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ICI Homes Gets Its Way, Mostly, in Cypress Knoll Development as Palm Coast Settles Suit

| March 7, 2012

The trees to the left demarcate the line of ICI's future development in Cypress Knoll. (© FlaglerLive)

ICI Homes finally won its case against Palm Coast and the residents of Cypress Knoll, who’d opposed ICI’s plan to build several dozen homes on land the city had previously zoned for very low-density development.

The Palm Coast City Council voted unanimously Tuesday evening to settle ICI’s lawsuit against the city. In exchange, ICI gets to build 58 homes on 37 acres in the area of Cypress Knoll just west of Easthampton Boulevard and south of Eric Drive. A chunk of land the city had previously zoned as “greenbelt” will revert to relatively high-density development, with 18 acres set aside for open space in what City Manager Jim Landon called “the best agreement possible.”

When Palm Coast had rezoned the property in 2004, the rezoning would have maximized development in the area to 28 houses. That prompted ICI’s suit. The city backed down, at least to the negotiating table. It reached a series of settlements that triggered great opposition from residents. Repeatedly, the city argued that short of an agreement, ICI would take the city to court and could, theoretically, win a ruling that could yield it up to 200 town houses or 300 single family homes. The city claimed it had no choice but to settle because, as Palm Coast Mayor Jon Netts put it, “I think everybody, council especially, needs to understand that the alternative to settlement is to proceed to court, and then those nice folks in those black robes get to decide our future for us.”

Wayne Gunthorpe, who lives on Ellison Lane,  did not buy it. “The ICI building plan was flawed from its conception because Cypress Knoll were never represented in the process. It is increasingly apparent that the city government is cooperating with ICI in promoting a plan that is detrimental to the economic interests of the Cypress Knoll community,” he said, addressing the council before the vote.

Gunthorpe derided ICI’s claim that it was being denied its rights. “They are merely reducing the size of their anticipated profit,” he continued. “This is a cleverly designed maneuver to achieve a desired end. A good example of this strategy is when a teenager really wants $50 from a parent but asks for $100 instead. When the parent refuses, the teenager hems and haws for a while, and then asks for $80. This gradual reduction process continues until he gets what he wants, or if he is lucky, even more than what he intended. This is exactly what ICI is doing. It is a good business strategy, and also an effective way of subtly applying pressure to the community. Cypress Knoll residents should understand that the ICI so-called compromises are a form of manipulation.”

But the fight had gone out of the Cypress Knoll community, which at previous meetings and hearings had jammed the podium in force to press its point against a settlement. This time, it was as if residents knew the gig was up. “It is the city that has failed our community, not ICI,” Gunthorpe said. Gunrthorpe’s wife aside (she finished his remarks when her husband’s three minute-allowance at the podium was up), only two other people spoke on the issue, neither of them immediately affected by the plan, though neither of them supportive of the city’s settlement with ICI.

“It’s interesting the power that some folks ascribe to local government,” Netts said in response. “The underlying issue here is private property rights. When you buy a piece of property, when you bought your lots in Cypress Knoll, when I bought my lot in the F section, with that lot goes a bundle of rights. You’re entitled to do certain things.” When the zoning was changed, ICI’s property rights were taken away, he said. “The essence of the lawsuit is: you made that change, you, city, made that change, you reduced my property rights, and that is considered a taking. You’re taking something away from me, and Florida has very, very strong and strict laws about what the consequences are if government takes private property.”

Netts is right up to a point: nothing stops a local government from doing just what Palm Coast did—and defending its action in court, where nothing says, either, that a developer would win a case based on the maximum speculative values it could derive from a property. But cities are loath to battle it out in court. It’s expensive and risky, and there’s a self-fulfilling prophesy type of momentum against local governments that try to battle it out in court because when most cave to developers, those that don’t have less leverage or precedent to rely on. And ICI, owned by the deep-pocketed Mori Hosseini (who owns numerous parcels in Palm Coast, Flagler and Volusia counties) is a very powerful and politically connected local developer.

