Engquist sues Hogstrom over issues at Adelia and in North Carolina

    Mike Hogstrom and his firm, Onsite Design, are at the center of two lawsuits filed Monday in state and federal courts by businessman-turned-developer John Engquist and his son, Ryan Engquist.

    The two suits are unrelated—one deals with issues at Hogstrom’s residential development, Adelia at Old Goodwood; the other is over disputed building plan fees in North Carolina. Taken together, however, the two actions are the surfacing of a long-simmering feud between Hogstrom and the deep-pocketed Engquist, whose initial investment in Adelia enabled Hogstrom to get the project off the ground.

    “John Engquist took many steps over the past year to resolve issues with Mike Hogstom,” says Engquist attorney Loren Kleinpeter, who declines to elaborate on what those issues are. “Hogstrom has continued to press.”

    Hogstrom says he cannot comment.  

    The lawsuits shed at least some light on the disputes. The first suit, in the U.S. Middle District Court, is over supposed broken promises and alleged problems at Adelia, Hogstrom’s residential development on the 17-acre tract surrounding the 165-year-old Adelia Plantation fronting Goodwood Boulevard.

    The suit was filed by Ryan Engquist, who owns two lots in the 47-lot development, and Tim Basilica, a former Hogstrom employee, who owns one lot in the development and now works for Engquist Development.

    According to the suit, Engquist and Basilica bought into the project based on several representations Hogstrom made, namely: 1) the majority of lots were already pre-sold, 2) Adelia would be an upscale, custom-built neighborhood, 3) landscaping and other improvements would be completed by December 2018, and 4) the renovation of the plantation house would begin by March 2019.

    None of those has turned out to be true, according to the suit, which notes that renovations to the house have not begun, street lights have yet to be installed, landscaping hasn’t been planted, and no walls or gates have been constructed around the perimeter.

    The suit also takes issue with a recent rezoning request filed by Hogstrom, which would allow the developer to add condos, offices and townhomes to the development, both in and around the old plantation home. Such uses were not permitted under the terms of the deal Engquist and Basilica signed, the lawsuit says.

    The suit also takes issue with what it says are unfair assessments leveled by the property owners’ association against only certain homeowners, among them Basilica.

    The suit seeks a jury trial and damages, claiming Hogstrom and his company defrauded Engquist and Basilica.

    John Engquist never disclosed the amount of his investment in Adelia, which Hogstrom first announced in 2015. Engquist got out of the project in early 2018, saying at the time that he had recouped his investment in full.

    In the other lawsuit, filed in the 19th Judicial District Court, Engquist’s North Carolina-based construction company, Level Carolina Homes, is asking a judge to resolve a dispute over some $22,000 in building plan fees Hogstrom has claimed Onsite Design is owed for work it did for Level in the Raleigh area.

    According to the suit, the two firms entered into an agreement in 2014, whereby Level would use some of Onsite’s building plans to develop homes there. In November 2018, however, Onsite began charging a $500 per plan “reuse fee” that the two had never agreed on.

    Level stopped using the plans, the lawsuit says, but earlier this spring, Onsite sent Level a demand letter for $22,000. The two sides have attempted unsuccessfully to negotiate a settlement. Level maintains it doesn’t owe any money to Onsite.

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