Astonishing in its animus and its initially enormous damage claims, litigation between two of the region's economic heavyweights - Citizens Bank of Pennsylvania and developer Brian O'Neill - is over.
Accompanying word of a settlement from O'Neill and the bank Friday was O'Neill's enthusiastic pronouncement that his long-stalled Uptown Worthington mixed-use development near Malvern - which stood at the center of the nearly two-year-long dispute - would soon rumble with new construction.
"Worthington has been a 15-year dream, and I'm now able to execute," O'Neill said.
He would not discuss the settlement of his lawsuit, which originally sought $8 billion in damages, saying he was "bound by confidentiality on the terms . . . and I'm going to honor that."
Spokeswoman Sylvia T. Bronner said Citizens Bank also would have no comment beyond a two-sentence joint statement issued by the bank and O'Neill Properties Group L.P. of King of Prussia. The statement said that the parties "have entered into a settlement agreement resolving all litigation between them. The terms and conditions of the settlement are confidential."
It amounted to Christmas come early at the Chester County Economic Development Council.
"We're very excited about this settlement because we need some good news," said Gary Smith, president and chief executive officer. His agency served as a financing conduit for more than $10 million in state grants that went to Worthington, a significant brownfield-remediation effort on 108 acres of the former Worthington Steel complex. "We're very enthusiastic about the transformation of that site to really become an economic gem for Chester County."
In all, the $700 million Worthington project was to include 1.6 million square feet of housing, shops, entertainment venues, a hotel, and high-value office space. Currently, it consists of just two stores - Wegmans and Target, which opened in summer 2010. O'Neill said 15 tenants were lost while the project was mired in the legal battle.
It was unclear whether the project would ever get beyond that stage once the court papers started flying.
O'Neill, one of the region's most prolific developers of residential and commercial properties, brought his suit against his company's longstanding primary lender in January 2010, amid a punishing economy for builders. The complaint alleged Citizens Bank breached its financial commitments to O'Neill and essentially ruined the Worthington development.
O'Neill later lowered the damages claim to $297 million, but let stand his contention that Citizens officials had defamed and disparaged him.
It was a stunning deterioration of an eight-year relationship premised on more than $180 million in financing for various projects.
Citizens Bank had struck first, securing a $61 million judgment against O'Neill in November 2009 for default on an office-construction loan for Worthington, located along Route 202 in East Whiteland Township. The next two months, Citizens followed with two more judgments totaling $3 million against O'Neill and his company in connection with the unfinished Horizon Corporate Center, a 101-acre mixed-use development in Bensalem.
O'Neill alleged that the bank destroyed Worthington by deciding in 2008, a time of recessionary credit-tightening, not to provide funding toward its $300 million-to- $400 million vertical phase, when buildings were to be constructed.
The bank countered that it had no written agreements with O'Neill for vertical financing and that he was trying to use litigation to get around what written agreements did exist.
The case never got beyond depositions and testy incremental hearings before Philadelphia Common Pleas Court Senior Judge Albert W. Sheppard Jr., who pleaded for a settlement. He would not live to see one, dying Sept. 4 of a heart attack at home.
Among those not surprised that an agreement had been reached was developer Bart Blatstein, chief executive officer of Tower Investments Inc. in Philadelphia, who said the real estate community has been "intrigued" by the O'Neill/Citizens wrangling.
"It's best for the bank, it's best for Brian, and it's best for the community," Blatstein said. "Brian is all about making that site special. It means tax revenue, jobs, and services that aren't there currently."
As Uptown Worthington progresses, it will be with modifications to the original plan, O'Neill said Friday, putting the value of the revised project at $400 million.
What were once envisioned as condominiums will be 753 apartments built in three phases, the first to begin within six months, if not sooner, O'Neill said. A 145,000-square-foot office building also will start within months, he said.
An additional 375,000 square feet of retail space is expected to accommodate 55 stores and 15 restaurants ranging from "fast casual" to fine dining. All restaurants will be required to have outdoor dining, and most will have removable storefronts, O'Neill said.
A fitness-related section of the project will be anchored by a 50,000-square-foot workout facility and with have access, like all the development, to the county trail system.
O'Neill described the availability of financing as "very strong" and said he expected the entire project, with the exception of some housing phases, to be completed by fourth quarter 2013. He said he also expected the retail portion to be more than 75 percent leased "before we put the first shovel in the ground."
Work on a PNC bank branch began about a month ago and is expected to be finished in 10 months. O'Neill had no comment when asked if he expected that a Citizens Bank branch would soon join it.