Homeowners file lawsuit over apartment complex

A group of nine Vestavia Hills residents has filed a joint lawsuit against the city of Vestavia Hills, NSH Corp. and entities known as Daniel Corporation for damages the group claims are the result of the Patchwork Farms development.

The complaint, which was filed March 24 in the Jefferson County Circuit Court, alleges that the development at Patchwork Farms, specifically the Vestavia Reserve apartment complex, violated the original development agreements and has caused significant harm to property values and quality of life for residents on Old Looney Mill Road. 

Legal representatives provided a copy of the complaint to the Vestavia Voice by email.

Differences contested

The nine plaintiffs are the property owners of five lots directly adjacent to Lot 3B of Patchwork Farms.

Attorney for the plaintiffs Jay Smith said that owners were promised one type of development behind their homes and received another.

The details of the original agreement between homeowners and then-owner NSH Corp. are still in discovery, Smith said, but the claim states that at least one couple, Christi and Jeff Maze, were told in December 2013 when they first contracted with NSH that the development behind the property was slated for “small retail with lofts on top,” pursuant to the design agreed upon by citizens at the Dec. 2013 Patchwork Farms community charrette.

Smith said the idea, homeowners were told, was to have a development similar to that of Cahaba Village in Mountain Brook, with retail shops on the first floor and one to two floors of residential units above.

Instead, the case says, the development turned into a 270-unit apartment complex.

On Aug. 25, 2014, the Vestavia Hills City Council voted to approve a sale agreement that indicated Lot 3B would be used for the 270 multifamily units. Vestavia Reserve, the luxury apartment complex that was eventually built, is four stories high, with units ranging from one to three bedrooms.

Smith said the Mazes and other owners of the five lots on Old Looney Mill were not notified of the changes to the intended development before closing on their properties in late August and September, even though the date on the agreement says July 30, 2014.

“If they had known that the changes to the development behind their house would have been as significant as they were, and that those changes would have been other than what they had promised, they would not have bought the property,” Smith said.

Lack of buffer key issue

In addition to the changes in the size, scope and style of the development, Smith said, the residents are also suing because of the loss of the landscaping buffer between the development and the homes.

The agreement, Smith said, was for the development to include a buffer pursuant to the Patchwork Farms master plan, which was based on the 2013 community charrette.

The original buffer was supposed to be 35 feet, though that was amended to be a 20-foot sewer buffer with a berm on top, as well as a 17.5-foot landscape buffer.

According to the master plan, landscape buffers in Patchwork Farms should “preserve existing trees as a general rule” and that “landscape design should enhance the overall project, buffer negative views, screen and/or provide a transition to adjacent properties.”

Smith said not only were the requirements for the buffer not met, but also the buffer that was there naturally — which he said included trees and shrubs — was removed during the development.

According to the complaint, the property owners have had “an ongoing nuisance in their backyards” and a loss in property value due to the development.

“As you can imagine, somebody who looks at a house with a huge apartment complex in its backyard with no significant buffer or separation from that apartment complex, may not be nearly as likely to buy that property as they otherwise would, maybe not at all,” Smith said.

Alleged conflict of interest

In addition to the differences between the designed development and what occurred, the complaint alleges that the city executed an “option” agreement with Daniel Corporation when it approved the firm as master developer April 28, 2014. An option contract, additional plaintiff counsel Gregory Brockwell explained, is an agreement where one party grants a potential buyer the exclusive right to purchase property at a certain price for a certain period of time.

Brockwell said for a city to do so would be against bidding law, as the property did not go out for open bidding and was an “insider sale.” Brockwell said this came up during the development process, but City Attorney Pat Boone said the contract was not an option contract.

Brockwell said the city does not have the legal right to execute an option contract, and that the court would have to decide if the sale of Lot 3B was legal in the first place.

Finding a Resolution

Smith said the property owners have basically asked the court to either require direct financial compensation for lost property values or require the defendants to buy out the owners of the properties.

City Manager Jeff Downes said the city denies the allegations and will “vigorously defend the case” but said he could not give additional comments.

John Knutsson, vice president for development at Daniel Corporation, said: “We have permits for all of the work that we have performed, and have performed that work in accordance with all applicable ordinances and regulations.”

Defendants have 30 days to respond once being served, which should be completed by mid to late May. Once defendants have formally responded, the case will move into the discovery phase, which could take several months. The plaintiffs have requested a jury trial for the case, but Brockwell said that cases this complex often take more than a year to come to trial.

Vestavia Voice will continue to follow the case as it progresses. Please visit vestaviavoice.com for new developments.