Mills’ redeveloper, Augusta Canal Authority go to battle in lawsuits

AUGUSTA, Ga. (WRDW/WAGT) – The Augusta Canal Authority and a developer are involved in lawsuits over two mill renovation projects in Augusta.

The lawsuits involve the King Mill and the Sibley Mill. Both former textile mills are along the canal and were bought years ago by the authority for preservation.

Both mills include hydropower facilities powered by water from the canal.

The authority sold portions of King Mill to an affiliate of Cape Augusta and leased portions of Sibley Mill to a Cape Augusta affiliate.

The authority retained power-generating equipment, however.

The authority sued an affiliate of Cape Augusta over damage to power equipment and loss of electricity sales at King Mill.

Meanwhile, the authority was sued by a Cape Augusta affiliate over the authority’s refusal to support rezoning parts of the Sibley Mill campus for apartments.

At King Mill

The authority says the buyer of King Mill failed to adequately maintain the roof and floors above the hydroelectric facility, which the authority retained ownership of, according to a lawsuit the authority filed in September.

This allowed rainwater into the equipment area and caused a fire that “rendered the hydro power generators inoperable for an extended period of time,” according to the lawsuit.

The authority says repairs would cost nearly $560,000, and these repairs are ongoing.

The authority also says in its September 2023 lawsuit it hasn’t been able to generate or sell electricity from the mill since Dec. 21, 2021, a loss of nearly $645,000.

The lawsuit alleges the Cape Augusta affiliate breached its contractual obligations. The lawsuit alleges the Cape Augusta affiliate is liable for all losses and damages suffered by the authority. The authority also seeks attorney and litigation costs, as well as interest.

The authority alleges that although Cape Augusta has sold part of the mill to Crossgate Partners for development as apartments, the damage occurred when Cape Augusta owned the main mill building.

READ THE LAWSUIT:

At Sibley Mill

Cape Augusta had originally planned to use Sibley Mill for a data center but later entered an agreement Crossgate under which Crossgate wants to turn part of the old mill into apartments.

That requires rezoning.

The authority says it won’t allow the rezoning without revisions of the lease to reflect a new masterplan without the data center. The authority also says Cape Augusta has failed to maintain the roof.

Cape Augusta in its May 2024 lawsuit against the authority says that use of Sibley Mill as a data center is no longer feasible.

The lawsuit quotes the lease as stating that the landlord and tenant are to cooperate with one another and that the landlord recognizes that the “substantial rehabilitation process and the varied sources of project funding make it extremely difficult to anticipate every potential revision which may be required in this Lease.”

The lawsuit says the lease states that the landlord will use all reasonable efforts to accommodate such requests.

The lawsuit claims the authority is withholding its cooperation for redevelopment as apartments without two things:

• Getting “a price greatly in excess of the Present Day Fair Market Value of the remaining rent and the leasehold residual value of the Mill site.”
• Payment of claimed damages in the lawsuit filed by the authority, which Cape Augusta calls “frivolous, meritless and unresolved.”

Cape Augusta asks in the lawsuit that the court issue an injunction against the authority or else find the authority in breach of contract. The lawsuit also seeks attorney and litigation fees.

READ THE LAWSUIT:

The authority’s statement

The authority issued a statement Monday saying it “strongly supports the redevelopment of Sibley and King Mills, so that they benefit the citizens of Augusta.”

The statement continues: “However, the Authority recognizes that it must also comply with its duty to be a good steward of these publicly funded assets. For these reasons, the Authority intends to continue its lawsuit to recover for the damage associated with the King Mill fire and to defend the lawsuit filed by the Cape Augusta affiliate.”

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