Facing a jury trial in federal court slated to start Monday, the city of Apalachicola last week agreed to settle with Denton Cove, the Altamonte Springs developer which has sought for nearly the past four years to build an affordable housing complex on the site of the former Apalachicola High School.

Following an executive session with William Warner, the Panama City attorney who represents the city’s insurer, and City Attorney Pat Floyd, city commissioners voted unanimously Aug. 4 to approve a settlement that stipulates Denton Cove had met the requirements of its land development code, “and consequently all approvals and permits based thereon will be timely issued."

In addition, the agreement stipulates that Denton Cove has the authority, based on a recent ruling by U.S. District Judge Robert Hinkle, to consider its development application before the city as encompassing all 3.66 acres of the site.

Whether the school board owned only 2.04 acres of the site, and the city the remaining 1.62 acres, had been a major issue in the federal fair housing trial.

In Dec. 2014, the school board signed a deal with Denton Cove to sell for about $226,000 the 2.04-acre portion of land, and at that same time, Apalachicola signed an initial purchase agreement for about $178,000 for what was believed to be its 1.62-acre share of the land, comprising what were streets and alleys prior to the construction of the high school several decades ago.

But neighbors rose up in opposition in spring 2015, and last summer, city commissioners declined to vacate the streets and alleys upon which the complex was to sit, setting the stage for the fair housing trial set for next week.

Last fall, in exchange for a $15,000 fee and an agreement to keep alive its sales agreement with Denton Cove through July 2018 by issuing two more $10,000 payments, the school board was granted dismissal with prejudice from the fair housing lawsuit.

Upon settling with the city, Denton Cove moved forward with a letter Monday exercising its right to extend the sales agreement. But whether the school board will ever agree to sell the entire 3.66 acres is highly debatable.

Last month the school board declined to take any steps towards accepting a June 27 offer for $310,000 made by the developers of the proposed 52-unit project slated to be built on the former high school grounds at 17th Street and Avenue L, largely funded by federal tax credits, and earmarked for low-income housing.

“This is a resolution that would do away with all of it from our standpoint,” said Floyd. “It’s going to be up to the school board. If they don’t grant the actual property to Denton Cove, that’s their business. We don’t own the property and they’re not in the lawsuit.

“The city has done what it was required to do, we didn’t have any discretion, the school board has discretion to sell or not sell. The city has been submitted a development application (that) it is required to grant and it has done so.”

The city contended in its filings that based on a 1946 map, it never had a right to vacate the streets and alleys, since they had reverted to the school district when Wallace and Augusta Quinn deeded to the schools lands where Apalachicola High School would eventually be built three decades later.

The legal arguments have been many and intricate, and at least one member of the local public last week said the city was settling too soon, given the fact that a final decision had yet been made by a jury as to who owns what.

“The ownership of the alleyways hasn’t been determined and the only way Denton Cove will settle this is to get (development approval),” said Jamie Liang, a retired lawyer who formerly practiced in Tallahassee. “That’s a travesty, because there’s going to be almost a quarter of the entire population of Apalachicola, all low income, living within four-tenths of a mile. It’s against state law, it’s against our city laws. I think the city should be fighting this rather than taking it on.”

Mayor Van Johnson said he took exception to Liang’s comments. “What makes you think we haven’t been fighting this?” he asked.

“Well, you’ve given up at the end. Yeah, you’ve given up,” she replied.

“You don’t know what’s at stake here,” said the mayor.

In his comments to Liang, Floyd said the “the risk involved $7.5 million plus attorney fees, and the developer spent about $700,000 in attorney fees. I appreciate what you’re talking about there but you’re not really involved with the whole thing.”

In a series of rulings last week, Hinkle had dismissed Denton Cove’s contention that the city’s handling of the matter had led to “disparate treatment” of minorities, a ruling that Liang agreed had been of vital importance to the city’s case.

“This is where you don’t have to show any intent (by the city), and that was the most dangerous claim there is,” she said.

The jury still could have ruled that the city had violated fair housing laws in handling the Denton Cove matter, but that would have been a more difficult point to prove.

“There was left a claim for intentional discrimination by the actions of the board and that’s still there,” said Floyd, in advance of the commissioners’ vote last week. “We don’t feel like race had anything to do with this and you can look up here at the board and tell that.”

Floyd limited his remarks to Liang, noting that “we’re still in litigation on this at this time. We’re cautious about answering questions that go to the actual nature of the conflict.”

According to the settlement agreement, the city also stipulates that it has no interest in the property, and that it will credit Denton Cove up to $125,000 for any water, sewer and other impact fee expenditures that the developer may have already completed.

In addition, the city’s insurer agreed to pay Denton Cove $50,000, inclusive of attorney fees, in order to facilitate dismissal of the lawsuit.

The meeting last week ended on an upbeat note when Apalachicola resident Marie Marshall commended Liang for speaking out. “As the mother of two lawyers I respect the citizen lawyer. We don’t want to litigate forever. We want the (money spent to have) soccer fields lit so kids can play out there,” she said.

“This puts us back to the actual school board whether or not to have the building built,” replied Floyd.

“So that’s where we should take our shoes,” said Marshall.