City settles developer's suit for $1.8M

The city of Powell has agreed to settle for $1.8 million a lawsuit brought three years ago by a developer who was denied permission to build homes and shops.

The city’s insurance carrier, Great American Insurance Group, will be responsible for $850,000 of the settlement payment to the developers of Powell Crossing LLC. The balance of $950,000 will come from Powell’s general fund.

City Council agreed at its Tuesday night meeting to increase its premiums for

liability insurance by about $35,000 annually because of rising costs for litigation.

The settlement arose from an unconstitutional charter amendment initiated by a citizens petition approved in late 2014, according to a Powell news release.

The developers had proposed 14,000 square feet of retail and office space along with 64 apartments along Olentangy Street near the Powell City Hall.

City Council approved the Center at Powell Crossing plan in 2014. But a group of residents, opposed to high-density housing there, challenged the decision with a city charter amendment initiative that was approved by 56 percent of voters. The city then withdrew the developer’s approval, sparking the lawsuit.

The U.S. District Court in Columbus affirmed that the amendment was an unlawful delegation of legislative power and invalidated the amendment. The court ruled that Powell Crossing was entitled to permanent injunctive relief, and that damages and attorney fees related to construction delays in the downtown business district would be decided later.

“Because it became an amendment to the city’s charter ... the city essentially owned that,” said Megan Canavan, city spokeswoman.

Several people on Tuesday lashed out at David Ebersole, one of the residents behind the petition. Some at the meeting called it frivolous and resulting in wasted taxpayer money.

Ebersole has argued that elected officials “take an oath to uphold the public trust,” and in this case should have sided with 56 percent of voters who didn’t want the development.

Instead, Ebersole said, “Council agreed with the developer in court that the voter initiative was unconstitutional. That’s the reason they are paying the settlement. It’s actually their fault.”

Councilman Tom Counts, chairman of the city’s finance committee, called the settlement “one of the saddest days of my 12 years on city council.”

He said the settlement will have a “huge financial impact” on the city, and the city’s share “represents a loss of approximately 17 percent of unencumbered general fund balance.”

The loss is the “equivalent of our annual budget to maintain roads” and extend miles of bike paths and “could have been used to lessen the very traffic issues that have been the source of contentiousness and litigation,” Counts said.

Canavan said the city is nearing the end of a 2012 bond levy for capital improvements and can’t afford to waste money. She said the city is considering cost-saving measures.

Ebersole, who is an attorney, is running for a council seat in November. He said he has “no doubt” that his stance against high-density housing is shared by the majority of Powell residents.