Crown Point Development has submitted a tort claim notice to the city of Sun Valley seeking damages of $5.6 million for the city's interference with its development the final phase of Crown Ranch subdivision.
Filed on Aug. 16, the claim is in addition to a suit Crown Point Development filed in 2003 seeking court reversal of the city's denial of its design-review and subdivision applications.
"I have bent over backwards for the city," Lane Monroe, the developer, said in an interview.
The fifth phase of the subdivision was planned along Crown Ranch Road in Elkhorn. The plan calls for 13 single-family residential units—ranging from 3,455 to 3,751 square feet—constructed on a 3.3-acre parcel.
Crown Point Development asserts its claim—on the basis of a 5th District Court ruling—that the city violated its right to due process by unlawfully preventing development of the property for over two years.
The claim for damages stems from years of legal battles revived last month by the city of Sun Valley. The city filed an appeal with the Idaho Supreme Court of a 5th District Court decision that overturned the City Council's denial of the proposed fifth phase of the subdivision.
In a 30-page decision issued in July, 5th District Judge Barry Wood ruled that the city's action was not supported by substantial evidence, was arbitrary and capricious and violated the developer's right of due process.
Because the court ruled that Crown Point Development met the city's evaluation standards and all necessary requirements, a building permit could have been issued. Instead, the city filed for a stay on development of the parcel until the Supreme Court decides the case.
The developer claims that the municipality caused an excess of $5.5 million in lost sales opportunities, plus $97,475 in attorney fees.
"This is a rising real estate market, so I don't have much concern on that number, and I think it was just plucked out of the air," Sun Valley City Attorney Rand Peebles said.
The city has 90 days to deny or accept the tort claim. If the city denies the claim or fails to respond to the claim, the developer can file a lawsuit. If the developer files the lawsuit, a jury will rule on its merits and determine the amount of damages, if any.
Peebles said the city has contacted its insurance company about the claim and is waiting for a response to decide whether to deny or ignore it.
The dispute arose in July 2003 when the City Council denied the project despite a recommendation for approval by the P&Z. The council made its decision following appeals of the P&Z's recommendation submitted by a Crown Ranch property owner and by the homeowners' association citing bulk, mass and setback issues.
In September 2003, Crown Point filed a petition for judicial review in District Court of the council's denial.
While the judicial review was pending, Crown Point submitted an application for an 11-unit subdivision on the same property in an attempt to settle with the city. The P&Z recommended approval of the application in September 2004, but later added a condition that an undeveloped parcel, originally designated by the developer for future development, be labeled as "undevelopable" and given to the homeowners' association. Crown Point Development withdrew the application as a result.
"The minute they changed the wording, they put me out of compliance," Monroe said. "There would be grounds for appeal (by a third party)."
Monroe said he had no intention of developing the half-acre parcel, but needed to label the piece for future development in order to prevent appeals based on the city's minimum density requirements that at least 13 units be built on the property.
"It seems to me it is going to come back to the citizens of Sun Valley, and that's not right," Monroe said.