Expansion plans for Vancouvercenter Apartments in downtown Vancouver are on hold while its owner is entangled in an international legal battle.
Ahmed Saeed Mahmoud Al Badi, who owns the apartment complex, faces a multimillion-dollar lawsuit alleging he defrauded a Missouri company on a government contract to outfit the United Arab Emirates with medical software.
The company, Cerner Corporation, hopes to seize the $30 million complex and any other assets to recoup about $60 million it claims to have lost on the project.
The three-building mixed-use complex is owned by Vandevco, which in turn is owned by Al Badi’s company, Belbadi Enterprises. Both companies are named defendants in a complaint filed with the U.S. District Court of Washington in Tacoma.
Steve Horenstein, general counsel of Vandevco, argued that the case should be heard only in the United Arab Emirates, where the issue started.
“We don’t think this case belongs in the United States,” he said.
Vancouvercenter, meanwhile, is not filling any vacancies and missed its previous Oct. 31 soft deadline to break ground on a new six-story tower. A development agreement with the city of Vancouver requires the tower to be completed by Oct. 31, 2017, or face a fine of $3,000 per day.
Horenstein was optimistic the suit would be sorted out and Vandevco could complete the project on time. The company applied for loans from the U.S. Department of Housing and Urban Development and its bank loans are in waiting.
“The lender is continuing to proceed, but we need to get it resolved prior to financing to become complete,” Horenstein said. “Banks don’t loan when litigation is pending.”
Vancouvercenter’s three existing towers were completed in 2004. The fourth has always been planned, but the economic downturn prompted developers to postpone it.
In 2015, Vandevco and the city agreed to push back the fourth tower again and down-scale it from eight stories to six. Retail space also was cut from 10,000 to 2,200 square feet.
Medical records system
According to court documents, the cause of the legal knot started with a project in Al Badi’s homeland, the United Arab Emirates. Al Badi is a graduate of Lewis & Clark College in Oregon and sits on its board of trustees.
In 2008, the Emirati businessman’s company iCapital was awarded a $94 million contract by the United Arab Emirates Ministry of Health to design and establish a medical records system for the country’s hospitals and clinics.
ICapital then subcontracted a subsidiary of Cerner Corporation, a medical technology company based in Missouri. However, iCapital reportedly fell behind on payments while Cerner completed the contract, court documents said.
After going to arbitration on two separate occasions, Cerner filed complaints in Washington and Oregon seeking assets belonging to Al Badi, including Vancouvercenter and a stretch of land in Washington County in Oregon. The Washington state suit seeks $63 million.
Lawyers for Al Badi and his companies argue, among other things, that the companies and their assets are separate.
