Tax-free county bonds trigger battle

One of the largest developers and commercial landlords on the Gulf Coast has sued a rising business star in the region over how it used more than $7 million in federally approved tax-exempt bonds.

The somewhat unusual situation pits the alleged jilted landlord, Manatee County-based Benderson Development, against IntegraClick, a Sarasota-based fast-growing online marketing firm with $120 million in revenues last year.

Benderson's beef revolves around $7.4 million in tax-exempt bonds Sarasota County gave to IntegraClick late last year through a program arising from the federal stimulus bill. IntegraClick used the bonds to buy a two-building, 79,000-sqaure-foot corporate headquarters in north Sarasota County.

But Benderson and several smaller Manatee County landlords contend IntegraClick used the bonds as leverage to offer reduced rents to perspective tenants for space in the building it wasn't using. Benderson and the other landlords filed the suit May 20 after a dermatology practice leased space in the building.

IntegraClick used the bonds, Benderson's attorneys allege in court records, “as a competitive advantage against similarly situated properties which must seek conventional financing and terms.” Benderson sued IntegraClick through Oak Park Partners, a limited partnership it owns.

IntegraClick CEO John Lemp says the company isn't a commercial real estate firm and has no intentions of competing head-to-head with a behemoth like Benderson. However, Lemp, the Review's 2010 Entrepreneur of the Year, says his intention is to carry out a plan to lease available space in the complex to up-and-coming businesses.

Moreover, IntegraClick, in court documents filed in June in response to the lawsuit, claims it followed the loan agreement it signed with Sarasota County. “It says for the first five years we can lease to anyone we want to,” IntegraClick in-house attorney Eric Grindley tells Coffee Talk.

In a separate motion, the company also says the case should be dismissed because Benderson has “no standing to enforce the terms of loan and financing documents to which they are not a party.” Adds Grindley: “We expect we'll be awarded fees and costs for having to defend ourselves against these allegations.”

The case has one more twist: Sarasota County is named as a defendant, a fact some attorneys familiar with the suit call procedural as opposed to alleged wrongdoing. The county recently filed a motion to be dismissed from the case, partially because it says the IRS governs the bonds at the federal level.

A judge is expected to hear motions and arguments on the case in late September.