Regional developer and bank reach settlement over financing dispute
12/12/2011 | Real Estate Blog
A nearly year-long suit between Citizens Bank of Pennsylvania and developer Brian O-Neill-one of the region’s most active developers of residential and commercial properties, reportedly ended in a settlement last Friday. O’Neill initially sought $8 billion in damages in the suit, which he filed in January in the midst of a difficult construction economy.
According to the complaint, Citizens Bank breached its financial commitments to O’Neill, resulting in the stalling of a development project for Uptown Worthington. He also claimed that Citizens officials defamed and disparaged him. That Worthington project, which is near Malvern, was set to be a mixed-use development of $700 million, with 1.6 million square feet of housing, shops, entertainment, venues, a hotel, and coveted office space. According to O’Neill, 15 potential tenants backed out during the legal battle.
O’Neill’s lawsuit came just over a year after Citizens Bank won a judgment against him for defaulting on an office-construction loan for Worthington. In the two months following after that victory, Citizens won two more judgments against O’Neill totaling to $3 million in connection with an unfinished mixed-used development in Bensalem.
According to O’Neill, the bank decided not to provide necessary funding for the project in 2008, when the recession was causing credit restrictions. According to the bank, there were no written agreements for the specific financing in question.
Because of the legal wrangling, O’Neill has been forced to alter the Worthington project. Fortunately, O’Neill feels the availability of financing for the current project is very strong, and is expected to be completed by the fourth quarter of 2013.
The terms of the settlement are not being made public. What has been made public is the way development projects can involve many complications, disputes and frustrations.
Source: Philadelphia Inquirer, “Suit settled between Citizens Bank and developer O’Neill over Chester County site,” Diane Mastrull, December 24, 2011.