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VOL. 128 | NO. 204 | Friday, October 18, 2013

Nineteenth Century Club Case Shifts to Fundraising

By Bill Dries

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Opponents of the still-pending demolition of the Midtown mansion known as the Nineteenth Century Club are in the fundraising mode.

They have until Nov. 1 at 10 a.m. to raise $50,000, the additional court bond Shelby County Chancellor Walter Evans ordered Wednesday, Oct. 16, to stay demolition as his September ruling that demolition can proceed is appealed.

“We’ll try. We’ll do our best. We didn’t think we had the ability to raise the first $50,000,” said attorney and Shelby County Commissioner Steve Mulroy, representing the plaintiffs trying to undo the sale of the building by the club to Union Group LLC. “But people from all over the community stepped up who are interested in the preservation of Memphis’ history.”

(Daily News File Photo)

In a September ruling, Evans upheld the building’s sale by the club and its planned demolition. But he stayed the effect of the ruling – essentially the demolition – pending an appeal, which turned into a counter offer to buy the property and preserve the house.

The latest ruling came at the end of a hearing in which those seeking to stop plans for demolition acknowledged their plans for a Nashville businessman to buy the house and restore it as a restaurant had fallen through.

Dave Wachtel also missed the Oct. 15 deadline to put up $40,000 in earnest money to solidify the tentative settlement and alternative that involved Wachtel and his investors buying the property from Union Group at a higher price than Union Group paid.

“His investors have decided not to put that money forward,” Mulroy told Evans Wednesday.

Mulroy also argued against the plaintiffs being liable for any damages saying another sale of the property to a buyer who would preserve the mansion could make up any money lost by Union Group or the Children’s Museum of Memphis.

“We’ve heard that before,” Evans commented.

Later, he declined to rule on the issue of damages saying that was a matter to be decided after the appeals have run their course.

“I think this matter, though, has dragged on for too long and we need to come to a conclusion as soon as possible,” Evans added in his ruling from the bench.

The club donated most of the proceeds it got from the sale to Union Group to the museum. All of that money had been frozen or put in a court-controlled account until Wednesday. All sides agreed Wednesday that the club should have access to a small amount to handle its expenses. The rest remains inaccessible.

If those opposed to the demolition cannot raise the additional bond money ordered by Evans, which would bring the total bond to $100,000, the building could be demolished then. Or the state appeals court could grant its own stay of the demolition pending its ruling in a case that all sides speculated could takes more than a year even if it does not go to the Tennessee Supreme Court.

If the plaintiffs do raise the additional bond amount, Evans’ ruling is stayed by him pending the appeal.

The appeal has already been filed with the plaintiffs continuing their argument that the sale by the club was illegal because it wasn’t a specific vote on the sale and demolition by all of the club’s members.

Attorney Art Quinn, representing the club, told Evans Mulroy’s argument was “the same argument you’ve heard before, maybe a little louder.”

“Nobody of any means in this community has stepped forward and that speaks volumes,” he added.

Attorney Linda Mathis, representing the Union Group, argued that her client’s demolition permit runs out with the new year and that the Memphis City Council has already approved a moratorium on future demolition permits of structures on the National Register of Historic Places although it has exempted the Nineteenth Century Club from that moratorium.

“We may never get another demolition permit,” she said, adding a balloon payment on its financing for the retail development in another year and a half is “looming over our head.”

“We are losing our business opportunity,” Mathis said. “We’re just sitting on a building that’s deteriorating. … And we haven’t done anything wrong.”

Attorney Byron Brown, representing the Children’s Museum of Memphis, said the issue was more than a temporary stay.

“They are asking for the same affirmative action your honor has said they are not entitled to,” he argued. “There is a shortage of money here. There is a shortage of funds to make everyone whole.”

Evans agreed that the existing bond of $50,000 was inadequate given the length of time it would take for an appeal even if it didn’t go to the Tennessee Supreme Court and remained with the Tennessee Court of Appeals.

“I think the bond needs to be consistent with the serious import that this litigation is presenting to the community,” he said from the bench.

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