City of New Orleans sued over fines assessed to condo developer
NEW ORLEANS – A New Orleans condominium developer has filed suit against the city for fines they allege go beyond the city's powers.
Oak Tree Realty Investments filed suit against the City of New Orleans in the Orleans Parish Civil District Court on July 9.
Oak Tree claims it purchased a property located at 609-625 Jackson Avenue in New Orleans for $9.2 million in 2006 and that $4.9 million was still owed on it before the company defaulted on the property and Oak Tree's former manager, Eric Bauss, left the country following other defaults.
The company is now controlled by mortgage lender American Benefit through Tacco Office Investors, Inc., which is in essence a seizure of the property by the mortgage lender. Tacco took over ownership of Oak Tree without knowing the Jackson Avenue property had been cited for blight 78 times during a single administrative hearing at a cost of $3,230 per citation that amounted to a fine total of $251,940, and which caused a statutory lien to be placed on the property.
The plaintiff claims it was originally seeking to demolish the property but was denied Road Home grant money to do so and that subsequently it has sought to sell the property to a third party developer with whom it has now entered into a contract. However, the lien has resulted in the property being listed for liquidation sale by the Orleans Parish Sheriff's Office to satisfy the fine amount.
The defendant is accused of exceeding the maximum penalty authorized, exceeding its authority to assess penalties, listing the property as a single unit in a judicial sale yet assessing a per unit fine on the property and never providing notice or an opportunity for the plaintiff to be heard at the administrative hearing.
The plaintiff is requesting the court issue a temporary restraining order and injunctive relief against the Sheriff's Office.
Oak Tree is represented by New Orleans-based attorney Adam C. McNeil.
The case has been assigned to Division H Judge Michael G. Bagneris.
Case no. 2012-06652.