In The News

By Kevin Eigelbach  – Reporter, Louisville Business First
Nov 7, 2013, 2:44pm EST

Louisville-based PBI Bank has appealed a $7 million judgment rendered against it in Jefferson Circuit Court in a lawsuit involving Signature Point, a proposed residential development off English Station Road.

As Business First reported in July, a Jefferson Circuit Court jury awarded $7 million in damages against the bank.

The case involved developer J. Scott Hagan and his former plan to build Signature Point, a complex of 414 apartments and 299 condominiums on 90 acres near Christian Academy of Louisville. PBI Bank lent Hagan more than $25 million to build the complex, but the project went awry in the last recession.

According to court records, Hagan had claimed that PBI Bank asked Hagan to deed the property to the bank in exchange for forgiving the loan. Hagan agreed if he could keep the 30 acres planned for apartments.

While they were negotiating, according to a trial memorandum that Hagan’s attorney prepared, PBI was also negotiating with a third party to buy the apartment property.

“PBI concealed the sales opportunity from (Hagan) and instead began a course of deceitful negotiating with Hagan in order to obtain a deed to the property,” according to the memorandum.

Hagan eventually deeded all the property to the bank, and the bank sold the apartment property to the third party — Managed Assets of Kentucky LLC— for $3.8 million, according to the trial memorandum.

A portion of the Signature Point property now is being developed by Elite Homes Inc., which plans to build 124 garden homes and unattached single-family homes, as Business First reported in August.

According to court records, on Oct. 25, the bank appealed the jury verdict to the Kentucky Court of Appeals both the verdict and the judge’s decision to deny PBI Bank’s motion to reduce post-judgment interest the bank would have to pay.

Attorneys for the bank and for Signature Point did not immediately return messages left for comment today.

By Kevin Eigelbach   – Reporter, Louisville Business First
Jul 19, 2013, 12:24pm EDT

Attorneys for PBI Bank and its holding company, Porter Bancorp Inc. (NASDAQ: PBIB), plan to ask that a $7 million verdict by a Jefferson Circuit Court jury against the bank be set aside.

Doug Sharp, special counsel to the president of PBI Bank, said in an interview that the bank’s attorneys plan to file an objection in writing, probably on Monday, “setting forth what we believe are the errors (made in the verdict) and our defenses.”

The jury on Tuesday night awarded $7 million in damages against PBI Bank, $5.5 million of which were punitive damages.

The case involves developer J. Scott Hagan and his former plan to build Signature Point, a complex 414 apartments and 299 condominiums on 90 acres off English Station Road, near Christian Academy of Louisville.

PBI lent Hagan more than $25 million to build the project, which was the largest loan in the PBI portfolio of loans at the time, said Larry Zielke, who is representing Hagan in the case.

The project went awry during the last recession, when the local condo market “hit the skids,” Zielke said. “You couldn’t give them away.”

PBI management asked Hagan to deed the property to PBI in exchange for forgiving the loan, Zielke said, and Hagan agreed if he could keep the 30 acres planned for apartments. While they were negotiating, Zielke said, the bank arranged to sell the apartment property to a third party, without telling Hagan.

Hagan eventually deeded all the property back to the bank, and the bank sold the apartment property for $3.7 million.

Hagan’s claim, Zielke said, was that by not telling him about the third-party offer for the property, the bank denied Hagan a business opportunity and failed its fiduciary duty to him.

Zielke said he plans to ask the court on Monday to enter a judgment in the case based on the jury’s verdict. But Sharp said PBI will ask the judge not to enter the judgment.

The judge’s options would include modifying the verdict or not entering it altogether, Sharp said.

He declined to say what errors the bank thinks were made, or what defenses the bank might use.

If the judge does enter a judgment, he said, the bank would have 30 days to appeal to the Kentucky Court of Appeals. But the trial judge “has the first opportunity to reverse what we think is error,” he added.

By Andrew Robinson – Reporter, Louisville Business First
May 17, 2013, 2:57pm EDT Updated May 17, 2013, 3:19pm EDT

Shelbyville Road Plaza has added another tenant.

The St. Matthews shopping center, which is owned by Hagan Properties Inc., recently added a Lane Bryant store.

Lane Bryant, which sells plus-sized clothing for women, opened earlier this month in a 5,000-square-foot space in the shopping center’s south end, near Off Broadway Shoes and Massage Envy, according to Tommy Edwards, leasing agent for Hagan Properties.

Shelbyville Road Plaza has had several new openings in the last several months, and announced earlier this year that it is adding a 33,000-square-foot Nordstrom Rack store.

