Marquette has reached an agreement with St. James Estates LLC to purchase the property that includes Jim Hegarty’s Pub, nearly bringing the litigation between the two parties to a close.
St. James filed suit against the university in September 2008, claiming it interfered with a property transaction that would have resulted in a medical clinic at the building, 1120 W. Wells St. Marquette and St. James have a condominium agreement for the structure stemming from the university’s purchase of the adjoining Newbridge Apartments for $4.3 million in 2007. St. James requested that the part of the property where Hegarty’s is located not be included in the sale.
The university contended that the condominium agreement gave it right of first refusal on sales of the property — no matter the proposed buyer — allowing the school the right to buy the property before St. James sold it to a third party.
The two parties agreed upon a settlement outside of court Jan. 7, according to an official Jan. 15 letter from mediator William A. Jennaro, a retired Milwaukee County Circuit Court judge.
The terms of the settlement are confidential, Jennaro said in an interview. He said the agreement was “mutually constructed” and believes it was a “good settlement.”
Some matters concerning the rights of the building’s tenant, Hegarty’s, must still be decided later this summer since the bar’s existing lease extends into July, Jennaro said. Those issues will not go to trial or affect the settlement.
Last April, Marquette made St. James an offer of $701,000 for the property. St. James had originally valued it at $2 million, while the university valued it at $525,000, according to the lawsuit. The discrepancy led Marquette to request an appraisal of the property.
The proposed buyer, Eihab Atout, had made a verbal agreement with attorney Luke Chiarelli to sign an offer on his behalf. According to the lawsuit, the university said the proposed transaction did not “constitute an offer from a bona fide third party.” Marquette argued it need only pay the fair market value determined by appraisers in order to purchase the property.
St. James’ attorney, Thad Jelinske, argued during a Dec. 1, 2009 hearing that the $2 million offer was valid and Marquette bound itself to pay at least that amount when it exercised its right of first refusal.
“We believe that Marquette University, if they want the property, must pay $2 million,” Jelinske said during the hearing.
Milwaukee County Circuit Court Judge Dennis P. Moroney did not rule on the legitimacy of the offer but said during the hearing that it “raises issues in my mind.” He cited the lack of a written power of attorney.
“The university exercised its right of first refusal to protect its property rights and ensure that the entire site, including the properties where the Newbridge Apartments and Hegarty’s Pub are located, will be available for use consistent with the university’s long-term needs,” said Tim Olsen, communication manager in the Office of Marketing and Communication, in an e-mail.
Olsen said the property is in a “strategic location relative to Marquette’s master plan,” but that there are no immediate plans for the property.
University officials previously said Marquette does not oppose a “properly managed” pub on the site.
Jelinske had not responded to interview requests at press time.
Christopher Placek contributed to this report.