Sept. 29, 2004 - Oro Valley, its town council and each of its individual council members are being sued for more than $1 million by a Michigan-based developer alleging the town denied the company its rights to develop its land.
Through six counts, the Oro Valley Shopping Center, LLC, referred to by the town and in the lawsuit as Beztak, is suing Oro Valley in Pima County Superior Court alleging the town and the council denied its rights to due process and equal protection under the law by rejecting a request to extend a landscaping deadline for its project.
A grading exception and development plan for an apartment-retail complex at the southeast corner of La Cañada Drive and Lambert Lane was approved by the council in March 2003, but carried a condition that the perimeter of the site be landscaped by June 1, 2004.
When that deadline was not met, the council refused an extension, shutting the project down.
In a letter sent to Beztak's legal counsel in July from Oro Valley, Beztak was informed its extension was denied and that, although the building permits for the Lambert Lane commercial buildings were ready for issuance, they would not be issued because "the Development Plan is no longer valid."
Beztak is seeking minimum compensation of $1.35 million for money invested into the property and for the time between now and June when the completion of the project has been delayed by the denial of the extension. It also is asking that the project be allowed to continue from where it was before the extension was denied.
The complaint alleges that conditions placed on the project, were a "sham" and "meaningless" and asks that the court remove these conditions.
The Tucson firm Snell and Wilmer is representing Beztak and attorney Andrew Jacobs said it "strived to make the complaint thorough."
In a prepared statement, a lawyer for the firm said the lawsuit filed against the town, "is about being treated fairly and in accordance with the law. Beztak has has always preferred to work with the town government over going to court."
The 22-page complaint presents a timeline of events from the beginning of the project in 1999 to the present, outlining specific instances in which the company thinks its rights were violated by the actions of the council.
Town Attorney Mark Langlitz said the suit has been turned over to the town's insurer and it has obtained the services of the firm Moyes Storey, attorneys specializing in land use claims. Attorney Brad Woodford is handling the case for Oro Valley.
"Hopefully it is a suit that can be resolved without extensive litigation," Woodford said. "It would be in everyone's best interests."
The town was given a notice of claim from Beztak in July seeking $1.2 million in damages and $50,000 a month retroactive to June 2 for the town's alleged violation of property rights.
In June, Beztak's request to extend a deadline for landscaping the perimeter of the 13-acre site was denied by the council, citing Beztak's failure to perform when similar deadline extensions were granted in the past.
Langlitz said anytime someone sues a municipality for money it is required by law to file the 60-day notice.
The town took no action and issued no response within the allotted 60 days to settle the claim, and Beztak filed suit in Pima County Superior Court Sept. 17.
Beztak had been trying to develop the property for nearly five years, receiving a grading exception from the town council in 1999 and subsequent appro-val in 2000 of a development plan calling for nearly 116,000 square feet of commercial development. The company turned to apartment development in the summer of 2002 when it was unable to attract a tenant for a 50,000 square foot anchor store.
According to the complaint, as development of the site moved forward, Beztak determined "that a purely commercial project was not a sound business option, as it was having difficulty locating tenants." Beztak decided apartment complexes would "permit the project to perform according to expectations," according to the complaint, and would comply with the existing El Conquistador Country Club planned area development.
Throughout the development of the project, some residents argued that the mix of apartments ranging from 787 to 1,281 square feet and commercial uses including shops totaling more than 27,000 square feet and a 6,000 square-foot restaurant, shouldn't be allowed as a part of the area because: apartments would be incompatible with surrounding residential uses, the project didn't properly separate residential from commercial areas, it posed risks because of increased traffic, it would overburden local schools and because the site is too small for what was being planned. Some residents also expressed the feeling that they had been lied to by Beztak, which had proposed strictly commercial development at first, and then changed midstream.
During an Aug. 6 meeting, Langlitz did advise the council that Beztak had the legal right to develop apartments on the property, as permitted by the PAD. A second opinion was obtained by Phoenix lawyers at the firm Gallagher & Kennedy, which stated the council could not deny the plan based on concerns such as "harmony."
During the discussion that led to the denial of the extension, councilmembers expressed concern that the company was in a state of nonperformance and that it had repeatedly asked for continuances without making progress on the project.
As reflected in the minutes of the June 2 meeting, Councilmember Barry Gillaspie "expressed concern that this project has been left in this condition for four or five years and that it has a detrimental impact to the public health, safety and welfare with construction vehicles dripping oil into the dirt, and, in addition, the dust conditions."
He felt that it was time to move forward to see if something better could get going here."
In the complaint, Beztak's attorneys write that the company could not meet the conditions placed on them by the council due to several "uncontrollable factors," specifically that the company could not get a landscaping permit without a grading permit, that it could not get a grading permit without building permits and that the building permit had not been approved. The company also stated that the loan had been delayed and placing utility wires under ground, another condition imposed by the town, had to be coordinated with Tucson Electric Power.
In making the motion to deny, Councilmember Conny Culver cited "failure to perform" as the primary reason.
The complaint alleges that during this process, some councilmembers "exhibited an improper private motivation" before voting to deny the landscaping extension.
The complaint specifically quotes both councilmembers Culver and Terry Parish, who spoke out publicly in opposition during hearings on the Beztak project.
"During the hearing, members of the public who would later be councilmembers raised supposed concern about the Revised Mixed Use Plan which were thinly veiled, or not at all veiled, classist references to apartment residents as bad people, criminals, vandals, and, curiously, somehow analogous to residents of South Tucson, making them thus unsuitable for residence in Oro Valley," the complaint alleges.
When the extension was brought before the new councilmembers in June, Culver moved to deny the motion and was seconded by Parish. The motion passed 5 to 2 with Mayor Paul Loomis and Councilmember Kenneth "KC" Carter opposed.
The claim alleges Parish and Culver's "minds were irrevocably closed to fair debate" on the issue and that biases of individuals making motions and casting votes violated Beztak's constitutional rights to property and due process.
Councilmember Terry Parish responded to the complaint in a telephone interview Sept. 22, saying he believes the council made the right decision in regards to the Beztak project.
"The council made a very fair and balanced decision," he said. "This is just them (Beztak) trying to bully us."
Parish said he has been involved with the project since its beginning, before he was a councilmember. He said he no longer lives near the property in question and so "Beztak does not affect me the way it did."
He also said since becoming a councilmember he has been "very aware that it is my job to act on the entirety of the town" in making decisions and he believes this decision benefitted Oro Valley.
He said Beztak "has not held up (its) end of the agreements" made with the town and to continue the project would "not have been right."
Culver, who lives in Autumn Hills, across Lambert from the Beztak property, chose not to comment on the complaint, saying she had been advised by the town attorney not to talk about pending litigation.
Woodford said in response to the inclusion of the councilmembers' comments in the complaint that "citizens have the absolute right to petition their local government on any matter with immunity."