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  • Writer's pictureRosenzweig Law

Developer fought City Hall -- and won big

By Bill Torpy, The Atlanta Journal Constitution

March 9, 2022

Click here to read article on The AJC

It's been said all politics is local. This adage really hit home this week for Brookhaven Mayor John Ernst and City Manager Christian Sigman. I mean, really hit home - their family homes were in danger of being plucked away by a jury in a real estate zoning lawsuit.

Last week, a Dekalb County jury socked it to the city of Brookhaven for more than $6 million in damages and lawyers' fees for actions officials took in scuttling the redevelopment of a small neighborhood off Buford Highway.

On Monday, the jury returned to court to determine what level of punitive damages should be leveled against the two officials. The developer, Ardent, had accused the city of competing with it over properties the firm already had assembled to build 226 new townhomes. Ardent's lawyer, Simon Bloom, argued the city wanted land for a police station, then inflated the cost of a dead-end road to $3 million as sort of a municipal kickback.

Ultimately, the city voted not to turn the street over to the developers, killing the project.

"They hold all the cards; they have all the power," Bloom told the jurors. "If they don't do their jobs, it's really expensive to sue City Hall. It's so hard to hold them accountable."

It is rare that a city or county loses a zoning case or is hit for big-time damages, including paying $541,000 in the developer's legal fees. And it is unheard of for elected officials or government employees to be held personally liable in such cases. None of the real estate lawyers or politicos I spoke with had ever heard of such a thing. It is uncertain how much insurance will pay and how much the city will have to chip in. The decision will no doubt be appealed.

Bloom wasn't shy about the scope of his victory. He asked jurors to punish the two officials to the tune of a couple million dollars each.

While on the witness stand, Errest was asked by the city's lawyer, Ted Meeker, if he could pay a settlement.

"Not the full amount," he responded. "This (lawsuit) is against me personally. When you ask about my house and the mortgage there still is, well, that means to take my house and sell my house."

Both Ernst and Signman, who seemed shell-shocked they had come to this point, choked up on the stand as they spoke about their careers , their families health issues, home equity and life savings.

"Don't punish me, my wife or my sons," Sigman implored the jury.

Ernst, an attorney and former head of Dekalb's ethics board, noted that he had an 8-year-old Nissan Leaf and spent countless hours on his $16,000-a-year mayoral job to the detriment of his lawyering gig. He said the decision "will haunt me for the rest on my life."

Asked about his reason for getting involved in politics, the two-term mayor said, "Trying to make things better, plain and simple. In local government, that's where the differences can be made."

He talked about improving parks, building a walkway and trying to help with climate change by getting the Southeast's first electric police car.

Both Ernst and Sigman were evasive about their job responsibilities. Ernst: "I follow the advice of city staff." Sigman: "As city manager, I don't make decisions; that's the city's elected officials. I follow their lead."

Ernst is not corrupt or venal. He's a policy wonk and I think he was being honest when he said he's trying to make things better. But there is an undercurrent of insufferable high-handedness about those who run Brookhaven, an assured feeling that they know better.

The north-central Dekalb city was created a decade ago, with boundaries that swooped down to Buford Highway -- which really had nothing to do with the traditional neighborhood that was Brookhaven. Then the new city immediately went about gentrifying that thoroughfare and chasing away a strip club and squeezing out affordable housing.

The jury skipped lunch and didn't spend much time deliberating on how to punish the two, coming back to hit them each with a $200,000 price tag for punitive damages. It was a compromise verdict. Big enough to hurt, not big enough to ruin them.

A juror told me after the trial, "I hope this sends a message." But the fellow was hungry and didn't stick around to say what message that should be.

Part of the ruling, I think, is that government and pols are held in low regard these days. The jury just wanted to stick it to somebody.

"Politicians, especially in these affluent towns have a messiah complex," Bloom told me. "They think they're saving everybody."

Bill Floyd, who served as mayor of Decatur for 16 years, thinks a decision like this is going to put local officials in a shell when it comes to doing their jobs. He said government officials and developers have "tough conversations every day" about issues like building sidewalks, the number of residential units or types of businesses allowed, the effect on sewer systems, the placement of buildings near streets.

"This is really scary; it'll drastically change the way cities can do business if you're worried about punitive damages," Floyd said. "It will change the way cities and counties look at every development going on. There will be no negotiations."

Messiahs would be a dying breed.

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