Coming soon to a courthouse near you: Ponderosa Land Development Co. and the bank corner that got away: “Ponderosa bought nearly an acre in Sugar Land three years ago from Gateway Financial for a price of $1.8 million.
The land at the corner of State Highway 6 and Settlers Way was purchased for development of a JP Morgan Chase Bank branch.
Over the past five years, Ponderosa has built about 50 bank branches in Texas for Chase Bank.
[Ponderosa's James] Chang says Ponderosa had already secured a long-term ground lease with the bank, and an investor was lined up to buy the property once the building was complete.
Shortly after the land acquisition closed in April 2007, Ponderosa demolished a gas station that was operating on the site to prepare for construction of the bank branch.
In the process, Ponderosa learned that the Sugar Land site carries a deed restriction prohibiting construction of a financial institution.
The alleged oversight on the part of AmeriPoint [Title] in conducting a title search put the brakes on development.
‘Missing the restriction was kind of an important miss,’ says Chang.
Stewart Title wrote a title insurance policy based on AmeriPoint’s work. . . . Ponderosa filed suit in July 2008 to recover the $1.8 million land purchase price. The firm is also seeking $1.6 million for three years of lost profits.
Ponderosa tried to collect on the firm’s $1.8 million title insurance policy, but Chang says Stewart Title claims the diminished value of the land is $200,000.” [Houston Business Journal]