While Powell City Council voted unanimously to approve a $1.8 million settlement in September to end a lawsuit, debate over the appropriateness of the decision has spilled over into the panel's subsequent meetings.
CV Real Property sued the city in 2014 after Powell voters approved a charter amendment banning "high-density housing" in the city's Downtown Business District. The amendment also included a specific provision blocking the development of CV Property's planned 64-unit apartment and retail complex known as the Center at Powell Crossing, set to rise near the city's Municipal Building.
A U.S. district judge in 2016 ruled in the developer's favor and invalidated the charter amendment. Council last month approved a settlement agreement in which the developer would resolve the lawsuit in exchange for $950,000 from the city and $850,000 from its insurer, Great American Insurance Group.
While the settlement may have ended the lawsuit, it started a series of new debates among current and prospective council members.
Examining the risks
Although the vote to pay the settlement was unanimous, two council hopefuls who are running together -- David Ebersole and Sharon Valvona -- have questioned the size and validity of the settlement ahead of the Nov. 7 vote.
Valvona and Ebersole's brother, Brian Ebersole, were leaders of the initial campaign to put the charter amendment before voters.
David Ebersole said he thinks the settlement is "extremely excessive." He said city officials have not given him an explanation of how the settlement equates with the potential damages.
"It's still a mystery to the citizens how they computed that $1.8 million figure," he said.
City spokeswoman Megan Canavan said the $1.8 million figure represents the end result of oral negotiations between the two sides. She said breaking the settlement down dollar by dollar is not feasible.
"There's no science to that number," she said.
Councilman Dan Swartwout on Oct. 17 said he viewed the settlement as a fiscally responsible move by council to avoid further financial risks from the case. He said the developer initially sought "much, much more" than $1.8 million.
In a Jan. 18 letter to an attorney representing the city, Joseph Miller, attorney for the developer, stated his client was "willing to settle for $3,682,165." Miller cited damages "stemming from increased construction costs, lost rents (and) lost land value" in the settlement request and claimed the developer would lose at least $32,000 per month if the legal fight continued.
"It was incumbent upon us to stop the bleeding," Swartwout said. "The city faced a dangerous, risky scenario if we litigated to the bitter end."
Swartwout said the city's insurer also warned Powell officials "damages in the ... litigation might not be covered" if the city did not settle.
"If we continued to fight, we would have risked losing millions of (residents') tax dollars with absolutely no insurance coverage," he said. "Instead, our insurance covered almost half of the damages."
Ebersole and Valvona also repeatedly have claimed city officials attempted to shield the settlement decision from public debate by releasing an incomplete agenda and voting on the measure after one reading of the legislation.
Ebersole previously said he wants the city to "vacate the decision and hold a new hearing so that the public has an opportunity to be heard."
Councilman Tom Counts said the nature of the case led council to act rapidly after the city reached a settlement agreement with the developer.
"Until an offer is accepted, it can be revoked," he said. "My personal opinion is, it was in the best interest of the city to accept that settlement offer as quickly as possible."
Revisiting the vote
Ebersole and Valvona also have questioned how pro-settlement residents knew to come to the Sept. 19 council meeting, during which the agreement was approved. Councilman Brendan Newcomb on Oct. 3 echoed some of their concerns regarding the agenda and speakers.
He said select members of the public appeared to know information discussed by council and staff members in closed-door executive sessions conducted ahead of the vote.
"All appearances indicate confidential information was leaked, duties (were) breached and trust (was) broken," he said.
Newcomb said he also worried antisettlement residents also were not being given the same treatment when they spoke before council. Before council voted to approve the settlement, Powell Mayor Brian Lorenz had Ebersole removed from council chambers by a police officer for refusing to yield the floor after speaking for three minutes.
Lorenz repeatedly has said he enforced existing guidelines when Ebersole declined to end his comments.
Swartwout on Oct.17 made a lengthy statement questioning Newcomb's decision to support Ebersole and Valvona's claims.
Swartwout said he questions why Newcomb voted for the settlement if he shared the concerns voiced by Ebersole and Valvona.
"Even though he voted in favor of the settlement, council member Newcomb has refused to explain his vote on the record," Swartwout said. "Mr. Newcomb's silence has empowered his friends to peddle their misleading, inaccurate claims about the settlement."
Swartwout asked Newcomb to publicly explain his vote, but Newcomb declined to make a comment at the meeting.
Vice Mayor Jon Bennehoof said he agreed with Swartwout's comments.
Bennehoof said council's actions have been guided by discussions with the city's law director and outside legal counsel. He said the panel's ability to shape developments must be balanced against the rights of property owners.
"We cannot act outside the law because somebody doesn't like (a development) -- somebody wants to be the last person that moved into town," he said.