Understanding the Lifestyles Communities vs Worthington Lawsuit

It is the mission of Building Worthington’s Future to encourage community dialogue and participation in issues that impact our quality of life while ensuring the city’s continued economic vitality into the future.

Members of Building Worthington’s Future executive committee have created the below “explainer“ to help residents understand more about the lawsuit that the City of Worthington is facing by Lifestyles Communities. We hope you find this information valuable as the City works through this and more residents engage in conversations about it.

It is important to note that we are not providing legal direction or advice. This is our understanding of the topics and considerations related to the Lifestyles Communities LTD lawsuit.

What happened?

Lifestyles Communities, Ltd. (“LC”) sued the City of Worthington (“City”) in the federal district court for the Southern District of Ohio.

What is the lawsuit about?

LC alleges that the City of Worthington has violated their ability to develop their property at 1033 High Street (the former United Methodist Children’s Home property).

Why are we getting sued?

The LC’s complaint alleges a number of federal and state constitutional law violations. They can broadly be classified into twotypes of violations: due process violations and violations of takings laws.

Wait, doesn’t the City “own” the zoning?

The City is allowed to set whatever zoning they desire. However, “in a constitutional analysis, courts must strive to balance the benefits to the public against the disadvantages to the private interests of the landowner.” C. Miller Chevrolet, Inc. v. Willoughby Hills (1974), 38 Ohio St.2d 298, 303 Put simply, no one party “owns” zoning, and it is a balancing test between property owners and the municipality implementing the zoning.

So what do the alleged violations mean?

Due Process Violations

Municipalities in the United States and Ohio are prohibited from taking discriminatory actions (treating one entity differently than other similarly situated entities) by 42 U.S.C § 1983 nationally and Article I of the Ohio Constitution in Ohio.

In order for LC to prevail on the due process allegations against the City, LC must show that the City treated LC’s application differently than other similar rezoning and development applications and did not follow established, standard procedures. In order for the City to prevail, the City must prove that normal practices and procedures were broadly followed.

Takings Violations

Eminent domain is the power of federal, state, and local governments to appropriate property for public use. A brief explainer from the Ohio Attorney General’s office is available here. When a government entity exercises this power to acquire property in part or in whole from a property owner, the government is executing a “taking.” When a government entity executes a taking, the Fifth Amendment of the United States Constitution and Article I, Section 19 of the Ohio Constitution require the government to pay “just compensation” to the property owner. Under both Constitutions, the definition of “just compensation” is fair market value. Also under both Constitutions, if a government entity takes action to make a developable property undevelopable to force a sale, this is a “regulatory taking” and the above applies. A government entity may not attempt to reduce the value of property it desires to deflate the fair market value of the property, and would be liable for the diminution in value of the property to the landowner.

In order for LC to prevail on this issue, it must show that the City took actions and/or enacted policies and procedures over a period of time tailored to reduce the value of LC’s property, and that as a result LC cannot put the property to any productive or economically beneficial use. In order for the City to prevail on this issue, they must show that LC had no reasonable expectation of being able to develop the property, and that the City did not take actions specifically designed to reduce the value of the LC’s property.

What could happen if LC wins all 10 counts?

An item-by-item analysis of LC’s Prayer for Relief (the section ofLC’s complaint that lays out what they are asking the court to order) per their Complaint, with section references:

• VI(A): a jury could award any amount to be paid by the City to LC, from $1 to millions of dollars;

• VI(B): the court would declare Resolution No. 04-2022 (the January 18th amendment to the Comprehensive Plan) unconstitutional, reinstating the previous 2014 Comprehensive Plan section;

• VI(C): the court would declare the S-1 zoning as unconstitutional and would require the City to rezone the property;

• VI(D): the court would declare the denial of LC’s application unlawful, likely in conjunction with remedies in VI(E) and (F);

• VI(E): the court would declare LC’s proposed use of the property as appropriate and approve the LC’s application;

• VI(F): the court would prohibit the City from taking any actions to stop LC’s development of their property in accordance with their application;

• VI(G): interest for any damages awarded to LC;

• VI(H): attorneys’ fees and court costs award to LC;

• VI(I): this is a catch-all clause ensuring the court can use its wide latitude to ensure LC is given appropriate and equitable awards, should they prevail.

What if the City wins?

Essentially, nothing. If the City wins, things continue as they are currently, with the January 18th amendment to the Comprehensive Plan in place and LC unable to submit a new application for the site until after April 2022.

Is there something that can be done to compromise or negotiate this out of court?

Yes. The City and LC are always free to negotiate an out-of-court settlement which would result in LC withdrawing their lawsuit. A previous case, Homewood Corp. v. Jerome Township Board of Trustees, No. 19-cv-04162, notably litigated by the same counsel LC is using in its suit with the City, was settled out of court between the Township Trustees and the developers at issue. Settlement may be offered by any party to the lawsuit to reduce litigation risk – in other words, to avoid going to trial and losing.

Building Worthngton’s Future recommends the City and Lifestyle have an open dialogue about the site and find a compromise that the residents of the City of Worthington can be proud of for years to come.