An office deal gone sour in downtown Petersburg has resulted in a group of developers suing a local university for seven figures’ worth of alleged back rent.
Cameron Building LLC, a partnership between local real estate investors Tom Rosman, Ron Hunt, Bill Wood and Tom Wilkinson, filed suit last month against Virginia State University and the Commonwealth of Virginia, claiming it is owed $1.5 million in unpaid rent on space it leased to the school at 325 Brown St. in Petersburg.
The case, filed Dec. 27 in Richmond Circuit Court, centers on the Brown Street property, formerly used by cigarette maker Brown & Williamson Tobacco and now known as the Cameron Building.
The developers purchased the three-story structure in 2010 and, with the help of a $4.5 million loan, rehabbed it to include office space in accordance with a lease they negotiated upfront with VSU.
VSU signed a 10-year lease in April 2012 to occupy all 20,000 square feet of office space on the first floor, according to the lawsuit. The second and third floors were converted into 33 loft apartments.
The university made good on the lease up until summer 2015, the suit claims, when shrinking enrollment and a budget shortfall forced VSU to make budget cuts.
The lawsuit claims VSU then approached the developers asking to be released from the balance of the lease because it could no longer afford it.
The group advised VSU that it could not release the university from the agreement because the lease was an “integral component of the purchase and financing of the Cameron Building,” the lawsuit says.
VSU during its time as a tenant made complaints related to the building. In three letters sent to the landlords dated August, October and November 2016, VSU reported several alleged issues with the building they claimed affected the terms of its lease, including malfunctioning alarms, uninspected fire extinguishers and standing water and mold in the basement that it claims damaged equipment and made part of the space unusable.
Cameron Building LLC claims it never received the letters because the address of its operation had changed. It wasn’t until March 2017 that the group was made aware of VSU’s complaints, the lawsuit alleges, and subsequently when the university gave notice to vacate the property.
VSU vacated on or around April 3, 2017, and has not paid rent for the space since then, according to the suit.
The school paid about $250,000 in rent during its first year of occupancy in the building, according to court documents. By the time it vacated the property, the lawsuit claims, it owed the development group $1.5 million in back rent.
VSU spokeswoman Pamela Tolson-Turner said the university is aware of the lawsuit but does not comment on pending or active litigation. Ramona Taylor, an assistant state attorney who also serves as VSU legal counsel, said Monday the state has not received the lawsuit and would not comment.
The developers are represented by Williams Mullen attorneys Bill Bayliss and Joseph Blackburn III. They would not comment on the case.
Since VSU vacated the building, Wilkinson said, the group is backfilling the 20,000-square-foot space with new tenants that include Catholic Charities, which recently leased 2,000 square feet. The owners are in talks with an unnamed private school that may sign a lease.