A home-builder is suing City Councilman Wayne New over an unbuilt development on Milwaukee Street between Third and Fourth avenues in Cherry Creek, according to court documents.
Noland Real Estate Investment Group claims that New and city staffers in the planning department conspired to kill the townhome project after initially signaling that zoning rules would allow the 14-unit structure to be built.
The project never should have gotten as far as it did because of new zoning rules, according to the city’s stance, which is laid out in the lawsuit.
The developer originally aimed to build a five-story, 43-home complex on the site, but that number of levels was not allowed according to zoning rules. Plus, Noland learned that neighbors would not support it. Noland lowered the stories to four — which was still too high — and met with New to see the likelihood of receiving a zoning exception from the city council, according to court documents.
New’s support for a rezoning “would be conditioned upon Noland obtaining support from neighbors in the immediate vicinity,” the plaintiff argues in the lawsuit. Noland met with the Cherry Creek North Neighborhood Association multiple times, according to the documents, continually whittling down the number of homes being planned. Neighbors were not fans.
“We worked with them for six months and it was exhausting because they would not come off it,” said Ingrid Glancy, a member of the neighborhood group. “I just think that we have to be careful about these things coming in, and frankly, if they’re allowed to have those row homes, they will look horrible.”
New would not comment for this article. The Denver City Attorney’s Office and the plaintiff’s attorney would not comment, either.
Eventually the company opted to develop a three-story, 14-unit complex under current rules, without seeking an exception to the rules.
In the backdrop is Denver’s ban on so-called slot homes, an inward-facing building form nixed in 2018 by the City Council. Before the ban, in 2016, Denver temporarily froze slot home development citywide while staffers studied a zoning fix. Noland bought the property around that time.
The lawsuit says the city planning department led Noland to believe the row houses were allowed under the new rules. At the last minute, New “interfered,” the lawsuit claims, effectively killing the project.
On Oct. 25, after the city had reviewed six separate development applications from Noland, a Department of Community Planning and Development project manager named Olga Mikhailova told Noland representative Andre Baros that “the project shows compliance with the Row House Building Form,” according to an email contained in the court filing.
The townhomes seemed inches from approval when, a few days later, New met with city staffers after being alerted by neighbors, the lawsuit claims. On Nov. 5, the planning department rejected the project. Because of the slot home rule, the project should have been thrown out much earlier, development and planning supervisor Chris Gleissner stated in a letter to Baros.
“Any review of your project using the standards of the Prior Code should have ended on May 10, 2018,” Gleissner wrote.
The lawsuit claims “egregious and unlawful conduct in interfering with and improperly denying” the project. Noland is asking the court to allow the townhomes and to award compensation for the money spent on architecture and engineering.
The city wants the court to dismiss the case.
The Denver City Attorney’s Office filed a motion to dismiss on Dec. 27 for a host of reasons — including a claim that the councilman cannot be culpable because “New has no authority regarding this subject.” In other words, he cannot unilaterally approve or deny development applications.
City attorneys admit in court documents that the planning department mistakenly moved the project forward, but claims the developer did not exhaust all of its options, because the company is allowed to appeal the decision. Noland could appeal or redesign the project, “neither of which Noland has attempted to do,” city defense attorneys argue.
This article was updated to correct the title of Ingrid Glancy.