York County suit seeks refund from Rock Hill, Tepper’s companies over failed project
York County has sued the City of Rock Hill and companies linked to Carolina Panthers owner David Tepper over $21 million the county spent on what the suit describes as the “collapsed” practice site in South Carolina.
The lawsuit, which calls the failed practice site a “vanity project,” names Appaloosa Management LP, DT Sports Holding, Tepper Sports Holding Inc, and the City of Rock Hill as defendants. Tepper is one of the founders of Appaloosa Management.
In the lawsuit filed late Thursday, York County alleges Tepper’s companies directed misappropriation of $21 million. Then the project fell apart when Rock Hill didn’t issue bonds for the practice project and headquarters for the NFL football team.
The project had been hailed at inception as an economic boon of up to $2 billion. Now the parties that once praised the project are fighting in multiple courts over already-spent money.
“York County has been damaged by a breakdown between the City of Rock Hill on one hand and Appaloosa Management, LP, Tepper Sports Holding, Inc., and DT Sports Holding, LLC on the other (collectively, the “Tepper Defendants”),” the lawsuit states. “The Tepper Defendants directed the misappropriation of $21 million of statutorily restricted, public funds from their stated purpose, the expansion of a roadway in York County, and improperly utilized these funds on their failed vanity project, the Carolina Panthers’ headquarters and practice facility. Rather than cover the ballooning project budget themselves, the Tepper Defendants took money from York County and its taxpayers.”
In the lawsuit, York County blames both Tepper’s companies and Rock Hill for the $21 million loss.
“Ultimately, the City of Rock Hill failed to issue the required bonds, the development project collapsed, and the City and the Tepper Defendants were left blaming each other for the failure,” the lawsuit states. “Both the City and the Tepper Defendants have harmed York County and its taxpayers, and the County should be made whole.“
A spokesperson for Tepper Sports & Entertainment declined comment.
York County officials said in a statement Friday the lawsuit was filed, “to protect the County and its taxpayers and to recover damages caused by these defendants.”
County officials declined further comment, saying the lawsuit “speaks for itself.”
Lawsuit alleges conspiracy and negligence
The lawsuit alleges the Tepper companies approached York County in early 2022 in an “attempt to structure an alternative financial arrangement and continue the project.” The lawsuit also claims one of the Tepper companies provided a “draft resolution for its consideration promoting just such a deal.”
The lawsuit alleges conspiracy as to the Tepper companies, negligence and breach of contract against Rock Hill.
York County not only wants its $21 million back, it also wants punitive damage, according to the lawsuit.
In the suit, York County alleges the Tepper companies conspired to obtain York County Pennies for Progress sales tax funds “under the pretense of constructing and expanding Mt. Gallant Road, but used the money for purposes other than the Mt. Gallant Road project.
The practice site was located along Mt. Gallant Road in Rock Hill.
Pennies for Progress is a voter-approved one-cent sales tax program in York County. Voters approved a program in 2003 that included money to widen Mt. Gallant to three lanes. When the Panthers project formed, it envisioned five lanes. The county put money it would’ve used to widen Mt. Gallant into the larger Panthers project road work to avoid having to widen the road twice.
The lawsuit calls the actions by the Tepper companies, “willful, wanton, and reckless” and asks for punitive damages.
Lawsuit says Rock Hill didn’t hold up its end of the deal
The lawsuit also claims that Rock Hill, under agreements between the city and county, required Rock Hill to use $225 million in bonds for the project.
“The City of Rock Hill has failed to live up to its end of the bargain,” the lawsuit states. “The City of Rock Hill breached these agreements by failing to issue those bonds.”
The county also alleges in the lawsuit that Rock Hill refused assistance from York County in issuing those bonds.
Rock Hill officials say lawsuit is waste of public money
In a written statement sent to The Herald and Charlotte Observer, the city of Rock Hill denied it had breached any contract in the Panthers project and said the new lawsuit is a waste of taxpayer money.
“The County has needlessly and recklessly commenced a frivolous lawsuit against the City,” the city of Rock Hill written statement said. “Time will reveal that this lawsuit was a colossal waste of public money. We reiterate the City has not breached any contract involving the Panther’s project and remains eager to present the facts in any forum against any party desiring an adversarial posture with the City. “
The city also said in it statement that it has offered to work with the county to protect the interests of the public.
“The County’s current lawsuit is both unfortunate and baseless,” the city statement said. “The City certainly did not cause the County to turn over $21 million to the Panthers to complete a Pennies for Progress project. The City has offered to work side-by-side with the County to protect the interests of our citizens. The City has previously offered to conference with the County’s lawyers and provide the factual foundation showing the City is not in breach of any agreement. That the County commenced this lawsuit against the City without carefully examining these facts is disturbing and revealing as to the County’s priorities and agenda. Every City resident is a County taxpayer. We feel strongly that the City and County should be working arm-in-arm to ensure that the taxpayers in the City and County are best protected. Apparently, a majority of the York County Council do not agree, which is regrettable.”
City officials declined to comment further, saying they will not litigate the lawsuit through “back-and-forth media exchanges.”
Bankruptcy filing
The lawsuit comes a week after Tepper’s real estate company, GT Real Estate, filed bankruptcy in Delaware over the failed project.
That bankruptcy remains pending.
The Panthers intended to build a nearly 700,000 square foot state-of-the-art headquarters on the 240-acre land in Rock Hill. The project was supposed to be an economic boost for both the city and South Carolina. It would have been the largest such facility in the NFL and was intended to be a sports and entertainment venue for events from soccer games to high school sports championships and corporate events and concerts.
The Panthers broke ground on the site in 2020.
But Rock Hill failed to issue to the bonds on the site, and the Panthers stopped construction in March so the two sides could work things out.
The two sides could not reach an agreement, the Panthers sent Rock Hill a 30-day default notice, and at the end of those 30 days, when Rock Hill did not respond, terminated the deal.
In a press conference in April, Tepper declined to comment on what went wrong.
Check back for updates on this developing story.
This story was originally published June 10, 2022 at 12:04 PM with the headline "York County suit seeks refund from Rock Hill, Tepper’s companies over failed project."
