Jun. 26—EAU CLAIRE — A lawsuit local developers brought against the real estate arm of the UW-Eau Claire Foundation will proceed after a judge ruled Friday that that it should not be dismissed.
Blugold Real Estate Foundation sought the dismissal of the lawsuit, which was filed in January by companies owned by local developers Robb Majeski and Peter Hoeft over an exclusivity agreement they had to develop a portion of the site where the County Materials Complex is being constructed.
Eau Claire County Judge Emily Long threw out a claim of false representation that Southside Holdings and Big River Education Center alleged against Blugold. But Long allowed the case’s other claims alleging breach of contract and good faith to proceed.
Long said the vagueness in the agreement between the two parties, namely a clause it had alluding to talks outside of that written contract, is causing the case to continue.
“Normally I would completely agree with defense that these extraneous conversations that took place apparently around this agreement would not be up for consideration,” Long said during Friday’s oral ruling. “But I’m really stuck on the vagueness of this agreement.”
Attorney Matthew Mayer of law firm Weld Riley, who is representing the developers, contended that those talks leading to the agreement were critical.
“Weight was placed on those discussions,” he said.
Steven Anderson, an attorney from law firm Ruder Ware hired to represent Blugold, pointed to another part of the agreement that gives the foundation the option of whether or not to proceed with the project in the agreement.
“The language of the contract is clear. We didn’t promise to do something. In fact it explicitly leaves that choice exclusively to Blugold,” he said.
But Long disagreed that the contract and arguments presented so far in the case were enough to decide the matter.
“The fact is this language is simply too vague at this point for me to determine the one true interpretation,” Long said of the exclusivity agreement.
The attorneys stated they will now proceed toward the discovery phase for the case, which comes before a trial.
{div class=”subscriber-only”}The lawsuit is centered on an exclusivity agreement the developers signed in December 2017 with Blugold for the right of first refusal to buy, lease or develop a 3.9-acre piece of land along Menomonie Street where Student Transit used to be. At that time, there were plans to put a mixed-use building there called the Big River Education Center. The building would have university recreation programs, a climbing wall, small restaurant, apartments for up to 350 students and educational areas for studying the Chippewa River, according to a news release the university issued in mid-2017.That building was later dropped from the plans to develop the area, and land for it is now planned to be a parking lot for the Sonnentag Event Center.{/div}
{div class=”subscriber-only”}The developers, who stated they’d invested their own money toward that mixed-use building, accused Blugold of breaching the contract in their lawsuit.{/div}
In a brief filed last week, Mayer wrote that Blugold continues to breach the agreement by leasing parking from one of its “puppets” instead of first trying to work with the developers.
Blugold created a parking lot lease for $1 a year for 99 years with Eau Claire Community Complex, a business entity that shares an address with the foundation, for land that Majeski and Hoeft contest they still have exclusivity to. A copy of that lease was delivered to the developers’ attorneys on April 15.
“Blugold clearly violated this term by not only negotiating with its puppet entity, but fully fleshing out lease terms before providing any notice to Southside and Big River,” Mayer wrote.
The lawsuit’s next court date will be a scheduling conference on Sept. 2.
Meanwhile, construction is still moving ahead with the County Materials Complex. Work on the footings and foundations could start as early as this week, according to an email from Kimera Way, executive director of the UW-Eau Claire Foundation and Blugold Real Estate. Construction is scheduled to go from this year until spring 2024.
The complex is planned to have a 5,000-seat events center, gymnasium, field house, university fitness center, athletic offices and a Mayo Clinic Health System facility specializing in sports medicine and imaging.
