A settlement has been reached in the lawsuit brought against the City of Delaware by the developers of the Seattle House apartment complex located across from Glennwood Commons on the east side of Delaware.
File photo | The Gazette
The City of Delaware recently reached a settlement agreement with a Columbus developer over water fees in the city, bringing a years-long legal battle closer to a conclusion.
The dispute began in 2020 when Seattle House LLC filed a lawsuit against the City of Delaware in the United States District Court’s Southern District of Ohio claiming the city’s water fees are “discriminatory.”
The developer had previously purchased 24.2 acres on the city’s east side across from Glennwood Commons and developed 240 one- and two-bedroom apartments on the property. In the developer’s complaint, it states the company had to pay fees totaling $1,917,883 to tap into the city’s water and sewer lines. The developer states it contracted an independent third party to investigate the fees and claimed the developer should have paid nearly a third of that price. The lawsuit also claimed the city’s fees to tap into water and sewer lines violated the Fair Housing Act of 1968 and alleged the fees were causing an affordable housing crisis.
The city denied the allegations, calling them “baseless.”
The parties entered into mediation in the spring of 2022, and in November of 2022, they told the court they had reached a tentative agreement but were snagged on revisions to the agreement.
During the March 11 City Council meeting, members of council approved an ordinance allowing City Manager Tom Homan to execute a settlement agreement with Seattle House.
In a fact sheet about the ordinance, the city maintained the fees paid by Seattle House were “supportable and defensible” and said after discussions with the developer, they were able to reach “a negotiated agreement to settle their dispute to their satisfaction without the City admitting any liability or wrongdoing concerning fees charged by the City to connect to its sanitary sewer and water supply systems.”
The agreement states that within 60 days of the approval of the agreement, Seattle House will receive $515,000 as a settlement payment. The March 11 ordinance authorized the city to appropriate $100,650 from the Water Capacity Fee Fund and $64,350 from the Wastewater Capacity Fee Fund to satisfy the city’s obligation as part of the agreement for a total refund of $165,000. The remaining $350,000 is paid by the city’s insurance.
On April 30, the parties released a joint statement on the City of Delaware’s website announcing the agreement to resolve litigation.
“Seattle House LLC and the City of Delaware are appreciative of each other’s willingness to find a creative solution that includes commitments from both Seattle House LLC and the City of Delaware that will positively impact Delaware city residents and protect city interests,” the statement said. “…Our agreement will increase available workforce housing within the City for the foreseeable future.”
The statement was signed by Homan and Seattle House LLC President Rowland (Tre’) Giller III.
“We look forward to working together in partnership,” the statement concludes.
On Sept. 25, 2023, Judge Edmund A. Sargus issued an order administratively closing the case until the parties reach a settlement. According to the agreement, the parties would file a joint request to reopen the case and stay litigation.
The settlement states the city and Seattle House will enter into a three-year “development period,” and during that period, the city shall “make good faith efforts to approve” a 360-unit multifamily development by Seattle House.
The agreement states the capacity fees for the development shall be no greater than $522,000.
Additionally, the agreement requires the city to “take all reasonable steps necessary to approve legislation authorizing a 10-year, 70% community reinvestment area (CRA) real property tax abatement” for each building within the Seattle House development. If the CRA is not approved, the city is required to take steps to approve a tax increment financing incentive district (TIF District). In the agreement, the parties agree that establishing and maintaining the CRA abatements or TIF exemption are a “critical component” of the agreement.
The agreement states that at the end of the development period, the parties will file a stipulation to dismiss the case.
Glenn Battishill can be reached at 740-413-0903.
