5.1. 5.2. HRSR 06-24-1997 - Laserfiche WebLink

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INFORMATION _.____________JIRIE Ill . amu,, it .. 1 . IONE. . . E 19 .1.' ........._,.-, 3• TIttjf sbRY es Washin. gton County HRA sues over profit fmancing .. • County says advice But a judgment in Washington by law firm fau County District court two years ago said the authority was obligat- ed to pledge assets, based on those JIM BROEDE STAFF WRITER legal documents prepared by Holmes and Graven. An appeals An apartment complex built court upheld that decision. eight yearsago by the Washington The complaint also alleges that - County Housing and Redevelop- Homes and Graven drafted the rancing document for Woodland went Authority is in deep financial P • trouble. Park using a document prepared And HRA officials are putting in Texas for:aproject in Tennes- the blame on lawyers • who they ed's aIle claim gave advice that constitutes Also, itg that the docu- pro ce. ment contained "negligent Ian- ' A Washington County District • Court jury. will..decide whether The HRA is seeking that's true at a trial starting Mon- mare than day.. The HRA is seeking more than minion in damages • $5 million in damages fromthe in a trial scheduled law firm Holmes and Graven. • -- : The 180-unit Woodland Park to start Monday. . Apartments was built in Cottage guage, ted Grove in 1989.But HRA executive expec to ultimately cost • director Jim Heltzer wishes the 1,,,... proauthority more than $5 mil- the start. t had been scrapped from Woodland Park was built for the start. d: In a 16-page complaint, the about ;7.5 million. HRA contends that to prs+te!�! au- But by the time the doors thormonies, it had 'a long- , by ainterest rate of snag caused standing policy ode that should pushed projectpercent have been well-known to Holmes P debt to;12 mil- and Graven — that obligations • hon:Now it's $14 million because such as bonds for Woodland Park the authority hasn't been able to were required to be payable solely afford to pay all the interest, let out of project income.. . alone the principal. :,t • Ibstead,it's alleged that Holmes Stephen Rathke, an attorney de- and Graven wrongfully set up the fending Holmes and Graven in the - obligation payable out of any and malpractice suit, said his clients all authority assets and revenues, aren't to blame for what I. including the general fund, monies �, • from other projects and a special Holmes and Graven didn't • tax levy.• walk into the HRA and say, `Build the project,'"he said. "They never • "The HRA in good faith believed advised them (BRA officials) • its bond .counsel at the time," what to do, either in regard to the Heltzer said. "The BRA directors decision to build or how to provide had a document in front of them permanent financing or to issue which the bond counsel said didn't bonds. They just tried, to effectu- Qbligate the HRA to pledge all of ate (bring about) the !IRA's wish- its assets payable for Woodland es. That's what lawyers are sup- • . Park." posed to do."