According to the new plan, the 58 homes will average 1.6 homes per acre. Also, 36 lots would have sizes of 75 by 110 feet, and 22 lots would have sizes of 80 by 100 feet—either way, visibly smaller lots than the current norm of 80 by 125 feet in the neighborhood. Side set-backs, a bone of contention with residents in previous proposals, were changed from 5 feet to 7.5 feet, which is similar to the neighborhood’s setbacks (front set-backs of 20 feet and back set-backs of 10 feet would be unchanged).

The city council votes again on March 20 to finalize the deal. The council isn’t expected to change course.

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21 Responses for “ICI Homes Gets Its Way, Mostly, in Cypress Knoll Development as Palm Coast Settles Suit”

  1. ANONYMOUSAY says:

    Are there signed contracts on all these homes? Or they going to add to the layer after layer of Spec homes, Rental’s, Flips, Foreclosures, Abandoned and so-on that sit empty? Palm Coast ended up on CNN due to the fact that the City Clowns in charge continued to let building go on well into the down-turn because they wanted to get their greedy hands on 21,0000 plus impact fees per home. This is hilarious.

  2. Layla says:

    Get used to it, people. The developers have ALL the power. You have nothing, Maybe we can find a high powered law firm that will handle a class action lawsuit against the city and the developer charging them with damaging our property values, because every time one of these tracts goes up in this housing market and stands empty, the value of every other home in Palm Coast goes down.

    Money does all the talking.

  3. says:

    this smells of the public being sold out

  4. Kip Durocher says:

    “The Palm Coast City Council voted unanimously…”

    These all for one and one for all votes make my crapo-meter buzz
    like hell.
    Did one nice dinner party “meeting” get everyone on the same page?
    Amateur politicians hoodwinked by smooth professional bamboozolers?
    Citizens of PC get ready for more of this ty

  5. palmcoaster says:

    The City Council this week tentatively approved the rezoning of 29 acres owned by ICI on the west side of Easthampton Boulevard and south of Eric Drive. “Before the city was incorporated in 1999, the county had zoned the land at three units per acre, which allowed ICI to build about 86 units on the property”. But the city subsequently rezoned it to greenbelt, limiting development to one unit per acre. The affected residents need to request the county records to see when before the city incorporated in 1999, the county commission with David Haas as county manager changed the comprehensive plan development for that reserve to 3 units per acre. Were the current residents affected then, were properly notified to appear and challenge the change? Ask Commissioner George Hanns, he knows as he received campaign donations from Mori Housseini after Haas went to work for him in 2006. It would not surprise me that this density changed by manager Haas and the county on the residents backs and was prepared right before we Palm Coast incorporated benefiting these developers for the take. And now Haas represents Mori Housseini? This should be a case for the FBI…as so many reserved parcels may have been changed density and fraudulently, under the same conditions in Palm Coast. Good way for the county, getting us back for fighting to incorporate! Ask Darby, Seay, Hanns,O’Connell, King, and other past commissioners. They sure know what they did!

  6. BW says:

    I’ve been watching this story for a while and quite honestly I’m not getting what the issue is? ICI is planning to build in a manner that is consistent with the surrounding community and improve it further. This is not the same situation that has occurred in Matanzas Woods where a condo complex and townhomes mixed in with single family homes has been proposed.

    In terms of developers, builders, and impact fees . . . why would any of these be considered a “bad thing”. This idea that the local government is “greedy” for collecting tax and impact revenue is absurd. That’s how communities work. That’s how you have the nice town to live in. That’s how Palm Coast got to be Palm Coast and it’s a good community.

    The positive piece here is that ICI is showing commitment to further investing in Palm Coast where many builders left or dissolved. New builds and development builds have been something many builders were not considering over the last few years. This further demonstrates the real turn around in the real estate market locally.

  7. Ralph Belcher says:

    Is this like the KB Homes development that is off of the corner of Rolling Sands Dr and Roxboro Drive? The new development went right into a reserve, up against already built homes on the property’s perimiter. To acquaint myself I drove over there to Rolling Fern, Roxboro and Rolling Sands. It seemed to be a decent development of nicely designed homes. I don’t have a dog in this hunt, but I’m not sure if those folks on Rolling Fern could of had a legal standing on letting those folks build those homes on land that I presume KB homes paid for… where it’s zoned in accordance with what they plan to do.

