Family packs up home of 25 years amid condo dispute with new Madison Hotel owners

WATCH: Family at center of Downtown condo dispute speaks to FOX13

Christopher Reyes was emotional Monday as he and his longtime partner, Sarah Fleming, packed up their family's condo at the corner of Main Street and Madison Avenue in Downtown Memphis.

The new owners of the neighboring Madison Hotel claim the condo is part of the property they purchased in 2016. Aparium Hotel Group sued Reyes, arguing his family is living in the condo unlawfully.

A GoFundMe has raised more than $20,000 to help the family fight to keep the second-floor condo Reyes says he's owned since the early 90's.

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As local artists, the couple's supporters feel Reyes and Fleming have contributed to the renaissance that's breathing new life to Downtown Memphis, which has seen increased interest from developers in recent years.

"Through the community we've seen that people really do care about what we've done," Reyes said, tearing up as he described the emotional roller coaster his family has been on in recent months. "It's been really hard because suddenly it feels like that has turned on us."

The Madison Hotel was purchased last year by Aparium Hotel Group, who sued Reyes and his family for $100,000 in damages, and asked a judge to evict Reyes, Fleming and their two young daughters.

The hotel group argues the family is living in the condo unlawfully, and a Shelby County Circuit Court Judge agreed.

Last week, Judge Lonnie Thompson sided with the Chicago-based hotel owner, ordering Reyes and his family to pay the $100,000 to move out of the condo.

"It's been one of the most stressful things outside of having a newborn that I've ever had to deal with," Flemming said.

Ownership of the condo is complicated by a "Payment In Leiu of Taxes" or "PILOT" lease with the Downtown Memphis Commission's Center City Revenue Finance Corporation.

The current DMC President did not respond to FOX13's request for an interview about the dispute.

Paul Morris is the former president of the Downtown Memphis Commission, who's familiar with the PILOT program and the property at the center of the dispute.

"I think everyone understood, including the new owners of the Madison when they bought the property, that the beneficial ownership interest was Chris's family," Morris said.

FOX13 discovered a letter Aparium Hotel Group sent to the CCRFC in 2016.

The new owner of the Madison Hotel identified the properties the hotel group had purchased. A yellow line on the map pinpoints Reyes and Fleming's building, and says the the hotel group acquired the "first floor and basement only."

The letter does not include Chris and Sarah's portion of the building on the second and third floors.

"It does show that even [the hotel group] understood that's not part of the property they were acquiring," Morris said, referring to the letter.

Morris further explained how the PILOT lease for the property complicated its ownership.

"The idea is [the CCRFC] is holding the title for the property merely for the purpose of granting the tax incentive to make the development happen," Morris said, clarifying that PILOT lease holders are considered owners, not renters.

"At the end of the PILOT incentive term, the property owner has the option to regain title to the property by paying a nominal amount," Morris said, explaining that Reyes should have had an option to purchase the title to the condo for $1 when the PILOT expired.

When Reyes purchased the property in the early 90s, the former owner did not have the property title because of the PILOT. For that reason, the former owner and Reyes agreed to a sublease.

"The sublease was not a PILOT lease, because it was not with the CCRFC," Morris said. "But it was modeled after a PILOT lease in as much as there was an option to purchase at the end of the term."

"Everyone at the time understood and the documents reflect that Chris and his family had all the beneficial ownership of that condo," Morris added.

As they packed up the condo Monday, Reyes and Fleming considered their options.

Last week, the judge ordered them to leave the property within 10 days.

While the family can appeal the ruling, they would have to pay an eviction bond to stay in their home, in addition to the thousands of dollars the family wasordered to pay Aparium Hotel Group.

"Do you have that," FOX13's Kristin Leigh asked the couple.

"No," Fleming said.

"We have two daughters - a three-year-old and a 9-month-old," Fleming added. "Dragging them through this has been insane, worrying about what their future looks like."

Reyes said the hotel group has never given them an opportunity to discuss the condo, and find an agreeable solution.

"We thought that's what the process was going to be, that'd we'd have an opportunity to talk to them," Reyes said. "We've had no opportunity to talk to them."

Apparium Hotel Group could not be reached for comment Monday.

The current Downtown Memphis Commission President, Jennifer Oswalt, posted the following statement on Facebook, voicing support for Reyes and his family:

"Some of our online community may be aware of the conflict regarding Downtown residents Chris Reyes and Sarah Fleming.
Christopher Reyes and Sarah Fleming are an integral part of what makes Downtown Memphis what it is: interesting, colorful, engaging. Their creativity and dedication to this city and Downtown Memphis deserve to be heralded. The Downtown Memphis Commission has a long history of collaborating with Chris and Sarah on multiple projects and supporting their work in Downtown. We believe their contributions have made Downtown better. The investors who purchased the Madison Hotel were no doubt attracted to the neighborhood in part because of its authentic Memphis vibe, a vibe that Chris and Sarah helped create.
We believe in a Downtown Memphis that includes Chris and Sarah. And we have never stopped looking for ways to help make that happen. We are a community of creatives, artists, musicians, and makers. This creative heritage is what gives Memphis its very soul and authenticity. And we work every day to preserve it. 
We have expressed our concerns to the stakeholders of 1 S. Main LLC and hope that our appeal and those from other community leaders will help them to want to find a solution that works for all.
The Downtown Memphis Commission was created to develop 
Downtown for the betterment of the entire region and is tasked with increasing population and property values in our core city. It isn't always an easy or straight-forward job, but we work every day to preserve what is good and great in our city and to nurture what can be even better."