Developer seeks $3.8m in damages, claims bank breached agreement for Pennsylvania property
WILLIAMSPORT-A Lycoming County company specializing in real estate development for the restaurant industry is seeking more than $3.8 million in damages, saying a bank breached a right of first offer agreement with a owned by the State College area.
Pennsylvania Investment Properties II (PIP II) in a complaint filed Friday in the US Intermediate District Court accuses Truist Bank of selling the property in the 2500 block of East College Avenue without giving it the required opportunity to purchase it.
Williamsport-based PIP II says it paid BB&T (Truist’s predecessor) an additional $50,000 for the deal when it bought the adjacent property for $500,000 in 2016.
The agreement, according to the lawsuit, required that PIP II be notified in writing of the bank’s intention to sell the plot so that it had an opportunity to negotiate its purchase.
According to the lawsuit filed in court, PIP II learned last September that the property had been sold to Horizon Federal Credit Union at least a year earlier for $1 million.
PIP II, whose directors are Albert and Paul Clapps, says it is ready to pay the million dollars for the approximately 1 ½ acre property at a traffic light along a busy highway (Route 26).
PIP II had developed a Burger King on the land it bought in 2016 and said it had planned a complementary restaurant on the second site.
Its location would support causal dining such as Applebee’s, Olive Garden, Buffalo Wild Wings, Hooters and Joe’s Crab Shack, according to the suit.
The complaint points out that the Clapps have decades of experience developing restaurants.
Albert Clapps is a former Regional Vice President/District Supervisor of Carrols Corp. and was part of the management team responsible for deciding which of Carrols 222 restaurants would convert to Burger Kings.
He and a business partner formed AML Development Corp. in 1979, which owned and operated Burger King franchises for 30 years.
Paul Clapps joined AML from 1996. The two formed Pennsylvania Investment Properties in the same year and PIP II in 2008. Both companies developed restaurants throughout Pennsylvania.
He is also involved with partners who have real estate and commercial developments in the Williamsport area.
The opportunity to acquire and develop the Center County property would have resulted in a financial gain for PIP II of more than $3.8 million, the breach of contract lawsuit alleges.
Based on their experience, the Clapps estimate it would cost $1.35 million to build a casual restaurant on the property with an annual rent of several hundred thousand dollars.
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