Connecticut firm sues former Diamond District partners for $40M

A Connecticut-based developer, Republic Projects, has filed a $40 million lawsuit against its former partners in Richmond’s $2.44 billion Diamond District project, a city-backed mixed-use development that includes a replacement for the 40-year-old Diamond baseball stadium.

Republic Projects, the plaintiff in the lawsuit filed July 19 in Richmond Circuit Court, claims that Richmond-based Thalhimer Realty Partners (a Cushman & Wakefield | Thalhimer subsidiary) and Chicago-based Loop Capital cut Republic out of the development deal sometime between June and December 2023 and created their own development partnership, Diamond District Partners, behind Republic’s back.

Richmond City Council originally selected RVA Diamond Partners LLC, a joint venture including Republic, Thalhimer Realty Partners, Loop Capital Holdings and San Diego venue developer JMI Sports, as the developer for the Diamond District project.

Republic Projects is suing Thalhimer, Loop Capital, the Richmond-based Diamond District Partners limited liability company and four individuals, including Thalhimer principal Jason Guillot, who is the Diamond District’s lead developer and often deals directly with the City of Richmond on the project. The other defendants are Loop Capital Chairman and CEO James Reynolds Jr., based in Chicago, and Loop advisers Susan Cronin and Gregory Peck, who are based in Sherman Oaks, California.

The lawsuit claims that although the city government initially chose the RVA Diamond Partners joint venture, the defendants later “formed a different partnership between themselves … [and] separately began negotiating with the city for a development agreement.”

Known as Diamond District Partners, the new development team 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 than the development agreement which was approved by the city council on April 24, 2022.”

The suit also claims that the Diamond District Partners includes “approximately 20 of the 33 members” of the earlier RVA Diamond Partners entity, including Thalhimer, Loop Capital, Pennrose, Capstone Development and multiple Virginia-based partners: KEi Architects, 510 Architects, Poole & Poole Architects, Whiting-Turner Contracting, Breeden Construction, Capital Results, J&G Workforce, Richmond artist Sir James Thornhill, and the Richmond Black Restaurant Experience.

Republic claims in the suit that it paid for the 2022 site plan proposal designed by Skidmore, Owings & Merrill, and that Diamond District Partners submitted a plan in 2024 that “copies heavily” from the earlier plan.

The plaintiff argues that all defendants owe Republic “a duty of loyalty. … A partnership continues until it has been dissolved, wound up and then terminated,” and accuses the defendants of improper competition and improper exclusion from the new partnership. “Republic is entitled to receive its share of the net profits realized under the Diamond District Partners’ development agreement with the city,” the lawsuit continues, and requests a judgment of $40 million in damages, the costs of the lawsuit and other relief deemed proper by the court.

Guillot did not respond immediately to a request for comment Wednesday, and according to his email’s auto-reply message is currently out of the office. The other defendants in the lawsuit also were not able to be reached for comment immediately.

The 67-acre, $2.44 billion Diamond District project’s first phase is expected to cost $627.6 million, and includes a 9,000-capacity, $90 million-plus baseball stadium and a hotel with at least 180 rooms from a high-end brand, such as Hilton or Westin. The project also will include more than 3,000 rental and for-sale residential units, 935,000 square feet of office space, 195,000 square feet of retail and community space, and another hotel. 

In May, Richmond City Council approved a change in the financing of the development to keep the stadium on deadline, after lengthy delays following the March 2023 approval of the site plan. 

Davenport & Co., the city’s financial adviser, recommended issuing $170 million worth of general obligation bonds to finance the Diamond District’s stadium and first-phase infrastructure work, rather than community development authority bonds, as planned.

That would put the city on the hook for paying off the bonds if projected revenue falls short, although the new structure would also have economic benefits, including a lower interest rate that is expected to reduce costs by $215 million over the next 30 years. Also, if the bonds were issued by July 1, the state would have chipped in $24 million through its sales tax incentive program, but Richmond missed that deadline.