Top Story — March: Condo residents sue city, Palm Avenue developer

For nearly a year, downtown residents and businesses have searched for ways to preserve Palm Avenue’s historic DeMarcay Hotel building, slated to be replaced with an 18-story residential and commercial development in the imminent future.

Now, residents at a nearby condominium are taking legal action in an attempt to block the construction of the planned high-rise building. On Thursday, the 1350 Main Residential Condominium Association — along with three individual residents of the Main Street building — filed suit against the city and XAC Developers LLC, who purchased the properties at 33 S. Palm Ave. and 30 Mira Mar Court in March 2014.

According to the city, the property comes with an approved site plan for the 18-story development that is valid through Oct. 15 of this year. The plans were approved under the now-defunct Downtown Residential Overlay District in 2007, and six years’ worth of extensions kept the plans valid through 2015.

The 1350 Main residents are seeking a declaration from the court that the approved site plan actually expired in January.

In the lawsuit, the 1350 Main residents argue that those plans expired earlier this year, and any attempt to move forward with a development at the DeMarcay Hotel site should be required to begin the approval process anew. That would drastically alter the residential aspect of the development: The property was approved for 39 units under the DROD, but is zoned for only 9 units today.

The argument hinges on the date on which the site plan approval was issued. The site plan was approved on Jan. 16, 2007 — and, per the city code, would be set to expire on that date in 2009 if the developer had not obtained a building permit for the project. After the extensions were taken into consideration, the 1350 Main residents say, the approval should have expired on Jan. 16, 2015.

However, the city believes that the effective date of the site plan approval is Oct. 15, 2007. That is because, in the initial site plan approval, the property owners proffered a condition that no construction would begin until April 15, 2008. According to City Attorney Robert Fournier, that condition was included to prevent construction from taking place until after the height of season, a response to issues with residents and merchants during the construction of the 1350 Main St. building.

"They thought the businesses on the street and the residents should have some time where the street was not under construction, and they agreed to hold off until after that period," Fournier said.

According to Harvey Hoglund, then a senior planner with the city, the earliest the developer could have obtained a building permit was 180 days before that start date. The city sought to give the developer the same two-year window to obtain a building permit as it would with any other project — thus the Oct. 15 effective approval.

The developers of the DeMarcay Hotel still intend to move forward with the project before the Oct. 15 expiration date for the site plan. Representatives for XAC Developers appeared before the city’s Development Review Committee in November, seeking guidance from staff before submitting for a building permit.

The 1350 Main residents are seeking a declaration from the circuit court that, per the city code, the approved site plan expired in January.

In an email sent to city administration and the City Commission this morning, Fournier said he would go into further detail about the city’s position at a future meeting.

"It's a little bit too early for me to be getting into it or to be assessing the viability of the case," Fournier said.