The Walnut Commons apartment complex has made its first payment for its use of a prime downtown site owned by the city.
But the payment was made last week only after the Chattanooga Downtown Redevelopment Corp., sued the current owners of the 100-unit apartment complex, claiming that an initial payment was only about 4 percent as much as what was due.
The city, which has a ground lease for Walnut Commons, said in a Hamilton County Circuit Court lawsuit filed last Thursday that the apartment owners must pay $273,443 for its 2014 lease, based on the terms of the agreement the city negotiated with the original developers when the project began nearly a decade ago.
Valerie L. Malueg, assistant city attorney, told the Chattanooga Downtown Redevelopment Board Monday that within hours of the lawsuit the city received a check for $272,309, replacing the original payment of only $11,025. She said the city will verify the calculations made for the check delivered last week and, if approved, the lawsuit will be dropped.
The dispute over the amount stems from the interpretation of the developer’s cash flow after debt payments.