Courtyard by Marriott

Artist’s concept of a Courtyard by Marriott, the proposed hotel that is the private expenditure linchpin of the Mason City downtown redevelopment plan.

MASON CITY | The city of Mason City rejected almost all of the claims made in lawsuit filed by a San Diego developer who failed to build a downtown hotel, according to court documents.

Mason City denies most of the claims listed within the suit and asked that the suit be dismissed with costs to the developer, G8.

“Plaintiff failed to perform its obligations under the terms of the Development Contract making said contract unenforceable by Plaintiff,” the city’s response said.

On July 18, G8 Development filed suit against Mason City and the Chamber of Commerce Foundation in Cerro Gordo County District Court, claiming the city was in breach of contract.

Both parties have been served but only the city has filed a response so far. Attorney Randall E. Nielsen filed the response and requested a jury trial.

In the lawsuit, Philip Chodur of G8 Development makes several claims against the city and the chamber, namely claiming the city was in breach of contract.

In its claims of the city's breach of contract, the developer lists several demands the city imposed that it claims were not part of the contract.

“During the negotiation and pendency of the Development Contract, the City continually sought to impose upon G8 artificial and extra-contractual obligations that were not in good faith and that were not part of the Development Contract,” the petition states.

The city responded, saying, “the city expected performance by the Plaintiff under the terms of the Development Contract.”

The lawsuit listed the obligations:

  • Altering the long-expected scope of the project to satisfy the requests the city had to meet to receive state grant funding, including as related to a mixed-use requirement imposed by the state.
  • Requiring requests for proposals that the city suggested to G8 Development were only perfunctory, and that would not affect the company's rights under the eventual development contract.
  • Imposing arbitrary deadlines related to the submission of construction drawings.
  • Imposing arbitrary deadlines related to construction lending and loan commitments.
  • Arbitrarily delaying G8 Development's ability to meet its obligations under the development contract by misplatting the site, requiring G8’s architects and engineers to rearrange its site plan on the existing lot lines.
  • Requiring the City Architectural Review committee to approve new site plans.
  • G8 Development claims that the obligations shortened the timelines within the development contract and hindered performance, making it impossible to complete its project.

When the city terminated the development contract, G8 Development claims the termination was not in good faith. At that time, the city said the developer had defaulted on the project.

The response stated that the city has acted in good faith and added that G8 did not act in good faith in the performance of obligations under the terms of the development contract.

Chodur filed a similar lawsuit alleging the city of Vista, California, breached its contract with him on a condominium, commercial and office space project, according to an article published in the San Diego Union Tribune in October 2015. The suit claimed the city changed agreements for the project.

Chodur filed a claim with the city for $3 million, which was rejected. He then filed a suit for breach of contract, which is still pending. 

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