MEMPHIS, Tenn. — The Chicago-based hotel group that recently bought the Madison Hotel in Downtown Memphis is kicking a local family out of its home of 25 years, and sued the family for $102,000.
The hotel is famous for its rooftop bar overlooking the Mississippi River. Less well-known is the modest condominium attached to the building, where Christopher Reyes has lived with his family for more than two decades.
Aparium Hotels purchased the hotel at the corner of Main Street and Madison Avenue in 2016. The company claims Reyes, a local artist, lives on the property unlawfully.
A Shelby County Circuit Court judge sided with the hotel over the ownership dispute Tuesday, and ordered the family to pay Aparium Hotels $102,000 and move out of the condominium within 10 days.
Reyes left the courtroom in tears.
The family's attorney said they're disappointed with the court's decision, but they're considering their options. The judge said the family has 10 days to appeal the ruling.
Reyes moved into the condo in 1993, after he and his mother, Vernice Kuglin, reached an agreement with Downtown Memphis Developer Henry Turley.
Ownership of the building and the attached condo was blurred by a "Payment In Lieu Of Taxs" or "PILOT" lease with the City of Memphis that was effective from 1986 through 2015.
Reyes and Kuglin said they were promised a purchase option when the PILOT expired. They said they've been paying a mortgage, and pouring equity into the property since 1993.
Making matters more complicated, Turley sold his interests in the early 2000s, and the family said it never reached a formal agreement with the new owner regarding payment obligations for maintenance and other costs.
Reyes and Kuglin said they sought legal advice in the early 2000s, and were told by attorneys that the agreement with Turley was carried over to Madison Hotel owners who followed Turley.
When the PILOT expired in 2015, the family said they weren't given an opportunity to buy the property. Instead, Aparium Hotels serviced them an eviction notice and filed the lawsuit.
In court, the attorney for Aparium Hotels argued the case is simple.
"My client owns this property," Attorney Josh Kahane said, describing Reyes and Kuglin as "holdover tenants."
"She knew she had an obligation to pay maintenance and taxes and insurance, and yet she didn't pay them," Kahane continued.
Kahane and the hotel group argue the purchase option expired when Turley sold the property in the early 2000s.
"They have never exercised their option, because the option is dead," Kahane said.
Michael Kitchen is the Vice President of Acquisitions and Development for Aparium Hotels.
"We don't want to be here any more than anybody wants to be here," Kitchen said after the court hearing. "We want to focus on our improvements to Downtown Memphis."
FOX13's Kristin Leigh asked Kitchen, "Are you going to require the family to pay $100,000? Is that fair to a family of four?"
"That's for the court to decide," Kitchen said. "That's not my judgement."
Kitchen's attorney walked him away from FOX13's cameras after the court appearance.
"Thank you guys so much for your interest in this case," Kahane said. "We appreciate you."
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