LAWSUIT: City of Tuscaloosa Never Delivered Funds Promised to Offset Road Construction Business Losses
Local business owners sued the city of Tuscaloosa, Mayor Walt Maddox, a city employee and their former landlord this week, alleging that the city broke its promise to offset revenue losses caused by extensive and lengthy road work downtown.
Most residents will recall the Alabama Department of Transportation's seemingly endless project to improve and repave Lurleen B. Wallace Boulevard in both directions which began in July 2018 and wrapped up two years later, far behind their original schedule.
The Monday lawsuit was filed by Josh Giambalvo and Brent Keith, partners in Keep Growing, LLC, who operated the Frutta Bowls eatery and smoothie shop at the corner of University Boulevard and Lurleen Wallace.
ORANGE CONES ARRIVE
According to the lawsuit, Frutta Bowls opened in June 2017 and was bringing in more than $60,000 every month before the road work began.
Then the orange cones went up, and for a period, both University Boulevard and the left lane of Lurleen Wallace South closed for construction, "which prevented customers from being able to access and visit" Frutta Bowls.
"In doing so, customer access to University Boulevard Frutta Bowl was obstructed and [the restaurant] suffered a significant loss of revenue from lack of customer traffic," the entrepreneurs allege. "Due to the Lurleen Wallace Boulevard Project, University Boulevard Frutta Bowl's revenue declined approximately sixty percent."
TUSCALOOSA OFFERS HELP
All hope was not lost, though -- a year after the road work began, the city of Tuscaloosa announced the Construction Mitigation Program. The initiative promised to work individually with businesses impacted by the ALDOT project and find legal ways to help them survive, including through tax abatements.
Giambalvo and Keith say they immediately applied for CMP assistance in early June 2019, arguing that "perhaps no store was more impacted and damaged" by the road work than Frutta Bowl. At that point, they had already closed the storefront for the duration of the ALDOT project to conserve resources and reduce expenses.
Even so, the rent was still due to another defendant in the lawsuit -- Downtown Rock Point, LLC, which is owned by local developer Wesley Spruill.
The plaintiffs say Eric Thompson, the city of Tuscaloosa's Development Ombudsman, sent Giambalvo an email in August 2019 assuring him that help was on the way in the form of abatement payments and other cash.
The plaintiffs say they regularly contacted Thompson by email and voicemail to check on the status of the payment that had been promised to them and warned him in September 2019 that if the CMP assistance did not arrive, they would no longer be able to pay rent for the Frutta Bowls building on University Boulevard.
A month and a half after his first email, in late October, Thompson reportedly apologized for taking so long and promised to check where things stood, but went silent again. In December, Spruill and his Downtown Rock Point LLC sued Giambalvo and Keith for breach of contract over unpaid rent.
According to the new lawsuit, Thompson reached out again in January to say that the CMP Review Committee was discussing Frutta Bowl's request for help, then later the same day to say the committee had approved their application and sent it to the full Tuscaloosa City Council for a final vote.
Still no help came for Frutta Bowl, and in November 2020 Thompson told the business owners that "the City would not consider Frutta Bowl's subsequent CMP application, effectively denying Plaintiffs relief as provided by CMP through previous agreement." This final disappointment came more than a year after the city reportedly told Giambalvo and Keith that financial help was on the way.
To add insult to injury, the plaintiffs said they were made to pay Spruill and his Downtown Rock Point, LLC a little more than $100,000 for terminating the Frutta Bowl lease early only to find out the company "submitted an application for CMP funds after the deadline for submission" and still received around $23,000 from the city.
In the lawsuit's first three counts, Giambalvo and Keith accuse the city, Maddox and Thompson of breach of contract, wantonness and negligent hiring. The final four counts also include Spruill's Downtown Rock Point, LLC, and accuse all defendants of fraud, unjust enrichment and civil conspiracy.
The plaintiffs are seeking a jury trial and both compensatory and punitive damages from all defendants. The suit was filed in Tuscaloosa County, where Circuit Court Judge Daniel Pruet will hear the case.
Giambalvo and Keith are being represented by Sylacauga attorney William Chadwick Lewis.
In a June 2020 meeting, the city's finance committee was given an update on the CMP, and data shared during that meeting shows the city intended to give Frutta Bowl more than $350,000 but failed to do so because the "business closed before agreement could be signed," which is exactly the result the CMP was created to prevent.