Student housing developer in hot water
Monarch Ventures, a Charlotte-based student housing company, has been trying to locate a posh 500-bed student housing complex in Cullowhee for nearly four years. But, despite the fact that they’ve got a deed and land-use permit in hand, the county’s heard nothing but radio silence from the company since June.
As it turns out, that’s due to a lawsuit between Monarch’s two owners — Shannon King and Martha Thomly — that is likely to result in the company’s dissolution.
“All parties agreed that ultimately the Company should be dissolved,” reads a preliminary injunction issued from Mecklenburg County Superior Court in October 2014.
Thomly filed the suit against King in September, which claimed that King had “through artifice, fraud, and intentional misrepresentation and misconduct wasted hundreds of thousands of dollars of funds, violated the Monarch Ventures Operating Agreement, diverted revenue streams to other entities, and usurped company opportunities, all in plain violation of Ms. King’s fiduciary duties owed to Monarch Ventures.”
The two women had tried to resolve the dispute out of court, the suit says, but wound up having to go a legal route to get things settled.
King and Shannon are named co-managers of the company, with King owning 48 percent of the company and Shannon 43 percent. Two other part owners, Lisa Pulsinelli and Jenny Neal, own 5 and 2 percent, respectively. Including the development at Western Carolina University, Monarch has six current projects scattered in university towns from Florida to West Virginia.
Litigation is ongoing, but the court has already ordered that Monarch appoint a receiver, which is basically a lawyer tasked with dissolving the company’s assets.
That includes the Cullowhee property.
“The Receiver is authorized to enter into an agreement, and culminate any transaction, on behalf of Monarch Ventures, as the 100 percent manager and member of Monarch Cullowhee, LLC, to maximize the value of the WCU Project for the benefit of creditors and members of Monarch Ventures,” the preliminary injunction reads.
If the property were sold, County Planning Director Gerald Green said, “that raises some questions about whether the application is still valid.”
Monarch got its land-use application approved in March and has not yet broken ground on the project. If nothing happens within a year of the application being approved, Monarch would have to reapply. But what if the company that winds up doing the development is not Monarch but some other entity?
“That’s one of the questions that needs to be answered,” Green said.
Requiring a new permit to move forward would mean more than just presenting the developer with a fresh sheet of paper. Monarch got its original permit in just days before Jackson County’s subdivision ordinance expanded to include student housing complexes. The ordinance includes requirements addressing stormwater management, open space, adequate parking, landscaping and sidewalks.
Operating under the existing permit, Monarch would be exempt from all of that. But if a new permit were required to begin construction, then the expanded ordinance would kick in.
“There are some questions that we will be looking at with regard to the validly of the permit we have on file,” Green said.
Thomly declined to comment for this story and her lawyer Fred Monroe, King and Andy Barbee, the receiver appointed by the court, did not return calls requesting comment.