according to an email from Kimera Way, executive director of the UW-Eau Claire Foundation and Blugold Real Estate. Construction is expected to stretch from this year until spring 2024.

The complex is expected to have a 5,000-seat event center, gymnasium, sports complex, university fitness center, sports offices and a specialized Mayo Clinic Health System. in sports medicine and imaging.