A decision by the City of Powell last month to settle a lawsuit with CV Real Property, developer of the Center at Powell Crossing, faced scrutiny during Tuesday’s city council meeting.

According to documents provided by the city, the $1.8 million settlement agreement — Powell will pay $950,000 and its insurer, Great American Insurance Group, will pay $850,000 — stems from a 2016 ruling by U.S. District Court Judge James L. Graham that stated a voter-approved charter amendment banning high-density housing in downtown Powell was unconstitutional.

The amendment specifically sought to prohibit construction of the Center at Powell Crossing, a proposed retail complex that includes 64 apartment units.

City resident David Ebersole, who was escorted out of council chambers while discussing the settlement during the public participation segment of council’s Sept. 19 meeting, spoke on Tuesday.

Ebersole said since council failed to provide any notice to the public that it would be taking action on the settlement agreement prior to doing so on Sept. 19, he’s submitted a document to the city asking it to “vacate the decision” and hold a public hearing to allow citizens the chance to weigh in on the matter.

In addition, he also questioned wording in a city press release on the matter that mentions the court had determined the developer is entitled to damages and fees. Ebersole called it “a false statement.”

Instead, he said, the “opposite is true” and the city “voluntarily agreed” to pay $950,000 of the $1.8 million settlement.

“You shouldn’t have done that,” Ebersole said. “You are misappropriating public funds.”

In response to Ebersole’s claim that the city-issued press release should be revised, Mayor Brian Lorenz said, he stands behind it.

“The city will not be amending any press release,” he said. “The facts of the matter in the case are within our press release. You certainly see it a different way, and that’s fine. We did everything that we needed to do in a bad situation for the benefit of our citizens, and we will stick with that.”

As for the agreed upon settlement, Ebersole questioned the amount and said residents deserve to know how the city came up with the $1.8 million figure. Until answers are provided, he said, the inquiry “isn’t going away.”

Ebersole’s brother and fellow city resident Brian Ebersole, also spoke Tuesday and called last month’s decision a “surprise settlement that was sprung on the community.”

Brian Ebersole agreed with his brother that the community deserves answers to a number of issues surrounding the lawsuit from how the dollar amount was reached to why the city’s insurer is only paying $850,000.

Council responds

Council member Tom Counts said while citizens have the right to put a referendum on the ballot as they did in response to the proposed Center at Powell Crossing development, “it needs to be done in a constitutional manner” to prevent unfavorable outcomes like the one the city just endured.

“The judge ultimately determined that the city was liable, and in terms of liability, it was liable for damages and attorneys’ fees,” Counts said.

Instead of allowing the judge to rule on a settlement, Counts added, the city decided to take things into its own hands and work out a deal with the developer.

“In my opinion, the city made a decision that it was in the best interest of both the city and the residents to make that decision consensually with the plaintiff,” he said. “That’s what resulted in the settlement agreement.”

Council member Jon Bennehoof said council agreed to the settlement after “extensive legal consultation,” and did its best given the situation.

“This appropriation ($950,000) was foretold long ago, and the people that carried the instrument for the petitions have lost every single court case, every single time,” Bennehoof said. “Yet, that group persists in threatening this city with litigation through their litigation against Harper’s Pointe, which puts us at risk, yet again, for exposure to another legal decision.”

In regard to David Ebersole’s remarks about the city failing to notify the public that a settlement agreement would be discussed during the Sept. 19 council meeting, council member Brendan Newcomb stated the decision was discussed during executive session, which is closed to the public.

Despite the fact, he added, several people were tipped off prior to the meeting about the pending decision on the settlement, which he called concerning.

“All appearances indicate confidential information was leaked, duties breached, and trust broken,” Newcomb said.