Richmond, Va. — A Richmond Circuit Court judge has dismissed a $40 million lawsuit brought by developer Republic Properties against its former partners in the Diamond District project, a sprawling development initiative in Richmond. While the suit has been rejected, the legal skirmish could see new life as the plaintiff considers adjustments to their complaint.
The legal action arises from a partnership dispute over the 67-acre, ballpark-centered urban development bordered by Arthur Ashe Boulevard, Hermitage Road, the interstate, and railway tracks. Republic, a D.C.-based firm, originally assembled a group named RVA Diamond Partners LLC, including locally based Thalhimer Realty Partners and Chicago’s Loop Capital, to bid for and advance the project.
However, disagreements surfaced when Republic declined to endorse a preliminary development agreement. Subsequently, Thalhimer and Loop formed a new entity, Diamond District Partners LLC, and renegotiated the development pact with the city, excluding Republic from the arrangement. According to Thalhimer, Republic had explicitly communicated its withdrawal from the project.
In the courtroom, Judge Bradley Cavedo determined that no formal partnership had been established among the parties as they had not finalized or signed an operational agreement for the LLC. The judgment noted “a distinction between pursuing a contract and carrying on as co-owners of a business.”
Republic suggested in its lawsuit that even in the absence of a formal agreement, a de facto partnership had existed, a point the court reviewed but ultimately did not endorse. Citing the Virginia Uniform Partnership Act, Judge Cavedo elaborated that while the act clarifies certain behaviors indicative of a partnership, it simultaneously protects entities from being compelled into an unintended partnership structure.
Despite the lawsuit’s dismissal, the court has granted Republic 28 days to modify and refile their complaint. Republic’s attorney, Edward Tolchin, indicated that amendments to the suit are forthcoming.
In response to the ruling, Lee Warfield, CEO of Thalhimer, expressed satisfaction and conveyed that the sole focus now was the project’s realization, which he said would benefit Richmond’s residents and its visitors.
The Diamond District project, now primarily under the stewardship of Thalhimer through Diamond District Partners LLC, includes significant developments such as a new baseball stadium planned to replace the existing The Diamond. This stadium component is being overseen separately by the Richmond Flying Squirrels and financed through city bonds.
Loop Capital had earlier sought exclusion from the lawsuit, maintaining that it had neither agreed to join any of the LLC configurations nor retained any interest or involvement in the ongoing project.
The shift in the project’s development team occurred as the city adjusted its financing strategy for the ambitious $2.4 billion mixed-use initiative. Thalhimer’s revised team now is set to develop a 30-acre first phase of the Diamond District.
While the court’s decision marks a setback for Republic, the firm contends it risks a $40 million loss from its exclusion in the project. Representation for Republic includes Tolchin and additional local counsel David Harless of Christian & Barton.
Legal representation for the Thalhimer and Diamond District Partners includes Harold Johnson of Williams Mullen, while Alan Bart and Daniel Herbst of Reed Smith defended the Loop associates.
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