The City of Powell has agreed to a settlement of a lawsuit filed by the owner of a mixed-use development project in the city’s downtown district.

Mayor Brian Lorenz announced at Tuesday’s council meeting that the amount of the settlement with CV Real Property, developer of the Center at Powell Crossing, is $1.8 million. According to documents provided by the city, Powell will pay $950,000 of the claim, while the city’s insurer, Great American Insurance Group, will pay $850,000.

With the settlement of the lawsuit, Powell’s general fund absorbs a major blow. Lorenz said the city will pay its share of the claim out of the unappropriated fund balance of the general fund. During Tuesday’s meeting, council passed an ordinance approving an expenditure adjustment to appropriate the $950,000.

Additionally, Powell’s premium with Great American Insurance has increased by $34,000 as a result of the claim. Council passed a separate ordinance to appropriate funds to cover that expense.

“This court case and this decision has put us back so far,” Lorenz said. “There are so many great things that we could do, but they all go on the back burner. And they’ve been on the back burner as we’ve suffered through this litigation.”

Councilman Tom Counts, chairman of the city’s finance committee, outlined some of the consequences Powell will face due to the settlement.

“This settlement payment represents a loss of approximately 17 percent of our unencumbered general fund balance that we have worked so very hard to build,” Counts said. “… It equals more than our annual budget to maintain our residential roads. It could’ve added miles of bike paths. It could’ve helped complete the funding of our Seldom Seen Park. And it could’ve helped to lessen the very traffic issues that have been the source of contentiousness and litigation.”

The lawsuit stemmed from a March 25, 2016 ruling by U.S. District Court Judge James L. Graham which stated that a charter amendment, approved by voters in November 2014, banning “high-density housing” in Powell’s downtown district was unconstitutional. A provision in the charter amendment, which 56 percent of Powell voters supported, specifically denied construction of a 64-unit apartment and retail complex proposed by Powell Crossing LLC developer CV Real Property.

Graham’s ruling invalidated the amendment in its entirety, noting that it was an unlawful delegation of legislative power. Additionally, Graham ruled that Powell Crossing LLC was entitled to permanent injunctive relief, damages, and attorney fees.

A group of Powell citizens who initiated the charter amendment filed a motion to intervene with a federal court in April 2016 to seek an appeal of the district court’s ruling. That motion was denied as was a subsequent appeal of the denial.

Powell resident David Ebersole, a supporter of the charter amendment, accused city council of conspiring with Powell Crossing LLC to influence the judge’s ruling that struck down the amendment.

“The reason that the court found that the law was unconstitutional is because the city council decided, behind closed doors in executive session, that they agreed with the developer that they wanted to overturn the public will,” Ebersole alleged. “Let me tell you something, banning high-density housing in downtown Powell is not unconstitutional. Zoning laws are not controversial. It is because you agreed with the court that that law is unconstitutional, you have yourselves to blame for that settlement that you just discussed.”

Ebersole, one of eight candidates running for four seats on Powell City Council in November, was later escorted from the building by a city police officer after he refused to be seated when Lorenz informed him that his allotted three minutes to speak during public participation had expired. Some residents in attendance shouted at Ebersole to sit down after the mayor told him that the time limit had been reached.

Other residents who spoke expressed anger at the group that initiated that supported the charter amendment.