SARANAC LAKE – Malone real estate developer Chris LaBarge was planning to drop his proposal for a 93-room resort on the Lake Flower shoreline last year and instead build a smaller, chain hotel.

That’s according to court documents filed in Essex County last year in support of a lawsuit LaBarge’s company brought against David Manning, the owner of one of the motels he was under contract to purchase, and Jacob Wright, LaBarge’s former development partner. The case settled out of court last fall.

However, LaBarge has a breach of contract lawsuit that appears to still be pending against the owners of a River Street parcel that would be used for parking for the resort.

These and the other documents shed some new light on the rift between LaBarge and Wright that led to a new group of so-far-unidentified investors, with Wright as their point man, taking over the controversial hotel project last year.

Contract dispute

In June 2015, LaBarge and his companies, CAL Equities and Lake Flower Lodging LLC, filed suit against Wright and Lake Side Motel owner David Manning.

Manning and two other Lake Flower motel owners, Kim Walasky of the Lake Flower Inn and Fred and Susan Mueller of the Adirondack Motel, had signed contracts two years earlier to sell their properties to LaBarge. The deal between Manning and LaBarge was for $699,000.

As the review process for the resort dragged on, Manning agreed to extend the closing date several times. The last extension, in March 2014, said the closing date would happen “as soon as possible upon final approval authorizing a building permit for construction of the proposed hotel project.”

On May 29 of last year, Manning’s attorney, James Brooks of Lake Placid, sent LaBarge’s company a letter saying the March 2014 extension gave the deal “a closing date so indefinite that the contract of purchase is now and would be declared by a court as unenforceable.” Brooks said Manning had a sizable mortgage payment due and was facing possible foreclosure. He set a closing date of June 15.

LaBarge didn’t appear for the closing, and in a subsequent letter, dated June 15, Brooks notified LaBarge that Manning had declared their contract terminated. Brooks accused LaBarge of taking advantage of Manning by encouraging him to sign the original sale contract without legal advice, and of making “serious misrepresentations” of the legal ramifications of the contract extensions.

LaBarge’s lawsuit argued that the contract extension language “has a clear end point … and is neither indefinite nor open-ended.” He said Manning breached the contract by unilaterally imposing a closing date and later terminating the contract.

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LaBarge vs. Wright

LaBarge also accused Wright of interfering in his contract with Manning, citing a letter Brooks sent him on June 12, 2015. In the letter, Brooks said he had been retained by Wright to secure his contractual rights because of disputes between LaBarge and Wright.

“If the disputes between LaBarge and Wright are not resolved, the project still needs to move forward as originally proposed,” Brooks wrote. “If not, all the capital heretofore injected could be lost. My client does not intend for such to occur.”

Brooks said he had been advised that LaBarge planned to “unilaterally revise” the project and “cut out” his client. Court documents filed later include an April 1, 2015 email from LaBarge, apparently sent to Wright, in which LaBarge says he’s revised the project to a Hilton Garden Inn that would be about 11,000 square feet smaller.

“If you and your partners have interest to further invest in the project or buy me out, provide a proposal and I will certainly review with my attorney,” LaBarge wrote. “However, the project will continue in the direction of an HGI.”

This email was sent just two weeks after the village agreed to rezone the motel properties for the proposed 93-room, four-story resort.

In his June 12 letter, Brooks warned LaBarge that if the project was revised, the village board’s rezoning of the motel properties would end, and a $2 million state grant awarded to the project would be lost. The letter says Wright and “his group of investors” have allowed LaBarge to be the public spokesman for the project.

“That is about to come to an end,” Brooks wrote. “The public and the governmental entities … will be advised that Wright and his financial investing group are the major financial and creative forces behind the project. The facts are that LaBarge has made only a minor financial investment in comparison to Wright, and the design and development now favored by the village is a plan Wright generated and paid for.”

The letter goes on to list the amount of money Wright has put into the project, including securing financing, paying for most of the engineering and consulting work, including a state grant consultant and Lake Flower flood map revision, and putting down deposits on the properties involved in the deal.

These claims contradict what Wright told the Enterprise in July of 2015, after he revealed that he was no longer involved with the resort project. He said then that he was only “kind of consulting” on it.

“It’s really all Chris,” Wright said at the time.

Brooks’ letter said Wright was willing to buy out LaBarge by reimbursing his costs and paying him $300,000 cash. If LaBarge decided to block that transition, the attorney said Wright would take LaBarge and his companies to court.

If a resolution wasn’t reached by June 17, Wright planned to go public with his group without LaBarge, Brooks wrote, and would notify the property owners and the village that Wright had taken over the project.

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Settlement

A resolution apparently wasn’t reached then, because the day after that deadline, LaBarge filed his lawsuit against Manning and Wright. He claimed Brooks’ June 12 letter was proof that Wright intentionally got Manning to breach his contract with LaBarge, “so he could transact to purchase the subject property himself.”

On July 29, Brooks filed an answer to LaBarge’s suit and made a series of counterclaims, but an out-of-court agreement was reached in late October. A notice filed with the court says the claims asserted by LaBarge and Manning against each other were “discontinued with prejudice” based on an undisclosed settlement.

In late November, Wright revealed publicly that he and another group of investors had taken over the project from LaBarge, secured agreements from the property owners and were moving forward with the planned 93-room, four-story hotel under a different name, Saranac Lake Resort LLC.

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Back in court

LaBarge wasn’t completely out of the picture, however. On Dec. 11, his company CAL Equities filed a lawsuit against Eric and Kristina Isachsen, the owners of 203 River St., a property that’s been included in the village’s PUDD as parking for the resort. In August 2013, LaBarge signed a deal with the Isachsens to buy the property for $178,900.

LaBarge says the Isachsens notified him on Dec. 4, 2015 that they were ready to complete the contract, but they’ve since refused to sign the deal. LaBarge said the Isachsens are in breach of contract and asked the court to order them to convey title of the property to him.

In mid-February, an attorney for the Isachsens filed a third-party claim against Saranac Lake Resort and LaBarge’s two companies: CAL Equities and Lake Flower Lodging. It says their real estate agent had received an email from LaBarge on Nov. 19 saying he agreed to release CAL Equities and Lake Flower Lodging from the contract, but nothing formal was signed. The Isachsens subsequently signed a deal to sell the property to Saranac Lake Resort, Wright’s new company, for $189,900.

“By reason of these conflicting claims, the Isachsens face the potential of being contractually obligated to sell the property to two different purchasers,” their attorney wrote in their third-party claim.

They Isachsens asked the court to determine which contract is enforceable, but that never happened. An attorney for the Isachsens filed a notice last month discontinuing the third-party claim, but the Enterprise wasn’t able to determine the status of the case as of press time.

Saranac Lake Resort has moved quickly since it first announced its takeover of the project in November. It has applications pending before the village Planning Board and the state Adirondack Park Agency.