Lewisville reaches settlement agreement for nearly $2 million

Published 10:20 am Tuesday, January 17, 2023

Town council approves deal with Solomon Development involving denied apartment building project

The Town of Lewisville has reached a settlement agreement with Solomon Development, LLC for $1,975,000 regarding an apartment building project behind Shallowford Square that was previously turned down by the town council.
A voluntary mediated settlement conference was held Dec. 20 in town hall between the two parties, where a tentative settlement agreement was reached, and the council then unanimously approved it in a special called meeting on Dec. 29.
That led to unanimous council approval, which was also recommended by staff, in last Thursday night’s town council meeting of a resolution to move forward with the execution of the finalized agreement between the Town of Lewisville and Solomon Development, LLC.
A request first submitted by Solomon Development in 2020 for a four-story, multi-family building of 39 units with a restaurant on two adjoining parcels — one of .77 acres (145 Belnette Dr.) bordering Shallowford Square on the north side and the other one of .8 acres (200 North St.) behind it — was denied by both the planning board and town council.
However, a new plan was submitted in 2021 for a two-story, multi-family building of 39 units with a restaurant. This time, the planning board recommended approval in a 4-3 vote, but the town council again turned down the project for the second time in a 5-2 vote.
Mayor Mike Horn said that the reason of those on the council who denied the project was that the size and scale of a building that large in a residential neighborhood was inconsistent with the intent of the town’s comprehensive plan and the vision of what is planned for the properties adjoining Shallowford Square.
Here’s the complete public statement made by Horn in last Thursday night’s meeting:
“Many of you are aware of the apartment building on Shallowford Square that was proposed by Solomon Development in 2020.
“Following an extensive process by our planning board to review this project including public hearings in which many of you attended, the council did not approve the proposed project.
Last year, Solomon Development notified the town of its intention to sue the town for $8 million in compensatory and punitive damages as well as attorney fees for not approving the apartment project.
“Additionally, Solomon notified the council of its intention to sue the individual council members who voted not to approve the project as well as certain planning board members.
“The town and Solomon engaged in several months of negotiations in an effort to avoid going to court. Our goal was to settle Solomon Development’s claims against both the town and the individual council and planning board members.
“We were unable to reach an agreement with Solomon Development, so as a next step, the town requested a third-party mediation in an attempt to resolve the matter. Participating for the town in the mediation were Mayor Mike Horn and council members Ken Sadler and Melissa Hunt. Participating for Solomon Development was Jeff Zenger and Julie Zenger. All parties had retained legal counsel who also participated in the negotiations and the mediation.
“The mediation occurred in December of last year resulting in an agreement that the town will pay Solomon Development approximately $2 million, which includes acquiring the properties that were to be the site of the apartment building.
“After many hours of discussion among council members, and at the advice of our attorneys, the council reluctantly agreed to this settlement to avoid a jury trial in which a favorable verdict for the town was uncertain and that could also have resulted in compensatory and punitive damages significantly greater than the settlement that was reached.
“Neither the town or any town official has agreed that any mistakes were made in the decision to not approve the project. However, the council believes it is fiscally responsible to agree to this settlement in order to avoid the cost of several years of litigation and the potential for the town to incur greater liability from a jury decision. It will also be beneficial to own the property near Shallowford Square that is being acquired as part of the settlement.
“I am confident that I speak for those council members, who voted not to approve the proposed apartment building project at its proposed location on the Square, that we acted in what we believe was in the best interest of the town and our residents.
“While not requiring an increase in our resident’s property taxes to pay this settlement, doing so will have a significant impact on our general fund balance resulting in both short and long-term implications for our town and residents.”
Zenger is a former Lewisville Town Council member who claimed a seat on the N.C. House of Representatives (District 74) in 2020 and was re-elected in 2022.
When asked for comment, Zenger’s Legislative Assistant Penny Jordan responded, referring all questions, concerns and comments to attorney Scott Horn with Allman Spry Davis Leggett & Crumpler, P.A.
Scott Horn provided a statement on behalf of Solomon Development, LLC:
“Solomon Development does not agree with the prepared statement read by the mayor at (last) Thursday’s Lewisville Town Council meeting, including its characterization of the circumstances leading up to the mediated settlement and the reasons why the settlement was in the best interests of the town of Lewisville. The settlement resolves liability not just for the town, but also for certain members of the town council and the town planning board, so both town and individual interests are involved.
“Solomon did not expect the mayor to make a unilateral and potentially inflammatory public statement at the meeting, given that the attorneys for both sides are still in the process of documenting aspects of the settlement, including addressing when and how the settlement would be publicly announced, which is often an agreed component of settlements such as this.
“For now, Solomon does not think it is appropriate to make any further comment regarding the settlement, but will be prepared to offer a more detailed statement at an appropriate time, and, in connection with that, to respond to any questions regarding the unfortunate circumstances which precipitated the settlement.”
According to Forsyth County tax records, Solomon paid $50,000 for the .77-acre tract (145 Belnette Dr.) in 2004, and the total appraised land value is now $114,100. Solomon paid $15,000 for the .8-acre tract (200 North St.) in 2018, and the total appraised land value is now $22,200.