    I think Cypress Knoll neighbors have a right to lament about this. However, if it’s zoned for xyz… then get used to the idea that xyz is eventually going to happen. To prevent this; purchase the land, otherwise you may not have a legal say in what John Doe does with his property when done according to law.

  8. Egret trail So SAD says:

    Everyone all cried, WE DONT WANT A PARK, If we took the plans to build even a dog park. we would not be in this problem. ICI would have changed the plans for a smaller buildout. Now we have no park and smaller lot sizes. Hope you that complained are happy.

  9. Johnny Taxpayer says:

    here’s an idea, why don’t the upset residents of Cypress Knoll band together and buy the land from ICI, then you can do whatever the hell you want with it. But until then, how about you stop trying dictate to other private land owners what they can and can’t build on their own land? Do property rights mean nothing, anymore?

  10. ANONYMOUSAY says:

    @BW What your not getting is that this isn’t nice community anymore! The city is supposed to start issuing refunds on some of those past overpriced impact fees, which is yet to be seen. We won’t see a penny of those fee’s put back into the City. Don’t know where you came from or how long you have lived here. I’ve watched these people do the opposite of building a community. It’s called we need infrastructure, which they still have not gotten a grasp on. But your probably retired so it makes no difference to you. I’ve been here 23 years and watched them chase out everyone but home builders. Go do the research all the so-called big box restaurants and stores had to fight tooth and nail so the people in charge could squeeze extras out of them that WE don’t even benefit from. So now all we are left with is literal empty houses that people jump back and fourth from because renters are desperate, and you think thats okay? It’s called sell the inventory you have first. There are custom homes in this City that have never been lived in and built 7 years ago at that.This isn’t “Field Of Dreams” build it they will come. Those days are over. The big cooperate entities that can bring jobs instead of houses won’t come because they know what the City is about. The City itself has admitted they have a bad rep for strings attached and not being welcoming.

  11. georged1_us says:

    We should have approved the park when we had the chance. More housing underscores the need for a second exit from Cypress Knoll. We are fast approaching the fire season and we live in a fire trap.

  12. some guy says:

    glad to see for a change Government standing UP for privet property rights.

  13. Justaperson says:

    Do you people really think ICI is going to break ground today and begin putting up homes with NO buyers? Really? Think about what’s driving them… Profit. ICI was looking to get the density needed and there plans approved. It’ll be years before they actually start building any homes because the market is currently saturated with vacant homes. They’re doing what any smart business man would do. They’re planning for the future. Mark my words, none of those homes will be built until they have buyers.

    Also, I agree with others that said if you’re so upset about it, purchase the land and do what you want with it. It absolutely amazes me how many of you try to keep others from doing exactly what you’ve done. You came to palm coast and you bought a house. Most of you probably had it built for you when you purchased it yet every time I turn around you are the same ones who are crying when someone else is trying to do the same. It’s ridiculous. Since when is it YOUR job to dictate what others can do with their own property. As long as their doing it within the proper guidelines of City codes and ordinances you should BUTT OUT!

  14. says:

    just a thought , would these homes eventually require the city to have more schools?

  15. ANONYMOUSAY says:

    @Justaperson It’s called the housing market housing has gone bust. WE HAVE TOO MUCH INVENTORY ALREADY! Why is that so hard to grasp? Your not talking about a house here and there. Your talking about a development. Like this place really needs it.

    • Justaperson says:

      EXACTLY! Which means a builder isn’t going to add more inventory where it isn’t needed. They’re preparing themselves for when it IS needed which is YEARS down the line. Those homes will not be built any time soon. Why is that so hard to grasp? It’s not rocket science. It’s BUSINESS.

  16. David says:

    I don’t like the mindset of some of the residences of Cypress Knoll. It’s like they are saying I live here, so nobody else is allowed to move in. It is completely opposite of what this community is striving to be. ICI as a property owner has all the rights to develop and build homes on their property. Of course they must abide to building codes, archutectual codes, and environment laws. So let ICI develop and allow the city to collect the impact fees.

