Conn. developer files amended complaint in $40M Diamond District lawsuit

After a Richmond Circuit Court judge dismissed a Connecticut developer’s $40 million lawsuit over the city’s $2.44 billion Diamond District project, the developer has filed an amended complaint with a change in language.

Judge Bradley B. Cavedo ruled Jan. 22 in favor of defendants Thalhimer Realty Partners, a subsidiary of Cushman & Wakefield | Thalhimer, and Chicago-based Loop Capital Holdings, which requested a demurrer on the complaint. Republic Projects, a limited liability company affiliated with Connecticut developer Republic Properties, sued the two companies and four employees of the two firms in July 2024, alleging that they cut Republic out of the development deal sometime between June and December 2023 and formed their own development partnership, Diamond District Partners, behind Republic’s back.

In his ruling, Cavedo wrote that “the court finds a distinction between pursuing a contract and carrying on as co-owners of a business. The course of dealing between the parties was considered in the court’s determination of whether a partnership was adequately pled. …

“However … the court finds that the plaintiff has not advanced facts that, if taken as true, would support plaintiff’s claims against the defendants,” Cavedo continued. The ruling gave the plaintiff 28 days to amend its lawsuit.

In the amended complaint, filed Feb. 19, Republic claims it created a “business venture” with Thalhimer and Loop. In the previous complaint, Republic referred to the deal as a “partnership” in its initial lawsuit.

“Plaintiff Republic and defendants Thalhimer and Loop created a business venture, joining together to prepare a response to the [Request for Information] to win the Diamond District Project, and they would jointly own the response to the RFI,” Republic alleges in the amended complaint.

Additionally, Republic claims that the “Republic/Thalhimer/Loop business venture constitutes a partnership or joint venture under Virginia law.”

Republic requests a judgment of $40 million in damages, the costs of the lawsuit and other relief deemed proper by the court.

The amended complaint does not include the four people named in the original suit, where were local Thalhimer principal Jason Guillot, Loop Capital Chairman and CEO James Reynolds Jr. and Loop advisers Susan Cronin and Gregory Peck.

Loop is no longer part of the partnership, leaving Thalhimer as the only original partner of the joint venture.

Thalhimer declined to comment on the amended complaint Monday. Dan Herbst, an attorney with Reed Smith representing Loop, did not immediately respond to a request for comment.

The 67-acre Diamond District mixed-use redevelopment project centers on a new stadium for the Richmond Flying Squirrels Double-A baseball team. The project’s first phase is expected to cost $627.6 million, and includes an 8,000-capacity, $117 million-plus baseball stadium dubbed CarMax Park, which is set to open in time for the 2026 baseball season. The development is also set to include a hotel with at least 180 rooms from a high-end brand, such as Hilton or Westin, and 2,800 residential units, 935,000 square feet of office space, 195,000 square feet of retail and community space, and another hotel.

Originally, in May 2023, Richmond City Council approved a development agreement with RVA Diamond Partners LLC, a joint venture that including Connecticut-based developer Republic Projects, Thalhimer Realty Partners, Loop Capital Holdings and San Diego venue developer JMI Sports.

In May 2024, the city of Richmond, Richmond Economic Development Partners and Diamond District Partners — a different entity — signed a development agreement.

Diamond District Partners includes Capstone Development, Pennrose, Maryland-based NixDev and M Cos., “as well as a deep bench of design and construction experts,” according to a Thalhimer statement from November 2024.

Loop Capital was no longer affiliated with the development partnership as of November 2024 and said in a statement then: “Loop never signed onto any partnership agreement that is the subject of Republic’s lawsuit.”

In its complaint, Republic Properties argues that Loop did not sign the “venture agreement” between Republic and Thalhimer’s Richmond RVADP LLC affiliate but alleges, “Defendants Loop and Thalhimer and plaintiff Republic continued to carry on the business venture to win and carry out the Diamond District Project.”

Diamond District Partners then reached an agreement with the city “in or about April 2024,” the complaint says. “The terms of that development agreement are very different, and far more favorable to defendants Thalhimer and Loop and their Diamond District Partners entity than the development agreement which was approved by the city council on April 24, 2022.”

Diamond District Partners is developing the first phase of the mixed-use component surrounding the planned new baseball stadium. The three-part first phase of the project, according to the development agreement between the city, the EDA and Diamond District Partners, is 22.5 acres. Phase 1 is expected to be completed by 2034.

The Richmond Flying Squirrels team is working with Texas-based development management consultant Machete Group for the stadium itself. In July 2024, Rhode Island-based Gilbane Building announced it and Chesterfield County-based Prestige Construction Group had won a contract to build the stadium. Having a separate development team chosen by the Squirrels for the stadium was a change from the original development agreement.

In August 2024, the Richmond Economic Development Authority’s board approved a 30-year lease and stadium development agreement between the EDA and the Flying Squirrels, in which the Squirrels will pay $3.2 million in annual rent for the next 10 years, with the rates decreasing after that point.