Starr family contends developer inflated clean-up costs to push them out of project
BOSTON (MAY 23, 2018) — Starr Capital Partners, LLC was recently granted a limited preliminary injunction against Toll Brothers, Inc. (NYSE:TOL) in its lawsuit against the national home and apartment developer. In 2016, family owned Starr Capital sold Toll its Cushing Village project – a development Starr Capital worked on for over a decade – for a lucrative retail option to buy the project’s retail space at cost. Starr Capital now alleges in a lawsuit with potential damages exceeding $100 million that Toll attempted to push Starr Capital out of the retail option by exaggerating environmental clean-up costs at the mixed-use development, now known as the Bradford. The injunction ruling restricts Toll from selling or assigning the retail rights to another entity and further indicates that any retail space sale or lease by Toll could be undone by Starr Capital upon prevailing in the lawsuit.
Starr Capital is suing Toll under a variety of claims including MGL, Chapter 93A that allows damages to be doubled or tripled in cases of egregious “unfair and deceptive acts and practices.” Lawsuit discovery uncovered massive cost over-runs and apparent mismanagement, if not gross negligence, of the remediation of the Belmont, Mass. site.
The lawsuit alleges Toll ignored the mutually approved budget of $1.3 million and mutual consent provisions in its contract with Starr Capital, and that millions of dollars of unapproved and unnecessary costs were incurred as a result. While no new significant contamination was found, the lawsuit contends that Toll allowed the remediation costs to unjustifiably skyrocket –to a startling $8 million. If Starr Capital does not pay the exorbitant bills, it could lose its rights to the Bradford’s retail, arguably worth more than $40 million. The complaint and other filings also allege Toll was contemplating to recoup up to 50 percent of suspect costs from the Commonwealth of Massachusetts in Brownfields tax credits.
The lawsuit alleges Toll charged non-Bradford costs and the same invoice multiple times to Starr Capital, and mismanaged the soil treatment, that exacerbated the extent of contamination, costing the project millions of dollars.
Source: Starr Capital Partners, LLC