Work began this week on a long-delayed and legally challenged O’Reilly Auto Parts store on land near the Ingles Market at 615 Asheville Highway.
Litigation involving the project took several years to be resolved, but developer Hutton Team received the green light to go forward with the work earlier this year.
Sitework in anticipation of construction began Monday. The finished O’Reilly’s Auto Parts store should be open to the public by the first quarter of 2021, those familiar with the project said Wednesday.
“I think O’Reilly’s is planning on moving in there around the end of January,” said Brian Stubblefield, project manager for BarryHutton Construction, the construction arm of the Chattanooga-based real estate development and management company.
A lengthy legal struggle to prevent construction of the auto parts store at the location was resolved in June, when the state Supreme Court denied a request by Ingles Markets to hear an appeal in the case.
“The holdup was the owners of the shopping center had some issues with them. When (Hutton) called us back, the appeals were finally completed and they had the right to proceed with the project,” Town of Greeneville Planning Director Randy Davenport said Wednesday.
Permits for the project had been submitted and approved by the city several years ago.
“It was just a matter of taking the permits that were inactive and making them active,” Davenport said.
O’Reilly Auto Parts has an existing location at 2085 E. Andrew Johnson Highway in Greeneville.
“Generally speaking, when we start a project it can be anywhere from six months to 18 months,” Mark Merz, O’Reilly Auto Parts vice president of investor relations, financial reporting and planning, said Wednesday.
More specific information about the store will be released about 90 days before it opens, Merz said.
“We definitely have plans to open a store there and we are excited to get the project finished and open and work with the community,” Merz said.
The road to beginning site work required navigating a series of legal potholes. The Tennessee Supreme Court decision filed in June that denied an appeal cleared the way for work to begin.
The appeal was filed after a ruling earlier in 2020 by the state Court of Appeals at Knoxville.
In an appeal of a Greene County Chancery Court ruling, Ingles Markets failed to establish it had approval rights over an adjacent property where the auto parts store was to be built fronting the Asheville Highway market location, the Court of Appeals ruled in January.
The appeals court also ruled that attorney’s fees were not recoverable by Ingles for successfully defending a slander of title claim in the case.
The lawsuit was filed in 2017 by Hutton Team, LLC.
The Town of Greeneville issued a building permit just shy of $1 million in 2017 for the business to be located at 615 Asheville Highway, to Hutton Team One LLC.
Landscaping had started on the 0.69-acre tract when the civil action was filed. The property fronting Asheville Highway had been surrounded by fencing and was overgrown with vegetation before work began.
APPEALS COURT OPINION
The Court of Appeals opinion said that Ingles, the “anchor tenant,” objected to the planned construction of the retail auto parts store on an adjacent property that fronts the shopping center.
In letters to the developer, Ingles claimed it had approval rights over the adjacent property “by virtue of its lease,” the court document said.
Developer Hutton sought declaratory relief to settle the dispute and also sought damages against Ingles under several theories of law, including slander of title.
Ingles answered with a counterclaim for attorney’s fees. At the conclusion of a trial before 3rd Judicial District Chancellor Douglas T. Jenkins, the court granted the developer its requested declaratory relief, but dismissed claims for damages and declined to award Ingles attorney fees.
On appeal, Ingles claimed error in the finding that it lacked approval rights over development of the adjacent property, either by virtue of its lease or other “equitable theories,” court documents said.
Ingles also challenged the denial of its request for attorney’s fees for successfully defending against the developer’s slander of title claim.
Hutton Team commissioned a site plan for the auto parts store in 2015 on the property. It “envisioned the small parcel as an ideal location for an O’Reilly Auto Parts store,” a court document said.
In March 2016, Hutton Team approached Greeneville West Shopping Center owner Monticello Properties about acquiring property surrounding the parcel for off-site improvements including sewer and water connections. Monticello Properties “demurred on the basis of the lease with Ingles” and took the position that the shopping center parking lot remain as shown in an exhibit presented at trial unless written permission was obtained from Ingles for any change or alteration.
Ingles was approached in April 2016 by Hutton seeking approval of its proposed site plan and off-site improvements.
Ingles responded by letter through its lawyers in June 2016 that the project could “not be constructed and developed on the parcel” without Ingles’ approval. The letter stated that Ingles disapproved of the O’Reilly Auto Parts store within the shopping center.
A revised site plan was also rejected by Ingles and Montecello. In June 2016, the Hutton team closed on its purchase of the parcel from First Tennessee Bank. Ingles continued disapproval of the off-site improvements, which were not pursued by Hutton.
START OF CONSTRUCTION
Work on the site began in February 2017. Soon afterward, Hutton received a letter from Ingles’ lawyer demanding that it “immediately cease and desist from all further construction activities,” the court document said.
Otherwise, Ingles would pursue legal remedies in order to enforce what it claimed were provisions of the lease on the 56.84-acre property.
The dispute resulted in a Greene County Chancery Court lawsuit filed by Hutton Team seeking declaratory relief, and award of damages and injunctive relief, along with a declaratory judgment that the Ingles lease “did not encumber or restrict” use of the 0.69-acre parcel.
Also listed as defendants were several other parties who owned land or had an interest in lands that were once part of the larger tract, which has had several owners since plans for the shopping center were announced in 1985 by Horne Properties, Inc.
Following a trial, Jenkins entered a declaratory judgment in favor of the Hutton Team. The decision also stated that Ingles had failed to meet its burden of proof and no longer had approval rights over the parcel and the conveyance of the property to First Tennessee was made “without restrictions.”
“We affirm the judgment of the trial court. The court appropriately granted Hutton Team declaratory relief,” the appeals court decision said, adding Ingles failed to show that it had approval rights over the development of Hutton Team’s parcel.
Work can now go forward, Davenport said this week. The Town of Greeneville was contacted about three weeks ago by the developer about moving forward with the work.
“All of that litigation worked its way through the court system,” he said. Davenport estimated “a three- to six-month timeline on everything being completed.”
“They’re on it full-time and they are moving forward full speed,” he said.