Hamilton County judge rules for Chattanooga businessman in ownership fight for historic St. George Hotel

The old facade of the St. George Hotel faces Market Street in the 1400 block. Portions of the back and side of the structure have been demolished. / Staff photo by Tim Barber

A Hamilton County judge on Friday ordered that a Chattanooga businessman receive the deed to the historic St. George Hotel site on the city's Southside.

Circuit Court Judge Kyle Hedrick said in his ruling that the contracts that Donnie Hutcherson had with St. George LLC and Chattanoogan Marta Alder are enforceable.

"St. George unjustifiably breached them," the judge said the ruling. "The right that Hutcherson stands to lose - the right to purchase a unique piece of real property - cannot be adequately remedied by money."

Alder, who in 2013 bought the dilapidated and vacant 95-year-old building that sits across from the Chattanooga Choo Choo with plans for a new hotel, said she intends to appeal the ruling.

"I'm going to appeal this, of course," she said. "Definitely this is not the end. It's just not right."

But attorney Susie Lodico, who with Gary Patrick represented Hutcherson, said the judge made "the appropriate decision."

"She was trying to change the terms of the contract on the back end of it," she said.

Lodico said that Hutcherson, who is managing partner at the city's biggest locally owned accounting firm, Henderson Hutcherson & McCullough, plans to save the existing facade of the building as he finalizes his plans for the site.

"He has a history of working hard to save historical buildings," she said.

Alder had sued Hutcherson earlier this year in a dispute over the property. Court papers show Hutcherson loaned her $700,000 in 2017 to get her hotel project started.

Alder said in the suit she tried to repay Hutcherson, but he wouldn't accept the money and rather wanted to take ownership of the 1445 Market St. location.

But Hutcherson, in a counterclaim, said he was exercising his right to buy the site in accordance with an option agreement in the contract.

Hutcherson said earlier that he loaned Alder the money "to help her move forward with her development and restoration plans for the property."

"We entered into a contract with the assistance of our respective attorneys. As part of our contract, both sides understood that if she was unable to secure the funding necessary for her development plan, I had the option to acquire the property," he said.

Hedrick, who heard the case during a daylong trial earlier this month, said in the ruling that he analyzed the transactions and found them to be "free from unconscionability and every other defect that St. George asserted."

The former St. George Hotel has been vacant since about 1980, and fire damaged the building in 2004. Alder said she bought the site to renovate the building and put up a 55-room hotel.

The suit said Hutcherson was given the option to purchase in the event Alder "does not receive and close on a development loan on or before Dec. 8, 2018," which was an 18-month period.

Hedrick said the 18-month deadline was critical.

"The option agreement gave Hutcherson the right to purchase the property if that closing on the development loan did not occur, and it is undisputed that St. George did not close on a development loan."

Alder, who bought the property for $245,000 and later an adjacent parcel for $10,000, said if Hutcherson had wanted the property he had an opportunity to buy it earlier.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.