Louisville Metro will pay $6 million to settle a lawsuit from affordable housing developer LDG.
The developer sued in 2017 after Metro Council rejected its proposal to create a 198-unit, four-story affordable apartment complex for seniors in Prospect. The development, dubbed Prospect Cove, also received fierce opposition from the City of Prospect and its residents. LDG argued that Metro Council’s vote to kill the project violated the federal Fair Housing Act, which the city has denied.
A copy of the settlement provided to LPM News shows the city signed the agreement on Aug. 1. In addition to the $6 million payment, city officials also agreed to pass legislation that will make it easier for affordable housing developers to get through the approval process.
It was those non-monetary terms that drew criticism from one government accountability advocate in Louisville.
In a statement, Christi Lanier-Robinson, executive vice president of communications for LDG, said the settlement “validates our longstanding position that the Louisville Metro Council violated the Fair Housing Act.”
“While engaging in a legal battle that spanned almost a decade was not an endeavor we would have chosen, it was a path that we needed to pursue,” Lanier-Robinson said. “For far too long, the construction of affordable housing has been stalled by bureaucracy and actions that violate fair housing laws designed to protect families.”
The settlement means LDG is dropping its claims against Louisville Metro. The developer is still moving forward with its lawsuit against the City of Prospect. That is expected to go to trial.
Critic calls the settlement ‘rushed'
The lawsuit settlement outlines four changes to local law that the city agreed to pursue.
Metro Council agreed to pass two changes to the city’s Land Development Code, which governs what can be built and where. The first amendment changes how the city reviews affordable housing proposals that require a change in zoning.
Typically, if a developer wants to build an apartment complex on land zoned for single-family houses, they have to get approval from the Planning Commission and the full Metro Council.
The city agreed to change the process so that Metro Council does not have to vote on any proposal that gets unanimous support from the Planning Commission. Metro Council can still weigh in if two-thirds of its members agree to take it up or if an interested party requests it.
The second change extends the expiration date for some affordable housing projects to five years. Previously, developers would have to go through the approval process again if they haven’t shown signs of progress within two years, like pulling permits or getting shovels in the ground.
Metro Council approved both changes to the Land Development Code last month.
Including amendments to local law as part of a lawsuit settlement has sparked some controversy.
Tina Burnell, a former legislative aide to District 14 Republican Council Member Crystal Bast, spoke at multiple Planning Committee meetings where the legislation was being considered before being sent on to the full Planning Commission. She accused city officials of handing over their lawmaking powers to a private developer to pass legislation that benefits them.
“We should not be bargaining legislation as part of a lawsuit,” Burnell said during a July 15 Planning Committee meeting. “The Jefferson County Attorney’s Office told Metro Council this legislation has to go through or the deal falls through. It is inappropriate.”
Burnell also called the process “rushed” and “corrupt.” She said she learned the legislation was tied to the lawsuit during a closed-door meeting in May between council members and the Jefferson County Attorney’s Office, which she attended in her capacity as an aide.
Metro Council sued Burnell weeks after her comments at the Planning Committee meeting to stop her from talking about what was discussed in that closed session, accusing her of violating attorney-client privilege. A judge granted a temporary restraining order against Burnell in August, preventing her from talking about it further and releasing any recording or notes from the meeting.
Burnell has continued to speak her mind on Facebook, where she runs a group called the Louisville Metro Watchdog Alliance. She’s called out Metro Council members for what she sees as a lack of public transparency and honesty about the ties between the legislation and the lawsuit.
On Monday, she also spoke out about the settlement.
“For many residents, the settlement is less a resolution than a stark reminder of how power, policy, and profit intersect in Louisville’s housing struggles—with taxpayers once again left carrying the weight,” Burnell wrote.
The Metro Council member who sponsored the two pieces of legislation included in the agreement has a different view.
District 9 Council Member Andrew Owen, a Democrat and chair of the council’s Planning and Zoning Committee, said he was brought in on settlement talks early in the process. He dismissed the idea that he was forced to sponsor the changes as part of the lawsuit.
“Things that we were able to put forth as non-financial terms were things that I was going to bring forth anyway,” Owen said. “For me, I think we did a great job negotiating because they were things we were going to do anyway.”
Owen, who has worked in the affordable housing industry, said what Burnell saw and heard in the closed session was only “one-tenth” of the discussion that went into the settlement agreement.
Owen said he’s been working for months on trying to make it easier to build affordable housing in Louisville. And he said that’s exactly what the changes do.
“They’re not the be-all-end-all, but any tool that we can use to make it easier to develop affordable housing in this community, I want to take those steps,” he said. “These are some of those small steps.”
As part of the lawsuit settlement, the city also agreed to have Metro Council members and their staffs receive regular training on the Fair Housing Act.
Mayor Craig Greenberg’s administration is also required to propose waiving the rezoning application fees affordable housing developers have to pay.
The waiver would only apply to projects where half of the units are affordable to people earning 80% of the area median income, or about $77,000 per year for a family of four, or developments where 20% of the units are affordable to some of the city’s poorest residents.
In a statement, Greenberg’s spokesperson Matt Mudd said the city’s Department of Economic Development took that proposal to the Planning Commission last week.
“Considering over five times the settlement amount was intended to be sought, we're pleased to settle and continue working with partners like LDG on our ambitious affordable housing goals so more people throughout the city have a safe, quality, affordable place to call home,” he said.
Mudd added that the Greenberg administration does not believe city officials have ceded their lawmaking powers to a private developer by agreeing to change local law as part of the settlement.
“Our focus is on creating safe, quality, affordable places to call home for people throughout Louisville, so we’re always interested in exploring options that will help us do that,” he said.
Louisville Metro Council will likely take up the proposed fee waiver next month.
