This is a printer friendly version of an article from the The Greenville News
To print this article open the file menu and choose Print.

Back


Developer Rosen sues BMW over auto park deal
Automaker says action, which claims at least $99 million in lost profits, is 'without merit'

Posted Tuesday, August 2, 2005 - 6:00 am


By David Dykes
BUSINESS WRITER
ddykes@greenvillenews.com

Florida developer Cliff Rosen has filed a federal lawsuit against BMW Manufacturing Co., alleging the automaker conspired with Clemson University and state officials to force him out as developer of an automotive research park in Greenville.

Rosen said in a lawsuit filed in U.S. District Court that BMW "intentionally and without justification" caused Clemson officials to abandon or violate their agreements with him for the development of the motorsports, automotive research and education center.

The project ultimately was named the Clemson University International Center for Automotive Research, or ICAR.

Plaintiffs in the lawsuit include companies owned or controlled by Rosen, who couldn't be reached for comment.

BMW is the sole defendant. Rosen alleges three of its officials -- Craig Arnold, Bobby Hitt and Carl Flesher -- "conspired among themselves" and with Clemson officials and state officials to exclude him from the automotive park's development.

None of the three BMW officials could be reached for comment.

Bunny Richardson, a BMW Manufacturing Co. spokeswoman, said "the suit is without merit" and the company "will vigorously defend" itself.

Clemson President James Barker is out of the country and he wasn't available for comment, his office said Monday.

Rosen said in his lawsuit BMW's "tortious" conduct cost him at least $99 million in profits and fees from the development and sale of real estate. He is seeking actual and punitive damages and asks for a jury trial.

On Jan. 11, 2003, Rosen and Clemson officials met with lawyers to close on 45 acres owned by the late John D. Hollingsworth, Rosen said. It was then that Neill Cameron, executive vice president of the Clemson University foundation, learned from another Clemson official that Gov.-elect Mark Sanford had requested a 60-day review of the ICAR project and asked that the real estate closing be delayed, Rosen said.

About 10 days later, Secretary of Commerce Robert Faith wrote Barker and confirmed that Gov. Sanford had asked for a 60-day delay in publicly announcing the ICAR project, Rosen said.

Clemson officials earlier had told Rosen he had not fulfilled his commitment to build the wind tunnel, Rosen said. But Rosen said he responded that Clemson's decision to take control of key strategic aspects of the wind-tunnel project did not take into account the impact on the ability to finance the project.

On Feb. 19, 2003, BMW's Arnold told a Rosen representative the automaker would move its entire research operation, including the $25 million for the graduate center, to Tennessee if Rosen did not restructure the entire deal with Clemson, Rosen alleges.

Rosen said he wrote Barker, reaffirming his commitment to the wind-tunnel facility and his support of Clemson. Two days later, he met with Faith, who told him he would have to restructure the agreement with Clemson or Sanford would stop funding of a key project road, Rosen said.

Rosen also said Faith told him the governor could hold up the $25 million a state appropriation for BMW that would be used to fund the graduate education center.

Faith concluded the meeting by advising him that his interests would be tied up in litigation "for years" if Rosen did not agree to restructure the deal, Rosen said.

Rosen alleges that at the time of that meeting he believed BMW officials had met with Faith or other members of Sanford's administration regarding the automaker's desire "to get Rosen out of the picture."

Rosen said he subsequently attended a meeting that included Hitt and Flesher of BMW and that Clemson representatives insisted Rosen come up with a "better deal" for the university or the relationship would be terminated. Clemson representatives also made it clear that any changes had to be acceptable to BMW, Rosen said.

Rosen also alleges that in March 2003, Hitt, BMW's manager of public relations, told a Greenville City Council member the state needed to "get rid of Rosen" so the automaker could control the Hollingsworth site and move forward with the project.

But Garry Coulter, the council member, told Hitt the city had formal agreements with the developer regarding the project and it intended to honor them, Rosen said.

Later that year, he lost the right to acquire and develop 150 acres on ICAR's campus and he lost development and management fees on property related to the project, Rosen said. He also was forced to relinquish all rights to the wind tunnel, Rosen said.

According to Rosen's lawsuit, he was approached in January 2001 by R. Don Rice, director of the Brooks Institute for Sports Science, founded at Clemson in 1994 in memory of four people killed in an airplane crash en route to a NASCAR race a year earlier.

At the time, Rosen was building a 400,000-square-foot shopping center in Myrtle Beach, he said in his lawsuit.

Rosen said Rice approached him about the possibility of building and developing an off-campus facility to be known as the Clemson University Center for Motor Sports Excellence.

Shortly after the initial contact with Rice, Rosen said he was invited to Clemson, where he attended several meetings with Barker, Rice, Christian Przirembel, senior vice president of campus development and vice president of research, and others to discuss the structure of the proposed motorsports center.

He also attended presentations made to a task force appointed by Clemson's board of trustees to review possible sites for the off-campus center, Rosen said. As a result, he said he learned of a 407-acre site owned by interests established by Hollingsworth, a textile machinery magnate.

Shortly thereafter, Rosen said he met with Barker, Rice and Przirembel and outlined his strategy to acquire the Hollingsworth site "with Clemson's support and knowledge."

With the help of a Greenville accounting firm, Clemson prepared a business plan for the center, which "would develop, build and operate a state-of-the art automotive research laboratory" and whose first phase would be a wind tunnel project, Rosen said.

Rice had conducted a market survey, which predicted the wind tunnel on the ICAR campus would be "widely utilized" by NASCAR race teams, Rosen said.

Rosen said that by December 2001, he and Przirembel were working together on the motorsports facility's concept. A presentation prepared that month by Przirembel showed total projects costs of $100 million, to be paid with $25 million in economic development money and $75 million in private funds, Rosen's lawsuit said.

According to Rosen, Przirembel told him he had recommended Rosen to Barker and Clemson's administration as the project's developer. Rosen said he then hired a design team, created a preliminary master plan and began negotiating with engineering firms to develop the wind tunnel.

In January 2002, one of Rosen's companies agreed to purchase from Hollingsworth's estate and others 132 acres near Interstate 85 and U.S. 276 (Laurens Road) for $6.27 million, Rosen's lawsuit said. In addition, Rosen said he obtained options to purchase an additional 237 acres, and he had the first right of refusal on more property.

Five months later, the chief financial officer of Clemson's real estate foundation sent Rosen an approved "total project cost' budget of nearly $53.4 million for the wind tunnel, Rosen said.

About a month afterward, his managers met with Arnold, BMW's manager for special projects within corporate communications, the architect for the wind tunnel and a member of the Clemson task force appointed to review possible sites for the off-campus center, the lawsuit said.

They discussed BMW's possible funding of $25 million for a graduate school at Clemson and the possibility that the graduate school and a BMW research facility would be put on the ICAR campus, Rosen said.