Judge says city's case against developer over unfulfilled downtown grocery promise can continue
A judge has ruled that the city of South Bend can proceed with its lawsuit against developer Dave Matthews for failing to include a grocery and pharmacy in his downtown high-rise apartment building.
Matthews and the city in 2017 entered into a development agreement related to the apartments he wanted to build at 300 East LaSalle Avenue. In exchange for $5 million from the city to help pay for the project, Matthews agreed to include a grocery store and pharmacy on the ground floor.
Martin’s Supermarkets had publicly stated its plans to operate the grocery store. But in December 2018 Grand Rapids-based SpartanNash bought Martin’s and wasn’t interested in the project. The nine floors of apartments are occupied but the ground floor remains vacant.
The city filed suit in January seeking $7.5 million -- recouping its $5 million plus another $2.5 million in liquidated damages it’s owed under the agreement. But Matthews asked Judge Mark Telloyan to dismiss the suit, arguing that based on prior case law, the city can’t collect on the damages.
But Telloyan disagreed, ruling that this case is fact-specific, and he could find no similar case law supporting Matthews’ argument.