  17. BW says:


    I am in fact not retired or even close to it. I have lived here for 8 years now and truly enjoy it. It is a very nice community and I have seen a great deal of positive improvements since moving here. Matanzas Woods now connects with Old Kings., Belle Terre is very enjoyable to walk down or take a bike ride, numerous bike paths on connecting roads, Town Center building up, beautiful new schools, and much more.

    I understand that many people do not care for change, but the truth in life is that the only constant is change. Cypress Knoll is a truly beautiful subdivision. The proposed development by ICI is not going to impact the community as what the speculation is. A house built on a 6,000 sqft lot is not going to drive the values of the houses built on 10,000 sqft lots down. You are comparing apples to oranges. As for vacancies, negative sells newspapers but it’s often not reality. Palm Coast is a great place to live and real estate is doing far better than you know.

  18. ANONYMOUSAY says:


    Your right. I’ll give you that, because I also enjoy those same improvements and things could be a lot worse. Positive progress is a plus.

  19. ANONYMOUSAY says:


    If it were that simple Palm Coast would not be in the empty house business now. Because a Builder has the capital to build doesn’t make him smart. These builders had to compete against their own inventory because of allowing house flippers to sign contracts with pre approval and minimal down. Of course they would like to keep doing business but Palm Coast is already over-saturated with houses. When I hear or read the words “It’s Business” I think of all the crooked corporations banks etc that use that line including the Mafia. Doesn’t make it good business and doesn’t make it right. It’s really not even about the builder it’s the City they have ability like they have done in the past to regulate residential building. Back in 94 when I was looking for a home here impact fees were almost non existent at 1500 bucks fast forward to the mid two thousands it reached close 23,000. The builders can walk away if their investment fails just like all these unhappy homeowners. And the City still gets their fees and fines when the house sits for several years. Tell it to somebody who doesn’t know. I grew up here from a teenager to nearly a forty year-old man. The faces change the game stays the same.

  20. Susan R says:

    From the outside looking in, Palm Coast looks like a beautiful community. I’m shocked by the # of vacant homes, short-sales and foreclosures. I got the last boat out of NY (I hated the full 19 years I lived there, after growing up in Maine for 19 years prior). I moved to the Raleigh, NC area six years ago and intend to move to Palm Coast when my youngest graduates from HS (he’s a Freshman now). Can someone tell me what neighborhoods/streets/areas to avoid? We are in our 40s and intend to live in PC forever. We’ve been watching the PC market for almost 9 years (we almost moved to FL, but my sister and my cousin are in NC so we chose to move here – they’ll be following us to FL most likely). As a 3 time homeowner I can’t understand why on earth the city/town/county would approve new construction housing permits with SO many homes on the resale market in PC?! It blows my mind. It’s keeping inventories high and housing prices low. Developers who bought land prior to the collapse are hoping to build smaller homes and either break even or turn a bit of a profit, but at what true expense? The expense is the current homeowners’ for sure! Property values are in the toilet in PC. It’s such a beautiful place and such a great location (95 runs through it, it’s close to the beach, etc. – I don’t need to tell you all, I’m sure. Sorry.). There are estimates that less than 50% of foreclosed homes are even listed on the MLS (just due to the backlog of getting them listed). How much further will property values tumble before those in charge of issuing building permits for new construction say no more! I feel for your plight, PC. Any advice to someone looking to move to PC? We want a single family home in the 1800-2500sq ft range, no more than 15 years old if possible unless updated (i.e. roof, a/c) and hope to have another pool and at least .25 acres (preferably .5). We’ve lived in two homes we renovated from top to bottom (ourselves) and one home that was two years old when we bought it (current house). Where should we avoid looking? We’ve had some awesome neighbors and some really scary ones. We don’t want to live in a neighborhood full of souped up cars with loud exhaust systems and people racing through the streets (we left that behind in NY, thankfully). Thanks for your time, and good luck to you all. I hope to be a neighbor soon! -Sue & Ron

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