Orange Beach - High Court Upholds Turquoise Ruling

As Published By The Mobile Press Register
Third and fourth towers clear legal challenge
Saturday, January 19, 2008
By RYAN DEZEMBERStaff Reporter

The Alabama Supreme Court has let stand a lower court's decision that gave developer Larry Wireman the green light to build the third and fourth towers of his Turquoise Place project in Orange Beach.
The high court offered no written reason, only noting in its Jan. 11 release of decisions that it would not consider the matter.
The owners of an adjacent hotel and the estate of former landowners brought the appeal, challenging last year's decision by the Court of Civil Appeals to side with a Baldwin County judge in favor of Wireman.
They claimed to own restrictive covenants that limited development to single-family homes on nine beach lots where Wireman planned his third and fourth Turquoise Place towers. And they sought to either block construction of the second pair of 300-foot-plus high-rises or extract millions of dollars from Wireman, who sued in 2004 to have the mid-century covenants dissolved.
Over three years of legal proceedings, Wireman argued that Orange Beach's Gulf-front has undergone dramatic change since the covenants were installed between 1955 and 1966 by landowners Carl T. and Jessie A. Martin. Restricting the 928-foot stretch of beach to residential dwellings would, he contended, put its owners at an economic disadvantage and ensure that they would have no choice but to keep small homes in the shadows of high-rises.
The defendants --the Island House Hotel; Sea Shell Inc., a company through which Bay Minette developer Thomas Mitchell owns half of the 11-story hotel; and the Martin Estate, which was represented by AmSouth Bank -- persisted in their efforts, however, to have the covenants upheld.
During a 2005 trial, Mitchell, who built a number of condo complexes at the beach, testified that in 1999 his company paid $25,000 for the restrictions over the two lots bordering the hotel's property in an effort to preserve the building's sunset view. The bank, which held restrictions over the other seven lots, argued that the Turquoise Place project would devalue property across Alabama 182 that the estate still owned.
At the time of the trial, Wireman said the defendants asked him to pay
$22 million to lift the restrictions. Lawyers for the hotel and estate said their clients would have taken $10 million, though.
Walter Cook, a Mobile attorney who represented the estate, declined this week to comment on the case.
"The Supreme Court has spoken," he said.
Robert Wills, the hotel's lawyer, was unavailable for comment last week. And Wireman's lawyer, Dan Blackburn, didn't respond to requests for comment.
For his part, Wireman said that though the legal hurdles have been cleared, he won't be starting construction of the third and fourth towers -- planned to be 27 and 33 stories -- "anytime soon" because of the slow resort real estate market.
"We've got to see what the owners are doing," Wireman said Thursday. "I've got a few days to close on the property. We just have to assess the situation and see what's going on."
During testimony in the 2005 trial, Wireman said he contracted to pay about $55,000 per Gulf-front foot to the owners of the nine lots. With each lot measuring about 100 feet, that meant each owner stood to collect around $5.5 million.
If he does build all four towers, Turquoise Place will include 882 luxury condo units that start at about $1.4 million and exceed $4 million in some cases.
The first two Turquoise Place buildings are well under way. The first -- a
$110 million, 24-story tower -- should be finished in April, while the second is scheduled to open next summer, he said.