Appeals court rules against Saratoga Springs in housing lawsuit

PHOTOGRAPHER: Stephen Williams

A federal appeals court has restored a 2010 trial verdict which found the city of Saratoga Springs discriminated against low income groups a decade ago when it changed its zoning to block a high-density East Side housing project that would have included some “workforce affordable” housing.

The 2nd Circuit Court of Appeals in New York City ruled unanimously last week that the trial judge had made an error in overturning the verdict against the city in a lawsuit brought by The Anderson Group of Albany. While a second trial in 2012 cleared the city, the three-member appeals court found that the first verdict should not have been overturned by Albany U.S. District Court Judge Gary L. Sharpe, meaning the second trial should not have been held.

However, the court also found that the $1 million damages awarded at the first trial included a “speculative” $900,000 “developer’s fee,” and ordered a new trial to decide only the actual damages, unless The Anderson Group is willing to settle for a $100,000 payment.

The ruling concerns a then-controversial effort to develop land in the city’s “greenbelt” east of Northway Exit 14 — and it comes as passions on both sides have again been stirred by plans for a destination golf resort hotel at Saratoga National Golf Course.

The case, which has a long history, raises issues about both the greenbelt and the city’s need for workforce housing. The city has a well-documented shortage of affordable housing, the appeals court noted.

Starting in 2002, The Anderson Group sought to develop a high-density housing project called Spring Run Village on land owned by Gail Anderson. As envisioned, it would have had 250 to 300 housing units on 44 acres, in the form of condominiums, townhouses and apartments. Of all the housing, 20 percent of the units were to be designated as “workforce affordable” for people of low to moderate income.

At roughly the same time, between 2001 and 2003, the city adopted a new comprehensive plan that first laid out the “city in the country” vision, and then changed the zoning of the Anderson property to “rural residential,” allowing no more than one structure per every two acres. In 2004, though, a state court overturned the zoning change, citing environmental review law violations. The Anderson Group then resumed pursuing its development plans, which would have been legal under the prior zoning.

In February 2005, with the Anderson project pending before the city’s Planning Board, the City Council corrected the environmental review errors and again adopted the “rural-residential” zoning. The Planning Board refused to consider the application further, prompting the lawsuit.

In federal court, The Anderson Group argued the city’s decision discriminated against low-income groups and perpetuated racial discrimination, in violation of the Fair Housing Act.

While the first trial jury found the city guilty of unintentional “desperate impact” discrimination, Sharpe later ruled that the finding was inconsistent with other parts of the verdict, vacated the verdict, and ordered a new trial. After the second trial cleared the city, an appeal by The Anderson Group led to the unanimous decision issued last Monday.

Gregg Johnson of Lemire Johnson in Malta, who represented the city at both trials, declined to comment on Friday, citing the freshness of the decision. Reed Colfax, the Washington, D.C., attorney who represented The Anderson Group, did not respond to a request for comment.

While further motions concerning the decision are possible, the only avenue of appeal is to the U.S. Supreme Court.