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Austin Jury Rejects Developer’s Tortious Interference Claim over Ambitious Sixth Street Project

June 1, 2022 Bruce Tomaso

A Travis County jury ruled two weeks ago that a group of developers, property owners, investors, and others did not tortiously interfere with plans for an expansive mixed-use development on Austin’s Sixth Street.

The jury found against Elevate Development, an Austin company that sought to acquire six parcels on the south side of Sixth Street between Rio Grande Street and West Avenue, a location described by Elevate in a 2020 lawsuit as “one of the most vibrant parts of Austin.”

In its suit, Elevate leveled allegations of conspiracy, unjust enrichment and tortious contract interference against an array of defendants, including Kairoi Management of San Antonio (and related business entities) and brothers Shabawn and Kahran Espili, proprietors of Whiskey Tango Foxtrot Icehouse at 701 W. Sixth St.

The Espili brothers lease the property on which their bar sits and, according to court documents, had a right-of-first-offer agreement to purchase the parcel from its owner, a business entity controlled by William Paul Danforth Jr., a well-known Austin real estate investor. The agreement was non-transferrable, according to the Elevate suit. But after learning of Elevate’s plans for the parcel and five adjoining ones, the suit said, the brothers sought to circumvent that non-transfer agreement through a series of sleight-of-hand maneuvers and transactions. Elevate argued in court that it would have profited by $40 million had it been able to acquire and develop the properties.

At the conclusion of a two-week trial in the court of state District Judge Maria Cantú Hexsel, the jury on May 20 rejected the plaintiff’s claims, deciding with the defendants on all questions.

Elevate’s lead attorney in the case, Eric J.R. Nichols of the Austin office of Butler Snow, said: “Elevate Development is evaluating its options in terms of next steps at the trial court and potentially on appeal.”

Most of the defendant business entities were represented by a team from Scott Douglass & McConnico of Austin that included Sara Wilder Clark, Casey Dobson and John Ellis. The Espili brothers were represented by Dan Richards of Richards Rodriguez & Skeith of Austin.

“Juries usually do the right thing,” Clark said. “This one sure did.”

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