Defying the threat of a lawsuit by a developer, the Palm Coast City Council late Tuesday evening voted 5-0 to stand by its decision last year to limit the Cascades development in Seminole Woods to 416 single-family houses.
The council had in 2023 approved a limit of 850 dwellings, then reversed course in the face of staunch opposition. The additional housing units would have been apartments–always a volatile subject in Palm Coast, where prejudices against apartment complexes persist despite a shortage. But a city infrastructure under strain also factored into opposition to the higher density. The council’s defiance reflects how far the pendulum has shifted against development.
Last November, Byrndog LLC, the Douglas Properties subsidiary behind the development, sent a so-0called claim letter to the city under the Bert-Harris Act. The developer made a claim for $12.2 million, the revenue it calculated the city was denying it by denying the higher density. The claim letter is a required first step under law in what would then likely turn into a lawsuit, if the city were to refuse the claim, or refuse to negotiate a settlement. The city had until today to respond.
City Attorney Marcus Duffy brought up the matter at the end of Tuesday’s meeting, referring to the Nov. 6 claim letter. He recommended two options: either “stay put” with the previous decision, or offer more density (a higher number of entitled housing units). He said 219 single-family houses “could be offered.” But not apartments. The 5-0 vote was to stay put.
The council rallied behind Council member Theresa Pontieri, who approved of a 416-unit development but had led the opposition to 850 units since Byrndog requested the increase in 2023. Pontieri is the only member of the council who was on the council in 2023 and 2024, when it voted on the Byrndog requests in a series of meetings. Numerous residents in support of standing by the 416-house limit addressed the council Tuesday.
“We cannot continue to annex in property and then double density,” Pontieri said. “We have water problems in this city. The applicant stood at that podium right there and accused me of fear mongering. He called me a fear-mongerer, and said, You are fear mongering, talking about the issues with water. Here we are. Two years later. We are under the thumb of DEP because of our water issues.” The city is under a consent decree from the Department of Environmental Protection because one of its two sewer plants is often over capacity. “I am also concerned with the infrastructure for our roads and our traffic. Again, I’m called a fear monger.”
The council’s defiance reflects how far the pendulum has shifted against development.
Pontieri, an attorney, all but invited a lawsuit as she summarized the history of the case in the language of a legal pugilist. “We’re not dealing with facts that support this claim,” she said. “We’re not dealing with law that supports this claim. We’re dealing with somebody who is trying to bastardize our system. And I cannot abide by that. When I look at the letter, the Burt-Harris letter that was sent to our attorney, it is so hollow and truly lacks any merit whatsoever.” She called the letter “legally insufficient” (a term usually used by judges who toss out lawsuits), then took explicitly took on the attorney who wrote the letter.
Council member Ty Miller said he’d been “torn” about how to respond to the claim letter, but Pontieri’s summary analysis convinced him to side with her. “I’m open to persuasion in these cases, and I think you did a very good job of that,” Miller told Pontieri. “My biggest concern is risk and trying to reduce that. A price tag of multi millions dollars is a lot for us to bear.” Council member Charles Gambaro said the risk is substantial. Some municipalities have defeated such claims. But he asked: what if Palm Coast lost? How will it pay?
Duffy didn’t directly answer the question. He told Gambaro the city would have to pay the claim, plus attorney fees, which Gambaro already knew. He did not say how the city would pay. Gambaro said if the council was willing to assume that risk, he’d go along. But he wanted the risk to be clear. The council assumed the risk. (Pontieri made the motion, Council member Ray Stevens seconded.)
“I was on the council during this entire process, and it is my opinion, very strong opinion, that this is yet a third bite at an apple from a developer to try to get more density that they’ve never been entitled to, that they have no right to,” Pontieri said. She summarized the history of the matter, which dates back to when the land was under the county’s jurisdiction. In 2005, the Cascades was a planned unit development, or PUD, approved by the county for 416 single-family houses. The city annexed the property. “We granted that annexation based on the fact that it was 416 single family units,” Pontieri said.