Ross Dress For Less opened in March in a 28,000-square-foot space that had housed a Wild Oats store.

But a 26,000-square-foot space that previously housed a Borders bookstore remains vacant in the St. Matthews shopping center.

Edwards reiterated on Friday that Hagan officials still are determining whether the space should be leased as one space or be broken up for multiple tenants.

By Andrew Robinson – Reporter, Louisville Business First
Mar 22, 2013, 6:00am EDT

Shelbyville Road Plaza has landed a national retailer to fill a large space that has been empty since 2009.

Seattle-based Nordstrom Inc. plans to open a 33,000-square-foot Nordstrom Rack store in October at Shelbyville Road Plaza, owned by Hagan Properties Inc. The location previously housed a Circuit City store.

Tommy Edwards, leasing agent for Hagan Properties, declined to disclose terms of the lease or the cost of renovation work, but he said the renovations would cost “a significant amount for both sides.”

Edwards said he was aware of Nordstrom’s interest in the site for several years. The location will be one of two dozen the company plans to open this year nationwide.

“They have a timeline you have to work under,” Edwards said. “But we’re very excited. They’re a first-class company.”

Workers have been in the building since last week to prepare it for renovations, which will include a new facade.

Stores offer wide selection
Nordstrom Rack is described by the company as “the off-price retail division of Nordstrom Inc.”

It carries merchandise from Nordstrom stores and Nordstrom.com at 50 percent to 60 percent off original Nordstrom prices.

It also carries apparel, accessories and shoes that are purchased for Nordstrom Rack stores from many brands carried in Nordstrom stores, including Hugo Boss, Kate Spade and Trina Turk.

Nordstrom officials confirmed the plans for the location but declined further comment.

In a statement, Geevy Thomas, president of Nordstrom Rack, said, “We’ve been looking for ways to better serve our customers living in Kentucky who have been making the drive to visit our Rack stores in Cincinnati and Indianapolis.”

Nordstrom operates 240 stores in 31 states, including 117 full-line stores and 121 Nordstrom Rack locations. It also operates two Jeffrey boutique locations, a Treasure & Bond store and a clearance store.

Nordstrom Rack rapidly growing
Blake Nordstrom, president of Nordstrom, said during the company’s earnings conference call last month that the company expects to nearly double the number of Rack stores to more than 230 during the next four years.

In 2012, Rack’s total sales were up 20 percent, with same-store sales up 7.4 percent.

Nordstrom Rack stores averaged $550 in sales per square foot last year, Blake Nordstrom said.

Michael G. Koppel, CFO for Nordstrom, said at the Bank of America Merrill Lynch 2013 Consumer & Retail Conference on March 13 that Nordstrom Rack typically draws a younger customer than the company’s Nordstrom stores.

Nordstrom launched its Rack concept about 20 years ago, and Koppel said it took company officials several years to understand how to make the brand a good growth opportunity for the company.

“The ability for us to get great real estate and put great product in that real estate just seems to get better as we scale that business up,” Koppel said.

Borders space remains vacant
Nordstrom Rack will be the second clothing retailer to open at Shelbyville Road Plaza this year.

Ross Dress For Less opened earlier this month in a 28,000-square-foot space that had housed a Wild Oats store.

But a 26,000-square-foot space that previously housed a Borders bookstore remains vacant in the St. Matthews shopping center.

Edwards said Hagan officials still are determining whether the space should be leased as one space or be broken up for multiple tenants.

Edwards has spoken with several potential tenants since Borders closed in October 2011.

The shopping center’s newest tenant might help attract more interest, Edwards said.

“There might be some tenants who would like to piggyback off Nordstrom Rack being here.”

By Andrew Robinson – Reporter, Louisville Business First
Nov 5, 2012, 3:01pm EST Updated Nov 5, 2012, 3:16pm EST

Ross Stores Inc. is planning to open a Ross Dress For Less location at 4600 Shelbyville Road in the Shelbyville Road Plaza shopping center.

The store will occupy the former Wild Oats space, which is about 28,000 square feet, according to Tommy Edwards, a retail leasing representative for Hagan Properties Inc., which owns the property.

Wild Oats closed the store in 2007, following its merger with Whole Foods.

Edwards said he expects Ross Dress For Less to open in March.

Ross Dress For Less opened a location at Jefferson Mall earlier this year.

Ross Stores (NASDAQ: ROST) is based in Pleasanton, Calif., and operates 1,097 Ross Dress For Less stores across the country.

Ross offers discounted name-brand and designer apparel, accessories, footwear and home fashions, according to the company’s Web site.