What lies underneath the surface of Piedmont Park?
Is it a nonprofit looking to cover up a sinkhole that threatens its finances at the cost of public safety, as a restaurant group contends? Or is the restaurant group using that underground void to try to grab a payday out of a failed business venture, as the nonprofit alleges?
Unearthing the truth is now in the hands of a Fulton County jury, who heard opening statements Tuesday in a legal battle that started more than six years ago when a sinkhole drove a wedge between the Piedmont Park Conservancy and one of its longtime restaurant partners.
Katherine Drolett and her business partner David Duley, who own The Nook on Piedmont Park and the Be Our Guest restaurant group, planned to open two new restaurants at 1071 Piedmont Ave. NE before a large void emerged below the building in 2018. The sinkhole derailed their plans, prompting the legal battle with the conservancy, which owns the building.
The restaurateurs, who say they loved the conservancy and supported it with donations before the dispute, say the conservancy unfairly terminated their lease while leaving the 10-foot-by-6-foot hole’s cause undetermined and unresolved.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Gary Scott Hulsey, the attorney representing Be Our Guest, said his clients were unable to move forward with their restaurant plans until they had proof the building was structurally sound.
“It turns out the conservancy wasn’t interested in safety,” he told the jury. “It was interested in its bottom line.”
The conservancy says this is a tenant dispute, arguing the restaurant group was failing to meet deadlines and used the void as an excuse to get the nonprofit to pony up money.
“There’s no conspiracy here. There’s no cover-up here,” Jason McLarry, the conservancy’s attorney, told the jury. “There’s a shakedown. That’s what this is.”
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
An underground emergency
Drolett and Duley were making preparations for a planned sandwich and salad shop called Soulshine when the sinkhole emerged in July 2018. The hole halted work on that eatery alongside a sit-down restaurant and bar the partners also planned called Walker’s 1834, which was poised to open within the same building.
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
The incident was labeled an “life safety emergency” when discovered, including by Mark Banta, who was the conservancy’s CEO at the time. The assumption by everyone involved was that Atlanta’s century-old sewers were to blame. But that proved difficult to determine.
Shortly after the void was discovered, dyed water was pumped into it to see if the color would leech its way downstream within the city’s pipe network. McLarry said that test provided evidence there was a connection between the emergent hole and Atlanta’s sewers.
When the city in October 2018 dug more than a dozen feet deep to confirm that connection, no compromised pipe was found. The city filled the hole with grout, and the conservancy considered the problem resolved.
“(The grout) has a consistency almost like a milkshake, and the whole point is that it goes in, it flows and it fills,” McLarry said.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
Be Our Guest said that explanation didn’t satisfy them, their general contractor and their construction lender. Be Our Guest’s bank said it would not provide additional funds for construction until a detailed soil analysis was completed and the void’s cause was found and corrected.
“The conservancy is telling the rest of the world it has been repaired, while our client was actually trying to get it repaired,” Hulsey said.
The conservancy ultimately terminated Be Our Guest’s lease. A Shake Shack and Willy’s Mexicana Grill & Howlin’ Willy’s now occupy those two restaurant spaces alongside the Piedmont Park Community Center.
A revised report
Both sides came armed with several engineering reports, but one received the bulk of the attention.
A structural engineer for Palmer Engineering completed a report for the conservancy and stamped it finished on Nov. 18, 2018. It was provided to Be Our Guest about three months later, but it turns out the version the restaurateurs received had gone through several revisions — at least seven.
The first version called the incident a “sinkhole” and included three bullet-pointed paragraphs on recommended next steps, including hiring a specialist called a geotechnical engineer for additional ground testing. The final edition, which Hulsey called “sanitized,” replaced all sinkhole references with the word “void” and concluded the incident resolved.
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
McLarry said it was an internal report presented to the conservancy’s board as they evaluated potential next steps. With the grout in place, the conservancy was satisfied. McLarry said fears over the building’s foundation and whether it has been further compromised is purely speculation.
“You’re going to hear the word ‘possible’ a lot,” he told the jury, predicting Be Our Guest’s arguments. “It’s possible there are other voids. Well, it’s possible that lightning could strike me down as I walk out of this courtroom.”
McLarry said there’s evidence Be Our Guest was running into financial issues and wouldn’t be able to deliver their restaurants. He called it a “failing business enterprise,” alleging the restaurateurs asked for $2 million in escrow in October 2018 to assist them with restarting work.
Be Our Guest argues they would have been able to financially deliver their promises if the sinkhole received the proper analysis from the conservancy and its engineers.
The restaurant group is asking the jury to award them attorney’s fees — more than $1 million — in addition to lost profits the two restaurants would have received over 20 years. The conservancy is countersuing, asking to jury for similar financial compensation. The trial is estimated to conclude next week.
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