Federal regulators have ordered the removal of a controversial run-down barge from Chattanooga's riverfront within 60 days, but bankruptcy filings have clouded the structure's ownership and could make its departure more complex.
"We believe our investors own it," said Chattanooga attorney Gary Patrick, a lawyer for a group that has sued businessman Allen Casey and his company, River City Resort.
The U.S. Army Corps of Engineers, in a letter released Monday to Chattanooga Mayor Andy Berke, said it has revoked the permit for the barge and advised Casey and his company to remove it along with mooring poles and cables at their own expense.
However, Casey and River City Resort each filed bankruptcy petitions late last month as they faced a civil trial in Hamilton County Chancery Court over a lawsuit brought by investors.
David Fulton, an attorney for River City Resort in its bankruptcy case, said he understands that the investors are the owners even though the permit was issued to the company. But, he said, some creditors of River City Resort may object to that position.
Fulton said he likely will file a notice of abandonment and see if any of the company's creditors object to the idea that the barge isn't part of the estate.
"All interested parties can get notice," he said. If someone objects, it will be up to the U.S. Bankruptcy Court to resolve, Fulton said.
Patrick said if something can be worked out with the court and the lien holder of the barge, who is Casey's wife, Emma, he believes the process can move "pretty quickly" and within the 60-day period.
"Hopefully it won't be a dispute. We'll wait and see," he said.
Patrick also said he doesn't have a location where the barge can be moved yet. The corps' letter said it had to be removed from "the navigable waters of the United States."
The corps' action comes about 10 months after it had said the barge wasn't complying with its permit and following long and loud complaints by some top city officials, including Berke. The mayor had termed the barge, moored to a vacant lot across the Tennessee River from the Tennessee Aquarium, "unsightly and dangerous."
"The barge detracts from our revitalized riverfront," he said in a recent letter to the Corps.
Bob Doak, who heads the Chattanooga Convention and Visitors Bureau, said he's pleased with the corps' decision.
"At last, our community can put this behind us," he said. "Now, we need to spend our time on what should be on the river."
Doak said he doesn't object to a waterfront restaurant such as Casey had planned for the barge, which was originally brought to the city in 2009.
Ron Harr, the Chattanooga Area Chamber of Commerce's CEO, said the city's waterfront is "the crown jewel of our community's revitalization story, and we must do everything we can to maintain the safety and beauty of this key asset."
Kim White, president of the nonprofit downtown redevelopment group River City Co., said the corps' action is overdue.
"This has been a very long process," she said, wondering what will happen if the barge isn't removed in 60 days.
The Corps said in its letter to Casey that if Casey and his company refuse or neglect to remove the barge, the regulators can refer the matter to the U.S. Department of Justice. Upon a conviction of a misdemeanor, a fine not exceeding $2,500 could be levied and imprisonment of not more than one year, the corps said.
The corps' letter said that a barge removal, towing and demolition plan must be submitted at least 15 days prior to the planned action.
Tammy R. Turley, chief of the Corps' Regulatory Branch, said it has no record of the Nashville District ever revoking a permit.
Casey, who developed the Chattanooga Choo Choo into one of Tennessee's top tourist attractions three decades ago, had hoped to redevelop the barge along with a 12-acre adjacent tract of land. In 2004, he proposed a 98-room hotel on the parcel along with 60 condominiums, though nothing was built.
The barge was slated to be turned into a New Orleans-style eatery and bar, but in 2011 it became half submerged, and its dilapidated state was a lightning rod for critics. The barge was later refloated and cleaned up by Casey.
In February, a long-running lawsuit brought by the investors was slated to go to trial. The group claimed it loaned money to Casey and River City Resort for the planned developments and were promised a first mortgage on the property. But, they said, there was already a mortgage on the site.
River City Resort filed a Chapter 11 reorganizing petition in U.S. Bankruptcy Court last month. Shortly thereafter, Casey made a personal Chapter 7 filing.
Contact Mike Pare at email@example.com or 423-757-6318.