Developer sues Republic over failed real estate deal

A Springfield developer has alleged in a lawsuit that Republic City Council members violated his constitutional rights by voting down a resolution in support of low-income housing slated on properly zoned property he had contracted to sell.

Developer Mike Seitz - doing business as The Villages at Monte Cristo LLC - originally filed the suit against the city of Republic in Greene County Circuit Court in July, but the case was moved to U.S. District Court in late August. Seitz, who also owns Springfield-based residential and commercial development company Triple S Properties, has accused the city of Republic of violating his 14th Amendment right to equal protection under the law.

According to the suit, Seitz had a signed contract to sell 32 acres in Republic to Springfield-based Affordable Homes Development Inc. for $244,000. Affordable Homes planned to build 32 single-family homes with partial financing from low-income housing tax credits through the Missouri Housing Development Commission, according to the contract, which was executed in March 2008.

The MHDC application process requires developers seeking tax credits to obtain support from local elected officials, but the Republic City Council was unwilling to back the proposed development, court records show.

According to the suit, council members publicly acknowledged that the land in question met planning and zoning requirements, but still denied the resolution because of concerns that the housing would lower nearby property values and lead to more crime. Seitz's Springfield attorney, Cory Collins, said a DVD recording of the May 11 council meeting proves that council members intentionally torpedoed his client's real estate deal.

"He has been directly harmed by their actions, and they acknowledge in the meeting that he will be harmed and that they anticipate that, but that's not their concern," Collins, with Husch Blackwell Sanders LLP, said of Seitz.

According to the suit, Councilman Daniel Harter said he was concerned about the effect the proposed housing development would have on adjacent property he owned. Harter did not return a phone call seeking comment. Court records also show that Councilwoman Stephanie McCormack noted during the meeting that statistics show that low-income housing drives up crime rates.

As a result of the council's 6-1 vote against the resolution, Affordable Homes Development terminated its contract with Seitz's Villages at Monte Cristo, which also had been contracted to install infrastructure at the development, court records show.

In an e-mail, Republic City Administrator Jim Krischke said he could not comment on the litigation and referred questions to Springfield attorney Brian Malkmus, who is representing the city of Republic. Malkmus, with Malkmus Law Firm LLC, couched the case as a disgruntled developer seeking preferential treatment.

"They've not been denied equal protection of the law," he said. "What this boils down to is the plaintiff in this case is upset because the deal it cut ... isn't getting financed the way that Affordable Homes wants it to get financed. They're trying to save the deal by forcing the city to make a resolution so that financing can go through."

Affordable Homes Development co-owner Marie Carmichael, who emphasized that her company was not a party to the litigation, said elected officials don't always throw their support behind affordable housing proposals.

"We think Republic's a thriving, growing community, and we think it would be a good fit for them, but the council chose not to go with our proposal," she said. "And that's not unusual: A lot of city councils do turn down proposals. You make your presentation, and they get to decide if they're interested or not."

In a pending motion to dismiss the suit, Malkmus has argued that the city is immune from tort liability and suggested Seitz lacks legal standing to sue because the resolution was sought by Affordable Homes, not The Villages at Monte Cristo.

"The city of Republic is a municipal governmental entity, which entitles it to sovereign immunity," he said. "Sovereign immunity means you can't sue the state ... unless the state (says) you can sue the state."

Seitz, who has requested a jury trial, is seeking punitive damages and asking the court to require the city to pay the costs of the litigation plus interest. Collins said Seitz still owns the property in question and continues to seek prospective buyers.

Former Greene County Circuit Court judge J. Miles Sweeney has been hired by the parties to mediate the case, and their first scheduled meeting is Oct. 9 at the Malkmus Law Firm, court records show.