By Miki Mullor

In a June 9 ruling, District Court Judge Jennifer Mabey handed the Town of Hideout another legal loss in the court case regarding the denial of building permits in Golden Eagle on the basis of infrastructure reasons.

• The court ruling leaves the Town no more reasons to wholesale deny building permits in Golden Eagle
• It is estimated the Town spent around $250,000 on this failed legal fight, and missed hundreds of thousands more in building permit fees.
• The Town seems poised to continue its war on Golden Eagle, now denying Certificate of Occupancies, on largely the same infrastructure reasons.
• Higher property taxes are expected, as the Town now runs a $250,000 annual deficit.

The Court prohibited Town’s reasons to deny permits

In a June 9 ruling, the Court agreed with Mustang Development LLC, the developer of Golden Eagle, that the Town’s interpretation of its own code to require a submission of storm drain plans as part of a building permit application – is incorrect.

“[Mustang] has been constructing roads and drainage systems for a lengthy period of time. The Town’s position that it now takes is inconsistent with the approval of the subdivision and the work on drainage issues that has taken place with the Town’s knowledge over the course of multiple years at this point.” – wrote the judge in the order, “Accordingly, the Court orders that the Town may not use those enumerated [infrastructure] bases to deny the issuance of building permits.” – giving Mustang a total win in this case and paving the way to resume building permitting in Golden Eagle.

However, the FY24 budget signals the Town intends to continue its war on Golden Eagle, now by denying Certificate of Occupancies, leaving an open question whether leery landowners would risk spending millions of dollars on construction but unable to move in, such as the case of John Blamer, as we reported.

Blamer, who has also sued the Town, has not yet been granted a Certificate of Occupancy, months after his home has been completed. The Town denied his application on largely the same infrastructure reasons it has been denying building permits, but also added a new reason, that according to its interpretation of the code, the sewer system has insufficient number of manholes.

Ballooning legal expenses drives a deficit, higher taxes are coming

The Town’s proposed budget for FY24 reveals the direct costs of the Golden Eagle war in FY22 and FY23 to be around $250,000 in legal fees and the indirect costs in missed building permit fees to be around $500,000. The Hideout Comment’s public records request for the legal invoices has been rejected because the Town deems those “confidential”. We estimate the legal expense by comparing the budget line items for legal expenses to FY21, before the Golden Eagle war started, and assuming the difference is attributed to that war.

In FY23, the Town’s total expenses were about $1,100,000. In FY24’s budget, the Town expect to spend $259,000 on legal fees of its total $1,600,000 expenditure.

The Town is expecting a budget deficit of around $500,000 for FY23 and FY24 combined, which has been covered by dipping into the capital funds reserves – now about 50% depleted. In the last council meeting, Mayor Phil Rubin indicated higher property taxes are likely coming this year,

Cloud of uncertainty over Golden Eagle remains

In its budget, the Town seems to assume private landowners in Golden Eagle will now apply to building permits, therefore seeing an increase in revenues from building permit fees going from $258,000 to $430,000. But the legal uncertainty around Golden Eagle may prove an obstacle to the rosy forecast.

The legal standard for issuing of Certificate of Occupancy is different from the legal standard for issuing building permits. The Judge made it clear that her order only applies to issuance of building permits, leaving an uncertainty as to the issuance of Certificate of Occupancy, such as Blamer is now facing.

Some private land owners in Golden Eagle expressed reluctance to move forward with their projects as long as City Attorney Polly McLean remains the Town’s attorney. McLean is viewed as the sole authority in the Town over the Golden Eagle war.

An email evidence presented in court shows it was McLean who ordered the Town’s engineer to stop issuing building permits in 2022 – because of the unrelated lawsuit Mustang brought against the Town and Mayor Rubin personally.

Previously, before the court rulings against the Town, the Mayor stated during a council meeting that he took an oath to uphold the law which the Town determined Mustang misinterpreted. With the Court now completely backing Mustang’s position on interoperation of the law, it opens a question of whether the Town can in good faith continue to rely McLean’s legal opinion of the law to deny Certificate of Occupancies.

References:

• Ruling of the District Court, June 9, on storm drain plan requirement
• Town of Hideout FY24 budget proposal