News
Waveland loses suit to condo developer
By DWAYNE BREMER
Aug 29, 2009, 01:46
On Thursday, U.S. District Judge Keith Starrett ruled the city of Waveland must pay a Minnesota developer nearly $800,000 in damages because the city improperly killed an 88-unit condo project after it had initially approved it. The case of Magnolia Condominiums vs. the city of Waveland was heard this week in federal court in Gulfport. Gulfport Attorney George Healey IV, who represented Magnolia in the case, said Thursday that his client, Developer Peter Stalland was "very, very pleased with the ruling."
"The judge ruled that the city bowed down to public pressure and denied Mr. Stalland his constitutional rights," Healey said. "The ruling should show then that they cannot do this. It is happening around the country."
The case was filed in December 2007 after Stalland's project was denied by the Waveland Board of Aldermen.
Stalland said during testimony Tuesday that he came to Waveland in the summer of 2007 because he had seen a tremendous opportunity and a need for housing in the area after Hurricane Katrina.
Stalland and his group Magnolia Gardens sought to construct an 88-unit condo complex to be built on a four-and-a-half acre lot which was located near the corner of St. Anthony and McLaurin streets.
The property was owned by local businessman Herman Johnson. Stalland said he purchased the property and began investigating Waveland's zoning ordinances before beginning the project.
Stalland testified that he was assured by city officials that he could built it and he even obtained a letter from former Public Works Director Ron Calcagno, which said the property was "properly zoned and meets all city requirements."
Stalland said he used the letter to obtain a loan from the Mississippi Home Corporation and he began clearing the property and bringing in dirt for the foundation.
After the initial work began, neighbors and competing developers began to complain that the project did not meet the density requirements set forth in the city's zoning ordinance.
Stalland said he believed he was in compliance because the ordinance did not have any specific requirements for condo.
Stalland agreed to appear before the planning and zoning commission where the project was denied in August 2007.
An appeal to the Board of Aldermen was denied in December 2007. After that denial, Stalland filed suit saying he had spent nearly $1 million on the project and now he could not build it.
Stalland also asked for $3 million in potential lost profits. Judge Starett agreed with Stalland's claims that the city unjustly stopped the project and awarded him $720,000 in actual damages and $70,000 in attorney fees.
The potential profits were not awarded.
"The judge ruled they applied the law and their ordinance improperly," Healey said. "But, he said the market is too speculative right now to award the potential profits," Healey said. The city the option to appeal the ruling, but if it does and loses then it would have to pay an additional 15 percent to Stalland, another local attorney said Thursday.
City officials have yet to say if they plan to appeal the decision on pay Stalland. Waveland City Attorney Zach Butterworth said Thursday that he was unable to comment on the decision.
"We don't have the final decision just yet and it would be inappropriate to comment until then," Butterworth said. "It is a very complicated decision."
Mayor Tommy Longo said Friday that the city actually was found not liable on three of the four counts in the suit and the judgement could have been a lot worse.
"Right now, we are just weighing our options," Longo said. "It is too soon to say if we want to appeal. We will discuss it with the attorney's and board and have an answer as soon as possible."
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