Neighboring Scott’s Addition property owners in legal fight over parking spots

A parking lot along West Clay Street in Scott’s Addition has dragged two out-of-town property owners into court. (Mike Platania photos)

A spat over parking spaces in Scott’s Addition has spilled into court and may be tying up a new development project in the neighborhood.

Earlier this month an entity tied to Washington, D.C.-based Dalian Development filed a complaint in Richmond Circuit Court seeking a judgment for the right to terminate the lease of its parking lot at 3210 W. Marshall St. to neighboring property owner Hem + Spire.

Dalian has owned the 51-spot lot since 2018 when it was included in its $3.8 million purchase of the former Party Perfect property. That building and the parking lot are across the street from the former Riverside PACE office building at 1300 MacTavish Ave., which North Carolina-based Hem + Spire bought last summer for nearly $11 million.

According to court documents, a lease for the parking spaces dating back to 2010 conveyed to Hem + Spire as part of its acquisition last year. The verbiage in that 12-year-old lease looks to be the root of the dispute.

Per the complaint, the lease for the parking spaces renewed for a 10-year term on Jan. 1, 2021 and is now set to expire at the end of 2030, with Hem + Spire paying rent of $1,200 monthly.

However, the complaint states that Dalian is planning to build a multifamily residential project on the entirety of the old Party Perfect site, and that the leased parking lot would be part of the project area.

The former Party Perfect buildings, in the foreground, have been owned by Dalian Development since 2018. Hem + Spire’s building is pictured to the left with the A-shaped roof.

Dalian claims that last September it sent Hem + Spire a proposal to temporarily relocate the parking spots in order to accommodate the redevelopment, and that once the project was completed, the leased spaces would be permanently relocated to a newly-built parking garage that’s planned as part of the project.

It’s unclear the exact size and scope of the project Dalian is planning. Dalian and its counsel did not respond to requests for comment, and the company has yet to submit plans for the site. Per its website, Dalian’s portfolio consists mainly of luxury apartment complexes totaling around 300 units.

It’s similarly unclear what Hem + Spire’s plans for the 1300 MacTavish building are and exactly how the company uses the parking lot. A Thalhimer flier is marketing the old Riverside PACE building as leasable creative office space.

On multiple visits in recent weeks, the parking lot at the heart of the dispute has been predominantly empty during daytime business hours.

Hem + Spire’s founding principal Maxwell Joseph declined to comment.

The complaint claims that Hem + Spire rejected Dalian’s proposal to relocate the parking spaces, prompting Dalian to send notice to Hem + Spire in January that the lease will be terminated once it runs out in 2030.

Hem + Spire bought the office building last summer for nearly $11 million, and included in the deal was a lease for 51 parking spaces across the street. (BizSense file)

Dalian alleges that Hem + Spire, through its counsel David Hillman of Raleigh firm Ellis & Winters, responded with a letter in March 2022 claiming that Dalian’s attempt to terminate the lease is invalid.

The 2010 lease, a copy of which is included in court documents, states that the agreement “shall be extended for successive periods of ten years.”

Dalian claims that Hem + Spire has taken the position that “the lease is a perpetual lease, one not terminable by (Dalian).”

Dalian, in the complaint, continues: “(Hem + Spire’s) position stymies (Dalian’s) ability to increase the value of its property and prevents the development of the multifamily housing project that would benefit the greater community.”

The court filing concludes with Dalian requesting the court declare that the lease is terminable by Dalian, and that they have done so, effective Dec. 31, 2030.

As of press time, no response has been filed to the initial complaint and no hearings have been set.

Dalian is represented by Hirschler’s Alexander Boyd, Allison Klena, Robert Vieth and John Walk.