Developer files notice to sue Indianapolis, claiming $30M in damages

Ambrose Property Group on Tuesday filed a notice of tort claim with the city of Indianapolis, a legal step that sets the stage for it to sue the city over its effort to force the developer to sell it the former General Motors stamping plant site west of downtown.

The move comes one day before an Ambrose attorney is scheduled to meet with city officials about the issues.

The Indianapolis developer — which said Sept. 27 it was withdrawing from its proposed $1.4 billion Waterside development — said the city’s threats to seize the 91-acre property through eminent domain are disrupting Ambrose’s efforts to get full value for the property through a private sale. Ambrose contends the project agreement the city signed in 2018 specifically bars the city from taking the property through eminent domain.

“By making baseless eminent domain threats, the City has slandered our title to the Waterside property and prevented any sale from occurring, resulting in Ambrose losing between $65 to $100 million — the value of the property,” Ambrose CEO Aasif Bade said in an email to IBJ Tuesday.

The notice of tort claim from Ambrose counsel Jonathan Bunge, an attorney at Chicago-based Quinn Emanuel, said the developer intends to accuse the city of slander of title, defamation, tortious interference, fraud “and any and all other relevant tort claims.” Ambrose alleges the city has caused at least $30 million in harm.

Ambrose’s filing of a notice of tort claim follows nearly three weeks of email exchanges between the firm and city officials. The two sides have become increasingly testy since Oct. 2, when Donnie Morgan, the city’s corporation counsel, sent a letter to Ambrose indicating the city wanted to buy the land or would take it by force.

Under Indiana law, Ambrose had up to 180 days after the date of its alleged loss to file a claim.

Asked for comment on Ambrose’s tort claim filing, Morgan said in a statement: “Since Ambrose Property Group’s initial announcement, the City has repeatedly asked to meet with company leadership to begin conversations about the future of this site. For the first time this morning, legal counsel for Ambrose agreed to a meeting that is scheduled for tomorrow [Wednesday] afternoon. We believe meaningful conversations about the future of this important site will be more productive than public posturing.”

The developer contends the city has no right to take the land through eminent domain, alleging it signed away that right as part of a February 2018 project agreement that laid out financial incentives for the development of Waterside.

The city has countered that argument by citing a state statute indicating contractual language is overridden in Indiana by a constant right of municipalities to claim land.

Ambrose said that even if the city is legally permitted to claim eminent domain, the municipality still would have committed fraud by agreeing to a term in that contract to which it knew it could not be held.

The company also said the city has created problems for itself moving forward.

“By deliberately and widely publicizing its efforts to take Waterside — with full knowledge that the city cannot do so — the city has unlawfully cast a cloud over Ambrose’s title to the property and disparaged Ambrose’s reputation,” Bunge’s tort claim letter said. “Further, city officials have made public statements about Ambrose and the Waterside property in which they have defamed Ambrose by falsely asserting that Ambrose is not a capable real estate developer.”

Bade said in a written statement the company has met with the city more than 100 times since becoming involved in the redevelopment of the stamping plant site.

Both Bunge’s letter and Bade said the company is still willing to meet with the city to find a resolution.

“We remain willing to meet and work with the City, as we have done many times over the past three and a half years, but the City must immediately stop its unlawful conduct and rectify the damage its actions have caused,” Bade said.

Ambrose agreed to purchase the GM stamping plant property in May 2017 from the Revitalizing Auto Communities Environmental Response, or RACER, Trust — which was formed during GM’s bankruptcy to prepare former plant sites for redevelopment. The developer was chosen by the city and RACER from among four bidders for the property.

Prior to Morgan’s Oct. 2 letter threatening eminent domain, Ambrose indicated it was working with JLL to market the property to buyers that would be able to carry the project forward as planned. Ambrose later said it had received extensive interest in the site, including from an unidentified national developer that embraced the Waterside vision.

The company said in a letter last week that the city’s threat of eminent domain stopped those conversations, making it “impossible” for the company to sell the land.

Ambrose said Tuesday it expects to receive $65 million to $100 million for the property, based on valuations done on the property before the city’s legal threats.

The company has already sold 12 acres of the original 103-acre site to the Indianapolis Zoo. That $3 million sale came in mid-September as part of a larger deal in which Ambrose transferred 28 acres to the zoo as part of an agreement between the parties reached in 2018.

The site previously had been proposed as the location of a new Marion County justice center, which now is under construction in the Twin-Aire neighborhood southeast of downtown.

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