A prominent downtown property slated for a 46-story Ritz Carlton Nashville tower has been sold in a foreclosure auction after the developer allegedly stopped making payments to the bank.
R Squared Properties LLC of Washington bought the triangular-shaped 1.2-acre lot at 727 Korean Veterans Boulevard for $35 million on Thursday, according to the deed filed with Davidson County Register’s office.
The property was sold to the “highest bidder for cash” at Metro Nashville Courthouse on Thursday morning, the deed states. The sale price is the same amount the site sold for in March 2020 — $35 million.
R Squared officials did not immediately respond to requests about whether they will continue with development plans for the Ritz hotel.
Seller RC Nashville Development Partners, led by Timothy J. Morris, was sued for defaulting on a $10 million construction loan by Oakworth Capital Bank, the financiers for the original Ritz project. A U.S. Magistrate Judge said on April 1 that the defendants continue to fail to adequately respond to legal filings.
“RC Nashville has not filed an answer,” Judge Barbara D. Holmes wrote. “Although Morris filed a letter on behalf of himself and RC Nashville that could be construed as an answer to the complaint, RC Nashville can only appear in this case through a licensed attorney because it is a limited liability corporation.”
Ritz Carlton Nashville plans stalled shortly after they were announced
Plans announced in 2021 were to build a $585 million hotel and condominium tower filled with upscale design and amenities.
Morris told The Tennessean at the time that he was inspired by the success of Four Seasons Nashville.
“They came in as trailblazers,” Morris said. “They established the fact that people would pay the prices they’re paying for that type of luxuries and that brand and amenities.”
However, trouble surfaced in 2022 when construction was delayed due to financing challenges.
In October 2023, Oakworth Capital Bank filed a lawsuit in U.S. District Court for Middle Tennessee alleging that Morris and his RC Nashville Development Partners failed to make payments on a $10 million line of credit.
In court documents, Morris said he was beset by difficult economic conditions including high inflation and post-Covid supply chain interruptions.
“It seems only fair to a layman like me that (Oakworth Capital Bank) can take the deed in lieu of foreclosure, sell the property, a course of action I would fully support,” Morris wrote the court. “Plaintiff would be made more than 100% whole financially based on the purported value of the property.”
Morris faces numerous lawsuits
Developer Tim Morris has found himself at the center of several lawsuits regarding his business dealings.
Morris is principal of M2 Development Partners and RC Nashville Development Partners, which was also sued for allegedly failing to make payments on a $10 million loan.
In a separate suit, Oakworth Capital also alleges Morris failed to make payments on a $5.3 million loan for a project he is working on in Washington, D.C.
On April 1, U.S. Magistrate Judge Barbara D. Holmes ruled in favor of Oakworth that Morris was in default of his loan payments for that case.
“Although Morris has made some filings in this case, he failed to follow the Court’s instruction in its February 15 order to respond to the motion for entry of default,” Holmes wrote in her order. “Morris’ disregard of the Court’s order justifies entry of default against him.”
In January, real estate development company The Bradley Projects filed a suit against Morris and Patterson Street, LP, alleging the defendants failed to pay back a promissory note totaling $218,750. According to the lawsuit, the payment was due in full Dec. 31, 2023.
M2, Morris and RC Nashville are listed as defendants in another suit filed in December by office building Fifth+ Broadway in downtown Nashville. According to the complaint, M2 and RC, of which Morris is the guarantor, failed to make rent payments to the office owner. The plaintiff is seeking $184,955.46 plus additional damages and interest to be determined at trial.