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Spokane, Washington  Est. May 19, 1883
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News >  Spokane

City settles suit over 1995 development vote

Ten years after the Spokane City Council voted to block permits for a large apartment proposal, the City Council on Monday settled a lawsuit that arose from its 1995 vote.

The city has agreed to grant the developer up to $250,000 worth of development permits free of charge for construction of the long-delayed project. The credits won’t take effect until next January.

The City Council in 1995 went against the advice of its attorney in blocking initial permits for the 790-unit Mission Springs project. Council members and residents living near the site were concerned about the impact of traffic on two narrow tunnels on Thorpe Road in southwest Spokane.

Feature Realty Inc., a Nevada corporation that was developing Mission Springs, and its president, Russell Lugli, filed a lawsuit and eventually won a ruling from the state Supreme Court that the city violated the developer’s rights.

After the Supreme Court ruling, the city sought a settlement with the developer by agreeing to extend utility lines to the project, but the case bogged down over the extent of the city’s agreement to install a water system.

It turned out the city had violated the state’s Open Meetings Act by approving the settlement in a closed-door executive session. The settlement was invalidated by the U.S. 9th Circuit Court of Appeals in 2003, and the case caused the council to stop a practice of agreeing to settlements outside of open public meetings.

The Mission Springs developer reopened the case in a 2003 lawsuit. The project is now known as Canyon Bluffs.

Lexington Insurance Co. had provided coverage to the city for excess liability in 1994 and 1995, but the city was subject to a $500,000 deductible. The settlement says the city had satisfied the deductible amount and that Lexington had paid nearly $1.2 million in legal defense costs through the course of the legal battle.

In other business, the council approved $5,800 to hire a company to provide the city with the names of registered owners of out-of-state vehicles that were issued parking violations, but had not paid. City officials estimate that the city is owed nearly $100,000 in unpaid fines against out-of-state vehicles.

Also, the council approved draft watershed plans for Hangman Creek, the Little Spokane River and a middle portion of the Spokane River in conjunction with other agencies with interests in the watersheds. The plans seek to improve water quality, protect the streams and set minimum summer flows.

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