News and Tribune

Floyd County

January 9, 2013

Appeal over multimillion dollar New Albany development delayed two weeks

Summit Springs’ team hoping original development approval will stand

NEW ALBANY — Whether the proposed Summit Springs development will require another New

Albany City Council vote will hinge, at least from a municipal standpoint, on a debate over

vested rights versus a city ordinance.

The New Albany Board of Zoning Appeals continued an appeal Tuesday on behalf of the

property owners of the land where Summit Springs — which is proposed as a commercial and

residential development — would be built.

The land owners — Pam and Pat Kelley — are appealing a decision by New Albany Plan

Commission Director Scott Wood requiring the project receive a second Planned Unit

Development District, or PUDD, approval by the city council.

The council originally approved a PUDD distinction for the land, which is located near the

Interstate 265 interchange off State Street, in May 2008.

The city ordinance states developers have 18 months to submit a secondary plan for review by

the plan commission after receiving initial approval or the PUDD expires.

However the Kelleys’ attorney John Kraft told the board of zoning appeals that due to official

letters sent out in 2010 by city administration indicating the project was still affirmed, the

property owners and the development team, LDG, spent more than $600,000 under the belief

Summit Springs didn’t need a second council approval for a PUDD.

Kraft distributed a letter dated March 29, 2010, to the board that was signed by then New

Albany Redevelopment Director Carl Malysz. It indicated Summit Springs was being included as

a tax-increment financing project and could be eligible for up to $2 million in infrastructure

support.

Additionally, the Kelleys were asked by the city to pay $104,100 for the purchase of property

owned by Burger King so that an extension of Daisy Lane could be constructed to serve the

development.

Kraft said then City Attorney Shane Gibson had authored a letter to Burger King requesting the

property, and had stated that eminent domain may be used to take the land for the public

benefit if a deal couldn’t be reached.

Kraft said LDG wasn’t notified until June 2012 by Wood — who he said had previously

indicated that only a secondary review by the plan commission was needed to proceed — that

the PUDD had expired and the council would have to again take up the matter.

“How do you include something in a TIF district if you don’t have a project?,” Kraft asked.

Kraft referenced an Indiana Supreme Court case where a developer was ruled to have spent a

substantial amount of money on a project under the belief they had zoning approval to proceed

with construction only to later learn the municipal ordinance had been changed and further

consent was needed. Kraft said the court ruling stated that due to the amount of money spent on the project, the developer was deemed to have a vested right to proceed without further approval.

The Summit Springs situation is similar because LDG and the Kelley’s had spent money on land,

engineering and on pursuing low-income tax credits for the residential portion of the

development, which would also likely include a restaurant and hotel space.

Wood said that when he was again approached by Realtor Mike Kopp on behalf of LDG about

moving forward with the project last year, he told him he would first have to consult with the

plan commission.

Kraft said the plan commission verbally indicated it was OK to move ahead with just a secondary

review, but that it was Councilman John Gonder who insisted the project go back through the

entire PUDD process.

Gonder is an adjoining property owner to the proposed development, though he did vote in

favor of the PUDD request in 2008.

Wood added that the city’s ordinance may be weak because it doesn’t take into account the

Indiana Supreme Court ruling, but that he made his judgment based on the New Albany law.

“Our ordinance does not address any vesting rights,” Wood said.

City Attorney Stan Robison agreed with both sides. He said that he feels the 18-month deadline

is applicable in the case, but that Kraft’s statements about the amount of money spent by the

property owners and LDG is also factual.

He said the administration doesn’t have a stance on the issue.

“My position is no position really,” Robison said.

Gonder spoke while public comment was allowed on the docket item. He said that the

developers and property owners failed to meet their obligation to provide a secondary review

plan to the plan commission within 18 months of the original PUDD approval.

“They missed it by about two years,” Gonder said.

LDG pulled the second PUDD request in November before it was set to be introduced to the

council. An official with the firm later said LDG didn’t feel confident in the council’s interest in

the project.

If the appeal is won by the Kelleys, the council won’t have another vote on the matter as the

original PUDD will stand. Kraft inferred that if the appeal is upheld, the developer and land

owners will likely take the issue to court.

Board of zoning appeals members elected to review the information submitted to them by Kraft

and decide on the appeal during a special meeting Jan. 22.

Eastridge variance postponed

A variance request by Jeff Eastridge’s Silver Street Property LLC was postponed due to “sign

posting irregularities.”

Eastridge is again seeking to open a recycling facility at 1706 Ind. 111 after being turned down

previously.

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