The suit by the Montgomery, Texas resort alleges that the city of Conroe gained financial benefits from the resort’s $89 million renovation and is now canceling its promised tax abatement and hotel occupancy agreements.
La Torretta Lake Resort and Spa in Montgomery, Texas filed a civil suit against the city of Conroe, claiming the city is in breach of their contract, The Courier of Montgomery County reported.
In the suit, the resort contends that Conroe received financial benefits from the $89 million spent on renovating the resort hotel. The original petition filed on behalf of TPProperty LLC alleges that Conroe intends to cancel its tax abatement and hotel occupancy agreements, without “completing its end of the bargain,” the Courier reported.
In 2011, Barclays Capital Real Estate Inc. foreclosed on a lien of $84 million against the initial owner of the hotel, French Quarter VIII. The property was then conveyed to TPProperty by deed. French Quarter did not report changes of ownership and financial condition to Conroe and the City Council claimed TPProperty committed a “material breach” of the tax abatement agreement, which was then terminated April 12.
“Conroe’s actions,” stated the petition, “made it clear that it wanted monetary investments into the hotel and was willing to use various ways of inducing someone to make those investments.”
Investments included updating a tower complex for the hotel, a spa, an aquatic center, golf course cottages, a conference center and a specialty restaurant. The improvements were completed in December 2011, the Courier reported.
Further, the petition claims that La Torretta’s agreed-upon workforce of 175 would make it a top-10 employer in the city. From April 2007 to December 2011, Conroe voiced no concerns, the suit contends.
“Conroe simply sat back and received the benefits it had desired,” TPProperty stated in its petition.