MORRISVILLE — The town will pay a $700,000 settlement to developer Experience One Homes, which filed a lawsuit that claimed Morrisville treated the company unfairly.
In a lawsuit filed in 2010, Experience One said town staff asked the company to go above and beyond what was required by development codes.
The town delayed issuing permits, which ultimately cost the company a contract to fully build the planned 700-home Kitts Creek subdivision, according to the lawsuit filed in Wake County Superior Court.
Under the terms of the settlement, Morrisville denies any liability, and Experience One will receive $700,000 by Oct. 7. The Morrisville Town Council approved the payout Sept. 10.
The town’s insurance policy will cover half of the settlement, and the remainder will come from the town’s coffers.
Council members referred questions about the settlement to Frank Gray, the town attorney.
“The events in the complaint happened five to 10 years ago when the town was experiencing a development boom, and the town didn’t have all of its ordinances and development polices in place,” Gray said in an email. “In hindsight, this caused delay and expense to this developer. (The) town did not admit liability but agreed to settle to avoid litigation.”
Experience One, which is based in Apex, contracted with KCR Investors to built 700 single-family homes on 200 acres on the west side of Church Street. It was set to be one of the town’s largest residential developments.
The plan was for Experience One to develop Kitts Creek in phases and then purchase the finished lots from KCR.
Experience One expected to finance the different phases through the sale of completed homes, so the company was on a strict schedule, according to the lawsuit.
Experience One built about 200 homes
Delays in the town’s review process cost the company too much time and money, and it was unable to complete the KCR contract, according to the lawsuit.
The lawsuit claimed that the town’s engineering staff often rejected plans based on personal preference rather than engineering principles or existing town codes.
According to the lawsuit, the town asked Experience One to change stormwater flow for an alley that had already been built and installed according to town-approved plans; install a culvert over a temporary fire access road; and change storm-drain requirements in the middle of the first phase.
A Wake County Superior Court judge ordered the case for remediation a few years ago.
“Morrisville now has in place a full complement of land-use plans and development ordinances which will soon be combined into one Unified Development Ordinance, so this situation should not recur,” Gray said.
“We are pleased that the parties were able to reach a mutually agreeable settlement to resolve the matter,” said Kathryn Taylor, attorney for K&L Associates, which has a branch in Morrisville and represented Experience One in the case.