Jul. 30—JEFFERSONVILLE — A rail company in Clark County has filed a civil lawsuit against the River Ridge Development Authority after it says an appraisal was improperly done on train tracks the authority intends to dismantle for redevelopment in the River Ridge Commerce Center.
At a special meeting Friday morning, the development authority board voted to hire counsel to represent them in the lawsuit.
A month ago the development authority selected the middle appraisal of three performed on the property in the south part of the commerce center, which was $1.1 million.
But the rail company says that two of the three required appraisers, including the one that was selected, didn't follow approved methods for calculating the appraisal. On Thursday, the Authority received notice that the lawsuit would be forthcoming in Clark County Superior Court No. 6. It calls for declaratory judgement to void the appraisal process done earlier this year and have a new one completed.
River Ridge Development Authority Executive Director Jerry Acy said that when the authority was formed, it included a provision that it would assume all leases previously held by the U.S. Army, and, in 2000 River Ridge became the landlord of Mid America Rail.
In 2014, River Ridge filed a lawsuit in federal court seeking to take the rail land. This was resolved with an agreement including an option that River Ridge could terminate the lease before it expires in 2027, if a specific appraisal process was followed and the tenant paid appropriately.
This called for both the tenant and landlord to select a licensed appraiser, with those two appraisers to select the third. The authority is required to select the middle appraisal.
Acy said that it was determined early on, after things started to develop in the business park in 2008, "that we would need to be able to remove some of that rail to facilitate development because not too many companies require rail," he said. "We don't have any real rail users."
River Ridge negotiated with the rail company to take out the rail and railyard on the South end of the park, which is mainly the more developed Jeffersonville side, whenever it needed to, paying per foot of track.
Acy said that with development expanding into the Northern part of the park, "we decided to exercise that option to buy out Mid America," he said.
According to the complaint filed in court Thursday, the three appraisals came in at $2.6 million, $1.1 million and $620,000, with River Ridge selecting the $1.1 million earlier this month. But the court filing states that instead of using the income capitalization method and the tenant's gross income and operating expenses, "they each made their determinations of value using methods that they were neither authorized to use nor that the parties agreed," according to the complaint.