Business owners wrestle over land near Lecompton

Lawsuits delay development near Lecompton interchange

A chunk of prime real estate that economic development leaders hope will lure new jobs to Lawrence remains tied up in several lawsuits.

And one has taken a soap-opera like twist, pitting longtime business partners Duane Schwada and Russell Tuckel Jr. against each other.

Three lawsuits are pending against a 155-acre piece of industrially zoned property immediately north of the Lecompton turnpike interchange.

The property has been touted by economic development leaders as a key in attracting companies that want to take advantage of Lawrence’s location along Interstate 70. People with knowledge of the situation have said that Berry Plastics is considering the site, among others, for a new warehouse and distribution facility.

But a lead attorney in one of the lawsuits said legal proceedings on the property likely will drag into at least the early spring.

“It probably is unlikely that anybody will want to put much money into developing that site until these legal issues are resolved,” said Evan Ice, the county counselor for Douglas County, a defendant in one of the lawsuits.

Zoning, annexation concerns

Two of the lawsuits are fairly traditional legal cases in which neighbors near the site object to both the annexation and rezoning of the property.

In one case, Scenic Riverway Community Association and several people who live near the site contend that the Douglas County Commission improperly cleared the way for the Lawrence City Commission to annex the property, about a mile from any other land in the city limits.

Ron Schneider, a Lawrence attorney who represents the neighbors, said the County Commission was required to act as a quasi-judicial body — which dictates a certain set of procedures and considerations — when it determined the annexation action could proceed.

“We don’t think the county’s decision was reasonable or legal, or that they followed the procedures required under a quasi-judicial action,” Schneider said.

The county has denied those allegations and continues to defend itself in the suit, Ice said.

A second case involving the property is similar. The community association and neighbors allege Lawrence City Commission did not follow proper procedures or act reasonably in rezoning the property for industrial uses.

The city also has denied those allegations and continues to contest the lawsuit.

If plaintiffs are successful, the lawsuits could strip the property of its zoning and annexation, or require those processes to start over.

But the third suit pits the owners of the 155 acres against each other. Venture Properties Inc., a development company led by longtime Lawrence businessman Duane Schwada, has filed a suit seeking to dissolve its partnership with Russell Tuckel Jr.

Schwada and Tuckel have been business partners in more than a dozen Lawrence development and real estate companies since the 1970s, court documents show. The partnerships include one that purchased the 155 acres near the Lecompton interchange.

But now Schwada’s company is seeking to dissolve that partnership and have the 155 acres “partitioned” — or in other words, divided — among the members of the partnership.

It wasn’t immediately clear how that division of the property would affect its ability to be developed as an industrial site. Attorneys for both Schwada and Tuckel declined to comment on the case.

But it appears the lawsuit stems from another, broader legal issue between Schwada and Tuckel. In a fourth case, Schwada personally sued Tuckel after Tuckel made allegations that Schwada was “hoarding” cash and improperly denying Tuckel income from their various partnerships.

The allegations were made after Tuckel had told Schwada that he was looking to sell his interests in 13 partnerships that he has with Schwada. According to court files, Tuckel believes he did not receive an acceptable offer from Schwada, who is the lead shareholder in the partnerships. Tuckel then demanded that Schwada provide $1.18 million in cash disbursements from five of the partnerships.

In an Aug. 27, 2008, letter from his attorney, Tuckel alleged that Schwada had been prohibiting cash distributions from the companies in an effort to “squeeze” Tuckel to “create an incentive for him to sell his interest to Mr. Schwada at less than fair market value.” In court filings, Schwada has denied those allegations.

The letter alleges the companies, at Schwada’s insistence, have been “holding onto approximately $4.5 million in cash for many, many months without making any significant distributions to members.” Schwada has said in filings that the cash has been needed as legitimate working capital for the companies.