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Lawsuit Filed Regarding Proposed Shopping Center

Lawsuit Filed Regarding Proposed Shopping Center
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By Matt McClain, West Kentucky Star Staff
Sep. 30, 2015 | PADUCAH, KY
By Matt McClain, West Kentucky Star Staff Sep. 30, 2015 | 05:47 AM | PADUCAH, KY
Who knew the fight to bring a Menards, Burlington Coat Factory, and other new stores to Paducah could prove to be so cumbersome between a city that says they want to grow, and a developer that says they want to help the city do just that? The sticking point, however, is whether the city will allow a Tax Increment Finance (TIF) district consisting of only the new shopping center that St. Louis based Sansone Group is proposing. Paducah City leaders told Sansone in July they do not offer "retail incentives", and there would be no further discussion about it.

TIF is a method that captures a portion of the sales tax generated by the sales within the created district to help offset the cost of building new developments. The method is used in cities large and small across the country in projects of all sizes, but Paducah says they don't do TIF, period, saying they consider that an incentive for retail. 

The city does, however, have a long standing tradition of offering a variety of incentives to other businesses concerning industrial or other types of development, like the hotel that's about to break ground for construction in Downtown. The 124-room hotel project will be eligible for up to $4.5 million in incentives.  The incentives are in the form of a rebate based on sales tax generated by the hotel over a 10-year period. The Kentucky Tourism Development Finance Authority approved the offer on September 9.

The city is also declining to let Sansone even present their proposal to the Commission, saying they're not interested. A lawsuit has now been filed alleging the Greater Paducah Economic Development President Scott Darnell was actively fighting against Sansone in a "defamatory" way, with the very stores that Sansone already had an agreement with to open a location in Paducah.

"My father worked too hard over his life to build this company to not fight against this," says Jim Sansone to West Kentucky Star, the son and current person in charge of St. Louis based Sansone Group. Sansone filed the lawsuit against the Greater Paducah Economic Development Council and their President, Scott Darnell, for alleged defamation, libel, and tortious (intentional) interference.

The lawsuit was filed in McCracken County Circuit Court Tuesday, and in the nearly 50 page document it includes an e-mailed letter sent by Darnell to retailers who were planning to locate into the more than $50 million dollar shopping center. The email appears critical of Sansone's attempts to build in Paducah. 

The lawsuit states that one of the emails sent to Academy Sports Outdoors says "Sansone Group have gone to a new low recently, using the school board as a mechanism to try and push the city/county to give them a hand out...is parading your children's future to help developers return a part of your strategy to locate in a community. Do you give Sansone permission to use your brand in this manner?"

Sansone wants to develop the 400,000-square-foot, more than $50 million dollar shopping center along Hinkleville Road in Paducah, near Kentucky Oaks Mall. In previous interviews with West Kentucky Star, Sansone indicated that all of the brands of stores in their development were new to Paducah, and did not involve the relocation of any stores already in the area.

Sansone says multiple prospective tenants of the new proposed shopping center have forwarded emails from Scott Darnell to him. 

The lawsuit states that Darnell pressured business retailers to consider other potential sites advertised by GPED, and it was sent from Darnell's email address. The lawsuit includes multiple different emails that were sent from Darnell's email account.

"We feel he acted unethically and unlawfully when he was working against us with our tenants and trying to pressure them to bring them to other locations in Paducah," Sansone said.

The suit is asking for "compensatory damages", and Sansone says this is the first time they've had to pursue actions like this against an economic developer in the company's nearly 60 year history.  The amount of money Sansone is asking for is not specified in the lawsuit.

We asked whether they still want to build their shopping center in Paducah, given the apparent negative response from the city. Sansone says they do want to build at that site, and would just like an opportunity to present their ideas to the city.  Sansone says the response from Paducah citizens in support of building the development has almost been overwhelming.  He says he doesn't remember another project that they've ever done across the country which has received so much support from residents.

West Kentucky Star has tried to contact Scott Darnell for comment. This story will be updated here if we get a response.


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