Delaware City Council is weighing an ordinance that would execute a settlement agreement with T&R Properties after the real estate development company claimed damages against the city in 2019. The claimed damages stem from the capacity fees paid by T&R Properties to the city in order to connect to the city’s sanitary sewer and water supply systems as part of The Flats on Houk Apartments development constructed in 2019.
If the ordinance is approved, the city will settle with T&R Properties in the amount of $279,540, ending the lawsuit that was filed against the city in June 2020. However, even should the settlement be agreed upon, the city is not admitting any liability or wrongdoing regarding the fees charged at the time.
Documents for the ordinance suggest the city had started the process of assessing its capacity fees at the time the fees were imposed on T&R Properties in order to make those fees current with the costs to the city. During Monday’s Delaware City Council meeting, members approved changes that will lower the capacity fees for both the sanitary sewer and water supply systems. As a result, the water capacity fee has been lowered by $738 per economic development unit, and the sewer capacity fee by $2,240 per economic development unit.
The $279,540 to potentially be paid to T&R Properties would represent the difference between the rates at the time of development and those just approved.
Monday’s reading of the ordinance was the second, and City Attorney Natalia Harris recommended it go to a third reading before a vote is cast. The third reading will be held at council’s next meeting, which is scheduled for Monday, April 5.
Meanwhile, litigation is still ongoing between the city and Seattle House LLC regarding city capacity fees alleged by the company to be illegal and discriminatory against so-called affordable housing. Seattle House has constructed a 240-unit apartment complex north of U.S. Route 36/state Route 37 and south of Bowtown Road on the east side of Delaware.
Joseph R. Miller, the attorney handling Seattle House’s lawsuit, claimed in July 2020 the city overcharged the developer by more than $1.2 million, and such fees only exacerbate a perceived affordable housing crisis.
