Judge rules for Denton Cove
- January 9, 2020
- / David Adlerstein
- / Media Coverage,Litigation & Trial Practice
By: David Adlerstein
An affordable housing project dating back seven years, one that prompted Apalachicola neighborhood activists to rise in opposition, and led to a protracted legal fight in both federal and state courtrooms, got a crucial, and perhaps final, go-ahead three days into the new year.
In an eight-page ruling issued Friday, Circuit Judge Charles Dodson exercised his right to reform the contract the school board first agreed to in Dec. 2014 with Denton Cove, Ltd, a wholly owned subsidiary of Wendover Housing Partners out of Altamonte Springs.
The judge mandated changes in the wording of the contract that would enable Denton Cove to buy the entire 3.66 acre-parcel, on the grounds of the former Apalachicola High School complex.
The company plans to construct 52 low-income housing units, complete with amenities such as a fitness center and computer room, on the land at 17th Street and Avenue L. The project is to be funded through the sale of roughly $9.4 million in federal low-income housing tax credits ($940,000 annually for 10 years) that the Florida Housing Finance Corporation first allocated Denton Cove in 2015, and has extended ever since.
Dodson set a purchase price of $425,000 for the property, with a closing date on or before Feb. 15, 2020, and gave Denton Cove the right to deposit $25,000, to be applied to the purchase price, if it wishes to extend the closing an additional 60 days.
The school board is expected to consider the judge’s decision at its upcoming meeting this Monday evening, with their outside counsel, Leonard Dietzen, from Rumberger, Kirk and Caldwell out of Tallahassee, set to outline their options.
Appealing the case to the First District Court of Appeals remains an option, but with nearly $240,000 already spent by the school district on litigation costs, it seems unlikely, but not out of the question, the school board would appeal.
Denton Cove did not seek compensation for attorney fees, and none were awarded, but its attorney, Richard Dellinger, from the Orlando firm of Lowndes Drosdick, signaled they might alter that stance if litigation persists.
“Each (legal fees) will be borne by the parties, there’s no fee shifting,” he said, in a telephone interview Monday, together with the Rebecca Rhoden, who handled the case from its origination. “Ultimately it’s not in the community’s best interest for them to pay both their fee and our fees.”
The attorney said he interpreted Dodson’s decision to suggest the school board “came very close to breaching the contract” and said Denton Cove might seek legal fees in the event of protracted litigation.
“If they were to do something crazy like appeal, that could change,” Dellinger said.
‘Then what good is a contract?’
Following a two-day bench trial in early November, Dodson, who graduated from the Florida State University College of Law in 1976 after attending the U.S. Military Academy in West Point, New York, weighed the arguments of the school board, Denton Cove and that of a core group of neighbors, opposed to the project, who formed the non-profit group HAPPI (Historic Apalachicola Plat Preservation, Inc.) and entered the case as intervenors.
In doing so, the judge had to sort out the manner in which Denton Cove and the school board handled ownership of the 3.66 acres when attorneys sat down in 2014 to draft a purchase agreement for the land, the site proposed to them by Apalachicola broker Leon Bloodworth.
“In accordance with guidelines set by the Florida Housing Finance Corporation, this affordable housing community would have to be built in an area near a grocery store, a school, a medical facility, and other services necessary for a multi-family community,” wrote Dodson. “Based on these criteria, Denton Cove’s broker, a well-respected longtime Franklin County resident, found this 3.66-acre lot near the former high school.
“The property is currently used for nothing more than tractor-trailer parking and dog park activities. Again, it is essentially a 3.66-acre vacant lot,” he wrote.
Dodson wrote that School Board Attorney Barbara Sanders had told Bloodworth “there would be no issue with the school board concerning the property, but that the city of Apalachicola was claiming an interest in the unconstructed roadways on the vacant lot of the former high school.”
Despite the fact a title search and survey indicated the school board owned fee simple title to the entire 3.66 acres, “that did not resolve the issue of the city’s claimed interest in the unconstructed roadways,” Dodson wrote.
“In any event, the school board and the city were unwilling to settle the issue of which entity owned which parts of the property, agreeing instead to maintain the status quo between the parties,” he wrote. “Thus there was essentially a potential title cloud on the property.”
The parties agreed to set up two contracts, one with the schools for 2.04 acres of “lots and blocks,” for about $223,000, and another with the city for 1.62 acres of “streets and alleys,” for about $$177,000. After an uproar from neighbors, city commissioners decided not to vacate these unconstructed roadways, a key condition of the contract, and then later, as part of a federal fair housing suit, the city disclaimed any interest in these roadways, and conceded that title belonged to the school board.
“Thus the school board owned the 3.66 acres at all times relevant to this case,” wrote Dodson. “That, though, does not affect this ruling. The school board fully intended to convey all its interest in this 3.66 acres to Denton Cove for this affordable housing community.”
The judge found the argument made by HAPPI’s attorney, Kent Safriet, from the Tallahassee firm of Hopping, Green and Sams, that the school board could not convey the unconstructed roadways because they were owned by the city “was excellently presented but is simply not relevant to this court’s finding.
“Neither the school board nor Denton Cove has argued the city had fee simple title to any portion of the property,” Dodson wrote.
The judge wrote that while HAPPI’s position regarding the preservation of the city’s original plat, and in support of the school board’s position, is of “of great importance, (the court) views even more important the sanctity of contract, the intent of the parties – especially when dealing with a governmental entity such as the school board.
“If private businesses cannot rely on their contracts with governmental entities, then it may become way too risky to contract with those governmental entities,” Dodson wrote. “If a new school board can take a different view of a contract than a previous school board, then what good is a contract?”
Dodson rejected the school board’s argument that its contract intentionally excluded the unconstructed roadways.
“There is no part of the school board contract that shows an intent to exclude any portion of the property,” he wrote, noting the contract language “shows the right to receive title to the vacated roadways (and) fails to include any ‘less and except’ language that might evidence an intent to retain a portion of the property.
“Denton Cove intended to purchase all interest in this 3.66 acres for the planned community. It was required to have the entire 3.66 acres to build it,” Dodson wrote. “To conclude the parties intended otherwise simply makes no sense. And the law should make sense.”
Rhoden said she found it significant the judge had not allowed a later school board decision to overturn one made by an earlier board. Only George Thompson sat on the board in 2014; both Pam Marshall and Stacy Kirvin were elected in the fall of that year, Carl Whaley in 2016 and Fonda Davis in 2018.
“It shows government entities in contract negotiations have to abide by it, even if they’re not there anymore,” she said. “They’re bound by it, even if the community’s opposing it.”
Construction could start by late spring
At Tuesday evening’s city commission meeting, Mayor Kevin Begos said Jonathan Wolf, president of Wendover Housing Partners, called him Monday, and told him that in the event the school board does not appeal, the developers plan to begin construction in May or June, and expect it to last about 10 to 12 months.
“They want to start it right away,” said the mayor.
Begos said he was told by former City Planner Cindy Clark and City Manager Ron Nalley that additional permitting is needed before the project is fully approved.
Both Dellinger and Rhoden stressed that while the decision was in Denton Cove’s favor, they view it as a win for the entire community.
“We’re trying to provide housing that is needed by the community and it’s a judgment in their favor,” said Dellinger. “There’s a severe need for affordable housing, and this is something that benefits the community. What the court did is what the parties intended all along.”
He said he believes the Apalachicola community will grow to appreciate this enhancement to the property.
“I think they will embrace this housing, which is very needed,” Dellinger said. “Once it’s there, all of this will be forgotten. It’s going to really upgrade that area.”