The Lexington Urban County Council and several Lexington neighborhoods are opposing a state House bill that they say would make it more difficult for neighborhoods to fight proposed real estate developments in the courts.
House Bill 72 would give judges discretion to set a bond for parties who are appealing a zone change case from circuit court to the Kentucky Court of Appeals. That bond could be up to $100,000. For those appeals a judge deems to be without merit or frivolous, the bond could be as much as $250,000.
HB 72 passed the full House on Tuesday 63-32 and has been assigned to the Senate Judiciary Committee. A date for a hearing on the bill in the Senate Judiciary Committee has not been announced. But the Senate’s top leader has said he supports the bill.
Senate President Robert Stivers, R-Manchester, said Friday he looks “very favorably” on the bill.
“It's a good process,” he said. “If there is a true and legitimate question on appeal, then you don't worry about filing an appeal bond. Think about that. There is no penalty in there for individuals and they can truly appeal on a whim with no good reason.”
But the Urban County Council voted 12-3 Tuesday to oppose HB 72 on behalf of its neighborhoods that have voiced concerns about the bill.
Urban County Councilwoman Jennifer Mossotti said during Tuesday’s council work session most neighborhoods who oppose a zone change for a proposed development can’t even pay for an attorney to represent them before the Urban County Planning Commission or the Urban County Council. Requiring a bond on top of attorney fees would price neighborhoods out, she said.
“They can’t pay $10,000 for a bond,” Mossotti said. Most bonds require 10 percent cash. For a $100,000 bond, the amount would be $10,000.
The three council members who voted against the resolution were Fred Brown, Amanda Bledsoe and Jennifer Scutchfield.
Bledsoe and Scutchfield said they voted “no” because they did not know enough to vote for or against the bill. There may be reasons why the state legislature thought the bill was needed and until they heard from both sides, it was premature to vote on it, they said.
Rep. Robert Benvenuti III, R-Lexington, is one of the HB 72 sponsors. Benvenuti said there has been a lot of misinformation about what the bill does and who it benefits. It could also benefit neighborhoods.
“It applies to both sides,” Benvenuti said. “Both sides benefit from this if they are the prevailing party.”
For example, a neighborhood that has won at the planning commission, council and circuit court would also be protected from a developer with deep pockets who continues to file appeals, he said.
“I’ve had a lot of calls from neighborhood groups who are opposed to the bill, but once I explain to them what it actually does, many are no longer opposed.”
Benvenuti said judges are allowed to set bonds in other civil lawsuits. This bill gives judges the authority and discretion to set a bond in zoning cases as well. Judges may decide not to set any bond at all, he said.
“Or they may set a bond of $1,000, but at 10 percent that’s only $100,” Bevenuti said.
The Kentucky Resources Council, an environmental nonprofit, and the Fayette Alliance, a nonprofit that advocates on land use and other issues, have also opposed HB 72. Both groups say the bill is unconstitutional because it denies access to the courts.
“The bill likely violates Kentucky Constitution Section 115, which provides that ‘in all cases … there shall be allowed as a matter of right at least one appeal to another court.’ Requiring a bond effectively denies parties who cannot afford to post a bond this right,” wrote Susan Speckert, the executive director of the Fayette Alliance, in a letter to Stivers. Moreover, another section of the constitution says only the judicial branch of government can set rules on appellate procedure, both the Fayette Alliance and the Kentucky Resources Council say.
The Court of Appeals can already assess damages if the appeal is without merit, Speckert wrote in her letter.
Walt Gaffield, president of the Fayette County Neighborhood Council, an umbrella neighborhood group, said Tuesday that many neighborhood associations are voluntary. Dues are not mandatory.
“Many can’t even afford the $40 membership to the neighborhood council,” Gatfield said. “The bond would be cost prohibitive to all neighborhoods.”
Marianne Marye, president of the Greenbrier Neighborhood Association, said even Greenbrier, an upper class neighborhood, would not have the money to post an appeal bond. It, too, is a voluntary neighborhood association.
“Everything that we do is through voluntary contributions,” Marye said.
The Stonewall neighborhood off Higbee Mill Road has fought several developments in recent years including apartments and townhomes. If House Bill 72 is passed, it tips the scales in favor of developers who traditionally have more money, said Janet Cabannis, president of Stonewall Community Neighborhood Association.
The bill has an emergency clause. If it is passed by the Senate, it would take effect immediately after Gov. Matt Bevin signs it.
Few Fayette County zoning cases are appealed to the state Court of Appeals, Cabannis and others pointed out.
“Why do we even need this bill? And why is it such an emergency?” Cabannis said.
Benvenuti said he could not name a Fayette County development that was stalled because of lawsuits. The bill was driven by issues in Jefferson County surrounding the development of a Wal-Mart. The emergency clause is necessary to stop frivolous lawsuits, he said.
“Those states that have taken steps to stop frivolous lawsuits have seen their economies grow,” Benvenuti said.
But there is also concern about an amendment that was placed on the bill by a Fayette County lawyer and state representative.
Carrie Trapp, vice president of the Wellesley Heights neighborhood association, and other neighborhood groups have also raised questions about the amendment sponsored by Rep. Stan Lee, R-Lexington. Lee’s amendment exempts churches from posting the bond. Lee has represented Clays Mill Baptist Church on Clays Mill Road in several cases before the city’s Board of Adjustment. Most recently in October, Clays Mill had asked to build a church on Versailles Road behind the Commonwealth Baptist College, which is also owned by the church. That application was eventually withdrawn because city planning staff opposed it. Wellesley Heights is near Commonwealth Baptist College.
“I don’t think this bill needs to be implemented at all,” Trapp said. “They are trying to push this through as an emergency bill when there is no emergency.”
Lee said he did not add the amendment to benefit Clays Mill Baptist. It was meant to protect all churches, he said.
“I have represented a lot of churches,” Lee said. “And I know they don’t have the money to post a bond. What money they do have is spent on missionary work or feeding the hungry.”