Lawsuit alleges Savannah movie studio developer breached contract
A local commercial real estate firm is seeking damages in a breach-of-contract lawsuit filed Oct. 25 against StudioSavannah, LLC, the developer of the proposed 30-acre sound stage and movie production space, dubbed KAT-5 Studios, in the western limits of Savannah.
Savannah-based Development Associates, Inc. (DAI) alleges in the complaint that Studio Savannah misrepresented its intentions and refused to abide by the terms of an agreement by cutting DAI out of its role as an investor and developer in the project, in an attempt to divest DAI of its 50-percent equity interest in the project.
Based on StudioSavannah’s misrepresentations, DAI kept significant capital on the sidelines and passed on other business opportunities with the intent of using the funding to purchase the property for the benefit of the joint venture between the two parties, DAI’s complaint further states.
In addition, DAI says it expended significant capital and resources toward the purchase and development of the project. Such efforts succeed in getting the project “to the starting block” by locating and negotiating the purchase of the property, as well as facilitating StudioSavannah’s ability to promote the project to potential investors, lenders, tenants and industry parties, DAI claims.
In the lawsuit, DAI is seeking damages for the economic harm the company says was caused by StudioSavannah’s alleged “fraud” and “false promises”, along with punitive damages to deter SavannahStudios from similar conduct, and all attorney and court costs.
SavannahStudio, a partnership between David Paterson of Arcady Bay Entertainment and Taylor Owenby of ISP Global Capital, has not responded to requests for comment as Connect Savannah’s publication deadline on Friday evening, following Savannah Agenda’s attempt to reach the company via KAT-5 Studios’ online contact form last week.
The lawsuit comes after StudioSavannah successfully petitioned for a height variance to develop the film production complex and theater on Savannah’s western edge. The petition for a 15-foot height variance from the 45-foot height maximum for the project at 2442 Fort Argyle Road was approved by the Savannah Zoning Board of Appeals on Aug. 26. StudioSavannah then purchased the property for $1.8 million on Feb. 23, 2022, according to sales records.
The undeveloped 30-acre commercial site is located in New Hampstead, a 4,300-acre planned development that is expected to add thousands of single-family and multi-family housing units to the area.
Taphouse, restaurants planned for 31st and MLK
A former auto repair garage will be converted for use as a beer taphouse as part of the redevelopment of half a block at 31st Street and Martin Luther King Jr. Boulevard, according to a plan approved by the Historic Preservation Commission last week.
The plan also includes the reconstruction of two demolished garages in their original footprint for use as a restaurant and kitchen to “celebrate the use of the property after the original structures were rendered structurally compromised.” In addition, a brick building on the site will be renovated to house a café, while also retaining the current salon tenant, Hair N Motion, according to the developer.
The renovations and reconstruction project was previously approved in April 2020 and work is already underway, but last week the developer was seeking approval of some minor design amendments, as well as the construction of a public restroom building. The updated plan also includes an outdoor courtyard at the site where a parking lot was previously shown in the 2020 drawings.
A joint venture partnership, 1400 MLK, LLC., purchased the properties for $411,800 in November 2019, according to public records. The development group consists of finance company Cabretta Capital, Chatham Developers, and developer Nick Finland, according to Brent Watts, with Cabretta Capital and Chatham Developers. Finland is also the developer of the luxury apartment complex The Lowe being constructed immediately to the south of the commercial project site. Chatham Developers and Finland are also partners behind a multifamily development, the Addie, being built the next block over to the east. In addition, Watts is the developer behind the ongoing rehabilitation of the historic St. Paul’s Academy building at 315 West 38th St. for use as an apartment building.
New fair market rents reflect 17% increase for Savannah region
Anyone feel like they are paying too much in rent? Now you can flash HUD’s new Fair Market Rents in your landlord’s face. (Admittedly, it probably won’t help.)
HUD, otherwise known as the US Department of Housing and Urban Development, recently used private sector data to determine new Fair Market Rents (FMR), which are used used in several federal housing programs, including housing vouchers and how much they will cover.
Nationally, HUD found that the FMR went up 10 percent, compared to the 2022 fiscal-year rate. In the Savannah Metropolitan Statistical Area, which includes Bryan, Chatham, and Effingham counties, the FMR increased more than 17 percent for apartments ranging from efficiencies to 4-bedroom units. (The rents also apply to rental rates for single-family homes, duplexes and multi-family dwelling units that that are not just traditional apartments.)
While reflective of the growing unaffordability of rent throughout Savannah and the nation, HUD’s new rates are actually meant to enable more people with housing vouchers to access affordable and stable housing by keeping up with the rent increases in the private market. (See chart)
