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More on the Ashby Highrise lawsuit

Here’s a longer version of the Chron story about the Ashby Highrise lawsuit. The key point:

Although the petition filed in a Harris County civil court-at-law does not specify damages, [developers Kevin] Kirton and [Matthew] Morgan said they are seeking more than $40 million, which they said is the value the city’s actions have taken from their project.

Chris Amandes, co-chairman of the Stop Ashby High-Rise task force, questioned this sum. The city allowed Buckhead to build a 23-story building with 210 apartments and 10,000 square feet of commercial space, he said, while they initially wanted to build 226 apartments and 25,000 square feet of commercial space.

“It is hard to see how that difference is worth more than $40 million,” Amandes said. “It appears that after realizing that their project cannot be financed in the marketplace, the Ashby developers are hoping that their profit might be found at the courthouse.”

Morgan and Kirton have said they had financing arranged for the development, and the only obstacle was the lack of a city permit.

I think Amandes makes a good point, and that very issue was raised in the comments of my earlier post by Tom Kirkendall and others. I’m no lawyer, and who knows how this will play out, but I’m going to venture out on a limb here and say there’s very little chance these guys are going to cash in for that much. Seems to me that if the suit gets decided in the plaintiffs’ favor, the equitable solution is to require the city to let them build it as they originally envisioned. That’s assuming they haven’t already started work by that time, and that such an outcome is within the court’s power to impose. It probably isn’t, but I feel like it should be. I mean, if they’ve got the financing as they claim, and the law is on their side, why not? We’ll see what happens. More from Stop Ashby Highrise, which has a copy of the suit, and a copy of the original Buckhead press release, sent to me by the Chron’s Mike Snyder, is beneath the fold. For the record, you’ll note they had “de facto” spelled correctly in it.

HOUSTON—February 11, 2010

Buckhead Investment Partners, Inc. today filed suit in a Harris County court seeking compensation from the City of Houston for the taking of its property at 1717 Bissonnet following an abnormally long and drawn out permitting process.

“The City must learn that it cannot misapply the law to please a select few or to achieve de facto zoning regulations that our community has consistently rejected,” pledged Kevin Kirton, CEO of Buckhead Investment Partners, Inc.

In July 2007, the City denied Buckhead a building permit because residents in the adjacent Medical Center/Rice University neighborhood complained about the height of the proposed 23-story mixed-use project. The City has subsequently admitted that it does not have the legal authority to regulate the height of a project.

Nonetheless, under constant pressure from the neighborhood, the City denied eleven applications during a two-year period , most recently relying on an obscure and seldom used ordinance that was written long ago to regulate driveway locations. The City chose to re-interpret the old driveway ordinance as a traffic ordinance and arbitrarily apply it to the Buckhead project, suggesting that the additional traffic it would generate was unacceptable.

Buckhead is challenging the City’s use of the driveway ordinance to regulate traffic. “Just like those who live in the City must abide by the law, so too must City government. When, as here, the City goes beyond the law, only the courts can correct the situation,” said Kirton.

In August 2009, the City finally granted a permit allowing all 23 stories originally sought, but not before Buckhead was forced to strip out a number of residential units and most of the non-residential uses, including specialty retail, day spa and executive office suite areas.

“The City’s misapplication of the driveway ordinance has taken more than $40 million in value from the developed project,” according to Kirton. “The City may have tried to appease us by approving much of what we sought, but the City can’t justify what it denies with what it approves and the Texas Constitution requires the City to compensate a property owner for what it takes,” he added.

“The future of development in Houston rests in this case. It is about whether we are governed by law or by those with influence and political access,” said Kirton.

Buckhead Investment Partners, Inc. is a real estate development firm focused on the development, ownership and operation of multifamily residential properties. Since it was chartered by the State of Texas on April 26, 1996, the firm has developed over 3,000 multifamily units in the state of Texas. In 2001, Buckhead delivered more units in the Houston area than any other multifamily developer.

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2 Comments

  1. Jeff says:

    “The future of development in Houston rests in this case. It is about whether we are governed by law or by those with influence and political access,” said Kirton.

    He’s kidding, right? Influence and political access, you mean like the kind DEVELOPERS ALREADY HAVE??? It’s hilarious that, in many ways, this is just a fight to bring us in line with most other major cities and this guy is making it out like we’ve just handed the death sentence to the developer who have ruled this city for decades.

    Cry me a freaking river.

  2. Carl Moore says:

    In light of the fact that many large apt. projects were approved within the Loop during the last 2 years such as the monster one on Mid Lane at San Felipe, one has to wonder about the influence a small group of wealthy homeowners has on City Hall in denying the permit to the Ashby Highrish developers. Houston is a city without zoning – all the stalling tactics in green lighting the project will only serve to delay the inevitable and further discourage future developers from creating exciting new inner-city projects which will bring a new vitality to Houston. The moneyed homeowners who are battling this project should face facts – that selfish self-interest has no place in a large and energetic city trying to advance into the Modern future!