“Now I asked during that meeting, what’s on the back end of this? What are you guys going to ask from us?” Pontieri said. “Because inevitably, these developers often do come back and ask for more, and lo and behold, that’s exactly what happened.”
Pontieri is not remembering quite correctly. She had not actually verbalized her concern about what would come next. She had only thought about it. There’d been no such discussions or controversies at the time the land was annexed. The council passed the annexation ordinance on Aug. 1, 2023. There was no discussion of dwelling units. The brief discussion focused only on the fact that the annexation stemmed from the developer’s request for city utility services, which made annexation automatic. Pontieri asked only if the city had any discretion in the matter. A planning staffer said the city had no such discretion. here was more discussion about the location of the land in relation to the county airport than about dwelling units, which were not discussed. The motion passed unanimously.
The matter returned to the council in September 2023 as a comprehensive plan amendment and rezoning, when Senior Planner Jose Papa said there would be an increase in the approved housing units. “The limit of 850 dwelling units is an increase over the 416 dwelling units which was permitted within the approved PUD,” he said. “850 is a cap,” he said.
It was at that meeting that Pontieri raised objections and sought to keep the total number of housing units at 416. Jeff Douglas, the developer, just as strongly objected to the characterization of the rezoning as “doubling” housing units on the PUD, since the additional units were tied not to the original land, but to a so-called “hook piece” (so described because the parcel is in the shape of a hook) that was added to the overall plan. In the developer’s view, that addition provided for the right to add dwelling units. Byrndog intended to build apartments there. But even to city planners (and their documentation), the proposal added up to a doubling of units.
“I’m not okay with this. I understand that property owners have rights. I understand that things change. I understand that we’re growing as a city, and I am in favor of all of those things,” Pontieri said at the September 2023 meeting. “But when we’re looking at the concentration of the density, that’s smoke and mirrors because we’re talking about a four-story building that we’re putting up against homes.” She also referred to the city’s utility capacity. “I was fine with annexing this property in. I remember when we annexed it in, because it wasn’t that long ago, thinking to myself, I wonder what the ask is going to be on the tail end of this. And here we are.” (Emphasis added.)
In Byrndog’s view, it had agreed to be voluntarily annexed into the city “In reasonable reliance on the assurances and representations of the City that no limit lower than 850 dwelling units would be imposed,” Steven Gieseler, the attorney representing the developer, wrote in the Nov. 6 letter. But annexation wasn’t contingent on density, but on the developer’s utility needs. While density may have been an administrative assurance, it was not binding absent council approval. The council did approve the 850 housing units in the first reading of the rezoning ordinance, then reversed in the face of public opposition.
That pre-annexation agreement may be a key part of litigation, if it comes to that. “If we do go to trial with these people,” Mayor Mike Norris said, “I will love to see the testimony of the people they said negotiated that deal pre annexation. I’ll happily open up that court for them to come and testify.”
Joy Cook, who described herself as “the voice of Seminole Woods for the past two years,” urged the council “not to give into the demands of this and settle with this developer,” and that the council’s decision “should remain just that: final. This threat of a lawsuit opens up doors for a new loophole for all developer-builders to use as a negotiation tool. If they don’t get what they want, they will sue in hopes that the city will settle and get them closer to their original goal.”
“You guys did nothing wrong,” another Seminole Woods resident said. “You fought for what was right for the city and your residents. You made a very good business decision. This decision should stand. Please do not let these developers or builders or attorneys strong arm you in revisiting your good and binding decision. Stand your ground and say no for the last time.”
The council had taken up the matter past 8:30 p.m. Tuesday. It was not on the agenda, but as was reported here Monday, every council member and numerous residents knew it would be brought up. The developer or his representatives were not in the room.
Jan says
Good for the Council. 416 houses are enough for the Cascades development.
Frank says
Everything in palm coast is bulldozed and destroyed. Glad i moved last year from this town. Developers ruined a nice peaceful town. Now its just like the rest, orlando, Jacksonville, Daytona.
Kandi Stevens says
Prove we have the water to supply to ALL the new home. PROVE we have the utility capacity as well. WE DO NOT! New council. New precedent. Excellent job!!!