News and Tribune

February 27, 2013

Developer sues Floyd County plan commission

Property owners claim Lafayette Ridge stifled by lack of extension; suit could be worth millions

By DANIEL SUDDEATH
daniel.suddeath@newsandtribune.com

NEW ALBANY — A legal complaint that could potentially be worth millions of dollars has been filed by two property owners against the Floyd County Plan Commission. 

The case is over the commission’s 8-1 denial in January of a 12-month extension of the primary plat for Lafayette Ridge subdivision, which was to be located off Scottsville and Fertig Creek roads. 

The primary landowner of the proposed subdivision, Robert Lynn, as well as secondary property owners Kevin and Julianna Stumler, are seeking damages for what their attorney has labeled as “an abuse of discretion” by the plan commission. 

Lafayette Ridge has been an issue for the county for several years. 

In 2006, the plan commission granted approval for the primary plat for the subdivision, but the ruling was challenged by a citizens’ group from Greenville just a few months later. 

Before a court ruling was issued, the commission voted to terminate the primary plat approval in 2007. Lynn filed and received a preliminary injunction to keep the approval, and in 2009 a Floyd Circuit Court ruling affirmed the plan commission’s initial OK of the primary plat. 

The Greenville group took its complaint to the Indiana Court of Appeals, which in October 2009 issued a memorandum again affirming the plan commission’s initial plat approval for the subdivision and dismissing the residents’ petition against the development. 

Citing poor economic conditions, Lynn wasn’t able to launch full construction, and so he requested and received two 12-month primary plat extensions in 2010 and 2011 from the plan commission. 

During that time, Lynn had to convey a portion of the 127-acre property to MainSource Bank in lieu of foreclosure. The bank then conveyed the land to three families, including the Stumlers. The other two families are not yet part of the court case against Floyd County. 

Lynn requested a third primary plat extension in October. The matter was tabled by the plan commission in December, and then voted down in January. 

Attorney Greg Fifer is representing Lynn and the Stumlers, and said Wednesday after filing the case in Floyd Circuit Court that the first matter to be resolved is whether the county effectively took the land by denying the extension. Fifer said the investments by the property owners into the land gave them the right to build and sell houses in the subdivision as long as they followed the primary plat rules. 

Lynn spent $3.2 million for acquisition and development of the property, according to the court case documents. The value of the lots had they been sold would have accounted for another $2 million to $3 million, Fifer continued. 

Those are the damages the property owners will be seeking to recoup if it is ruled the county took the land through the plan commission’s actions. Known as inverse condemnation, Fifer said the plan commission eliminated the property owners’ rights to develop the land and thus took possession of the subdivision. 

“Indiana law is fairly stringent and fairly complex about what constitutes a government taking of property,” Fifer said. “In this situation, I think we meet that test.” 

A message left for Keith Mull, an attorney representing the plan commission in the matter, Wednesday hadn’t been returned as of press time. 

Floyd County Commissioner Chuck Freiberger began serving on the plan commission in January. He made the motion to turn down the request for another primary plat extension for Lafayette Ridge. Freiberger said there had been no movement on the development for a few years. 

“Instead, in my opinion, it had regressed,” Freiberger said. “Land has changed ownership, the project has changed, the residents in the area didn’t know what was going on and what was happening with the property next to them, causing them to be concerned with their property values, and much more.” 

In addition to requesting an extension for the entire property in 2011, Lynn also asked for final plat approval for a five-acre tract in order to start construction. However, since there were permits that still needed to be obtained by the developer, the plan commission decided to wait on the final plat approval for the section. 

Fifer said the homes planned for Lafayette Ridge are in the $250,000 to $350,000 range, which he added is a market level that was struck harshly by the economic downturn. It’s becoming common for small sections of a proposed development in that marketing range to be built-out instead of the entire project being completed at once. A developer would have to shoulder a bond for public infrastructure improvements for a subdivision if it was built in one phase, and such debt is hard to finance without first having the homes sold, Fifer continued. 

He said the plan commission has been opposed to Lynn’s project since it attempted to terminate the plat approval for the development in 2007. 

“It is typical Floyd County. It is an anti-growth environment, an anti-development environment,” Fifer said. “I think it’s shameful to treat a citizen of the county that way that has made a substantial investment and played by the rules.” 

If a judge doesn’t rule that inverse condemnation occurred, Fifer said the property owners will seek for the court to overturn the plan commission’s decision. 

Freiberger said his motion didn’t keep the property from being developed. 

“Anyone can bring a project to the plan commission to be considered for development,” he said. “Once the developer gets his ducks in a row, he can come back to the plan commission and start from scratch.”