University Heights residents lose appeal in BK&M case

Residents of the University Heights neighborhood have lost their appeal in a case against developer BK&M LLC regarding property at the northwest corner of Sunshine Street and National Avenue.

A three-judge panel for the Southern District Court of Appeals filed their decision last night to affirm the June 14, 2024, ruling by Judge Derek Ankrom in the case Dixie Sleight et al. v. BK&M LLC et al. Ankrom’s decision was that restrictive covenants limiting the University Heights neighborhood to private homes are mostly unenforceable.

On Friday, with many offices closed to observe this weekend’s Independence Day holiday, SBJ reached out unsuccessfully to attorneys Bryan Wade of Husch Blackwell LLP, representing the University Heights appellants, and Charles Cowherd of Spencer Fane LLP, representing BK&M. SBJ also reached out to Ralph Duda, principal with BK&M, but did not hear back before deadline.

SBJ additionally reached out to Josh Manning, CEO of development company Valiant Group. Manning confirmed in January that he was considering a purchase of the property, which has been a flash point in the city since BK&M announced its intentions for the corner in an August 2022 public meeting.

Neighborhood residents have maintained that University Heights is an intact, all-residential district and that they do not desire other types of development. The case decided by the appeals court was based on the idea that deed restrictions on properties in the neighborhood do not allow nonresidential use, in addition to other requirements, according to past SBJ reporting.

Manning has expressed an interest in purchasing the property but only after a ruling by the appellate court is in place.

Manning said he talked to the BK&M ownership after the appeal was filed. He said he told them that the next step for him would be to lay out a design and run a feasibility study.

“We’re going to move forward with putting together what we think the project would look like and represent that to the neighborhood association,” Manning said in a phone interview this morning.

In a neighborhood meeting in January, Manning outlined an idea for townhomes on the contested corner that would incorporate design features from the houses in the neighborhood.

“The idea is to make it an extension of the neighborhood – to make the design feel like it’s part of University Heights,” he said. “I told the neighborhood association at that meeting that we want to try to give people the opportunity to live in the neighborhood if they can’t afford to buy a million-dollar house, and we want them to be glad it’s part of the neighborhood.”

Manning said he knows not everyone will get behind the design.

“I’m trying to provide something that’s better than what it could be, and I’m going to include the neighborhood in it – I’m not going to hide anything from them,” he said. “I want them to know what it’s going to look like, what it’s going to feel like. That’s the idea – to keep them in the loop on what we’re doing.”

Manning cautioned, however, that the concept must make sense financially, and his company’s feasibility study for the corner has to work out.

He said that his company is vertically integrated, with in-house architectural and construction teams, and that lowers its cost of development.

“Our team has the skill set to get it across the table,” he said. “I’m pretty optimistic we can turn that corner into something nice.”

Asked why he would be willing to take on the development of the corner that has been the locus of heated disagreement, Manning said Springfield is his home, and the corner is in an important location within the city. At present, the property is vacant, following BK&M’s demolition of the houses that once stood there, and white gravel is spread unevenly across the ground. Each day, thousands of cars pass through on what is the city’s second-busiest intersection, according to past SBJ reporting.

“Somebody in our community needs to do something with that intersection,” Manning said.

The ruling
The higher court panel backed up the decision by the trial court after a two-day bench trial. Judge Ankrom’s decision found that deed-specific restrictions had been waived by the plaintiffs, who were in widespread noncompliance with aspects of the restrictions, and thus they were unenforceable against BK&M, according to a summary in the new ruling.

“Specifically, the trial court found that none of the appellants were in compliance with a covenant that restricted building on the lots to a single private residence, or with a covenant that restricted building material to brick, stone or stucco,” the new ruling notes. “The trial court also found that all landowners in University Heights had acquiesced in the violations by their inaction in the face of widespread violations of the deed-specific restrictions.”

For these reasons, the appellate court stated, the trial court determined that the restrictions could not be enforced against BK&M on lots that it owned.

The appellants offered five points of appeal in their petition to the higher court. The ruling states that the court finds no merit to the first two points, declined to address the third and fourth points and found the fifth point moot.

On the first point of appeal, the appellants stated that the trial court erred in finding the deed construction covenants to be unenforceable because that court erroneously deemed the waiver of one covenant sufficient to constitute a waiver of each other distinct covenant.

The appeals court found that the appellants’ argument failed to challenge the trial court’s finding with respect to the original intent of Eloise Mackey, who drafted the neighborhood’s original plat and the deed covenants.

“This failure is fatal to their claim,” the decision states.

The second point of appeal was that the trial court improperly found that subdivision of lots constituted a waiver of the covenants.

“Having already found that the trial court properly determined that the construction covenants are nonseverable, it necessarily follows that widespread violation of one construction covenant constitutes a waiver of them all,” the appellate court ruling states.

It adds that the trial court properly found that subdivision of many of the lots in the neighborhood since its establishment in 1926 constituted a violation of the single private residence covenant.

The court did not review the third and fourth points: that the trial court ruled against the weight of evidence regarding its finding of a widespread waiver of a single-family residence covenant and that enforcing the covenants would bring no benefit to appellants but would cause hardship to BK&M.

The appellate court found that the case failed to set forth or apply the steps required for against-the-weight-of-evidence challenges for these two points.

The fifth point argued by appellants concerned a ruling by Ankrom that five plaintiffs lack standing because their properties are owned by revocable trusts. This point was deemed moot and therefore not addressed by the appellate court.

SBJ reached out to several of the appellants for comment but did not immediately make contact. Barbara Susan Robinson did answer when called, but she said she had not yet seen the decision and therefore could not yet comment.