If you recall, I have had several posts about Brian O’Neill of O’Neill Properties in regards to his Uptown Worthington project in Malvern (future site of Wegmans). Citizens Bank had secured a $61 million judgment against O’Neill in November for unpaid loans on the project.
Breaking news . . . Mr. O’Neill is taking back the ball to his side of the court. He has filed a lawsuit against Citizens Bank for $8 billion in damages ($4 billion in compensatory damages and $4 billion in punitive damages), claiming that the bank wrongly called for loans before they were due and the bank did not follow through with their end of the agreement with construction financing.
The O’Neill lawsuit alleges that Citizens Bank judgment was “maliciously based upon sham defaults manufactured by the bank in bad faith — as part of a scheme to pressure”. I am guessing that Citizens Bank tried to back O’Neill in to a corner with their demand to repay the loans. O’Neill’s lawsuit points to a couple of major problems with Citizens Bank. First, the bank was demanding repayment on the financing loans before the loans were scheduled to be due; and secondly, Citizens induced O’Neill to amend the initial loan agreements and increase the amount borrowed when they had no intention of doing so.
After Citizens Bank secured its judgment against O’Neill (in essence leaving the Worthington project without promised financing as the lead lender), O’Neill has been challenged in his efforts to find other financing. Without Citizens Bank’s financing, O’Neill has faced great difficulty in restructuring the financing required for the Worthington project. We are acutely aware that the economic climate is far different now than it was in 2002 when Brian O’Neill and O’Neill Properties began this major redevelopment project in Malvern, making this current financial situation all the more difficult for both sides. Because of Citizens Banks actions, O’Neill alleges that he has lost not only tenants but also damages to his company far exceeding the $61 million loan amount. As a result, O’Neill is seeking damages of $8 billion from Citizens Bank.
If you are keeping score, looks like the ball is in O’Neill’s court. Citizens Bank, you are up next . . .
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Now that both O’Neill and Citizens Bank are pointing fingers at each other, where does that leave the project? My guess, a very expensive mudhole that those driving on 202 will look at for years! Will Wegman’s even be able to open in this partially constructed site?
It was Wegman’s that had me exploring the Uptown Worthington project to begin with — Wegmans was supposed to open in spring 2009, then it was fall 2009, the latest is spring 2010. I’m guessing that it will be delayed further (and may never open). Although Wegmans is in charge of their own building contruction they will not be able to get a certificate of occupancy because of the unfinished curbing, parking, lighting, etc. that would be the responsibility of O’Neill Properties. I’m betting that if something doesn’t move over the next few months, Wegmans could be looking at legal action against someone . . . O’Neill, Citizens????
I cannot imagine that Wegman’s, and more recently Target, would continue pressing forward with construction at the site unless they had some real confidence that they would be able to get their CO within a reasonable timeline. Here’s hoping anyway, I am anxiously awaiting Wegman’s around the corner too.
Wegmans just opened a major site in Collegevile — and probably is fine with a delay here because the distances are not that far — this new one is halfway between Downingtown and Collegeville i would think.
Real Estate common area agreements may allow opening prior to completion depending on how the parking lot is assigned/lined and entrances are marked. It doesn’t help any of us to have it unfinished — but I would guess that leasing (considering that Circuit City, Charlie Browns, the furniture story and Linens and Things are empty spaces…doesn’t create too much demand for new space.”
The paper today says $8B — now that’s real money…
Looks like another over-extended, over-inflated developer who is getting his payback for all the heartarche he caused when times were good…
If this development fails, I wonder how the Great Valley Stakeholders will feel. They formed in response to the ONeill request for TIF funding — and if this development goes belly up, their tax forecasts will be badly off. Dominos falling everywhere. Difference in Great Valley, however is that they have an EIT — the school district just doesn’t take their half.
I’ll be interested to see how this whole mess plays out. From what I can tell, and if O’Neill is in the right, Citizens Bank shouldn’t have pulled its funding.
O’Neill is a great developer and has built nice projects for everyone and will complete this project over time.
Wegmans will finish their project and will go forward and that will help everyone.
Everyone should support O’Neill -Wegmans and the rest of this fine project = its a fine complex for the Great Valley Community.
Citizens should follow thru with their promise so this complex and be completed.
We all should think twice before we do business with Citizens.
Citizens Bank should try to be a good Corporate American Citizen ??? and not a RBS
The Town should help Wegmans and issue the CO.
Wegmans will be a wonderful asset for the community and will offer so much for area.
Jobs-tax dollars- and a reason to visit.
Pfizer Complex will be a winner again.
O’Neil is not to blame in this. Citizens has crossed the line because of their bad business practices and scrambled to dig themselves out fo the hole. What they didn’t count on was the fight they would get from O’Neil.
Wegmans and Target will open in a few weeks. They are hiring and that part of the project is, at this point, basically complete. The money to complete the curbs, drives, etc was escrowed (as is required by any major project these days) and therefore has never been an issue.
I have been closely watching the progress of the project as an interested party on many fronts. I’ve been looking to locate my new corporate headquarters in the area and Uptown Worthington is a possible location. I also am very interested in buying a condo or townhome in the development if it is completed.
I wish the development the best and hope that things get back on track so the community and I can reap the benefits of this first class proposal.