FORT MILL — MorningStar is suing York County, disputing that it has defaulted on an agreement to renovate the former Heritage Towers in the Fort Mill area.

The ministry says the county’s default notice has “caused significant financial harm,” making it almost impossible to renovate the unfinished 21-story tower that was originally intended to be one of the signature pieces of the Heritage USA theme park run by Jim and Tammy Faye Baker.

Dave Yarnes, vice president of MorningStar and lead developer, said in a news release Thursday that the ministry was ready to “immediately begin site preparation, repairs and cleaning to the facade, but for the concern that the expense might be wasted.”

Yarnes said, “They have stopped us when we would be moving on it.”

York County officials said they had not seen the suit and declined to comment specifically.

Anna Moore, interim county manager, could not be reached for comment.

Michael Johnson, who represents the Fort Mill area on the York County Council, said, “It is unfortunate that this matter has ended in suit. That being said, this will finally allow both sides to bring this matter to a conclusion and end this long-standing dispute. From this point forward, I will rely upon our attorneys and the court system to decide the fate of the tower.”

County attorney Michael Kendree said the suit would bring the issue “to the forefront and allow the issue to be independently judged.”

He said the county’s response would come within the 30-day period allowed by law.

County Council Chairman Britt Blackwell said he was sure the county “did its part” in the talks with MorningStar. “We will just have to see what happens.”

York County and MorningStar have had a contentious relationship since Rick Joyner, the founder of MorningStar, purchased the unfinished tower and other PTL property for $1.6 million in 2006.

Initially, plans called for MorningStar to demolish the tower, which the county feared was structurally unsafe. In its news release Thursday, MorningStar said the tower is “remarkably sound from a structural and engineering standpoint.”

In 2007, MorningStar began efforts to renovate the tower and later signed a development agreement with York County in January of 2008. The agreement was in effect for five years unless extended or terminated by either party.

Kendree said the agreement is still in force. He said the county and MorningStar had recently completed mediation, but nothing was resolved. He said the county had been awaiting a response from MorningStar.

MorningStar has been threatening to sue the county for some time.

One of the points of contention was what the agreement required.

The county’s position is that the development agreement requires MorningStar to obtain bids and proof of financing, all within 180 days of site plan approval. The County Council approved the site plan in 2009. Former York County Manager Jim Baker has previously said the county never received proof that MorningStar had the needed financing.

In its suit, MorningStar contends that it was not obligated to provide the county with bids or financing before receiving approval of the site plan, and that it was not notified the site plan had been approved.

On March 19, 2010, the County Council rejected the ministry’s proposal for fixing up the tower’s exterior and its request for five more years to complete renovations.

MorningStar said the notice “virtually froze” its renovation efforts. The ministry’s news release states that MorningStar has received deposits from 197 people reserving units in the tower. MorningStar also had spent $1.5 million on architectural and engineering work.

According to MorningStar’s suit, York County’s default notice has caused “numerous purchasers” to withdraw their reservation agreements. The cancellation of the agreements has made it “considerably more difficult” for MorningStar to obtain financing.

MorningStar has asked the court to find it did not default on the agreement and that the ministry is entitled to a judgment against York County for “all damages” caused by the alleged breach of the development agreement.

News of the suit did not surprise Eric Kinsinger, a resident of an adjacent neighborhood, Baden Village. Kinsinger, who can see the tower from his home, is the founder of the “Tear The Tower Down” group.

“It was just a matter of time before this would happen,” Kinsinger said Thursday. “There have been problems on both sides. MorningStar has not been 100 percent truthful, and York County has not followed through on this.”

Kinsinger said a suit was the best thing “because it would be open court, not hidden in mediation.”

Columnist Andrew Dys contributed

Don Worthington 803-329-4066

Here is the news release from MorningStar:

MorningStar Fellowship Church announced today that it has filed suit against York County concerning the redevelopment of its Heritage Towers project. MorningStar’s suit claims York County erroneously asserted that MorningStar is in default under its development agreement connected to the Tower, and that has caused significant financial harm. MorningStar’s claim also states that the County failed to act in good faith. MorningStar purchased a 54 acre parcel, including its Grand Hotel and Ministry Center along with the 21 story unfinished Tower, several years ago and has systematically redeveloped the buildings and grounds. MorningStar entered into a development agreement with York County that included plans for redeveloping the Heritage Towers Project. The suit states that the County incorrectly contended that Morningstar had defaulted under the agreement. That brought the project to a halt, and the pending nature of it has left the project stalemated.

The Tower was initially constructed and left unfinished by prior owners of the campus, and it is remarkably sound from a structural and engineering standpoint. MorningStar had initiated efforts to complete the Tower, but the recession interfered with financing efforts for virtually all large residential projects nationwide and particularly in this area. Coming out of the recession, MorningStar commenced efforts to complete the Tower, but the default notice from York County virtually froze those efforts in place.

Completion of the Tower requires institutional financing, which depends in turn upon a showing of demand. The process is methodical and must be completed before construction commences. Morningstar had tentative financing commitments, and 197 persons had paid deposits to reserve a unit in the Tower. Morningstar also expended $1.5 million on engineering and architecture expense in anticipation of completing the Tower. Model units, scaled exactly to reflect those planned for the Tower and fully furnished and upfitted to show exactly how living space in those Tower Units would be, now wait for prospective Tower residents to walk through them. The effect of the Default has made it realistically impossible to market units in the Tower or to obtain construction financing. MorningStar states that, other than a vocal minority in the area, tens of thousands of people have continued to visit its campus with many of those expressing desire for permanent residence in the Tower. The surrounding community also sees this as a significant financial gain to the area, as the Tower Project would bring in hundreds of jobs initially, dozens of jobs long term and would allow active adults from around the globe to spend their money on local services and goods in York County.

Rick Joyner, founder and President of MorningStar Ministries gave the following statement: “We have been unable to get a realistic resolution in discussions or mediation with the county and have been left with no choice except litigation. We have stated our case to them on many occasions and have received no response that would allow us to continue the development of our Tower project.”

Joyner also stated, “We would never initiate a suit like this lightly, or without sound advice, but at this point in time we feel that we have an obligation not only for the considerable asset that the Tower represents but to all of our constituents as this represents a $12 Million asset that the County is rendering valueless.” The Tower Project that MorningStar has developed would be a part of its campus, which already has a significant and growing residential community; over the last two years the number of long term residents has tripled. The community at large in area of Regent Park, Fort Mill has also grown.

Dave Yarnes, Vice President of MorningStar Ministries and Lead Developer had the following to say, “At the end of the day we are trying to rebuild an asset that has been certified, sound and buildable by credible engineers.” Yarnes continued, “Hardly a day goes by where members of the community don’t call me and say they are rooting for us. They can’t see why the County would impede such a significant project.”

Mr. Yarnes said that, but for the problems created by the County, Morningstar could likely start construction in 2014. Meanwhile, he said, that in good faith, Morningstar is ready to immediately begin site preparation, repairs and cleaning to the façade, but for the concern that the expense might be wasted. “We did not spend $1.5 million on engineering and architecture, create model units and start marketing just so that we can leave the Tower in its current state. “They have stopped us when we would be moving on it.”

Yarnes also stated, “The local developers are behind us as well. The community is growing and they see this project as a great fit. We really just want to go about completing the Tower construction in the way that any responsible developer would, and we see a beautiful first-class facility at the end of the process.” The law firm James, McElroy, and Diehl Law, is representing Morningstar in the case.