Thompson Thrift, out-of-state developers for the District at Watermark, have sued Germantown over the rejection of the apartment complex by the Board of Mayor and Aldermen. The company filed the petition Sept. 7 in Shelby County Chancery Court.

Germantown voted against the controversial 310-unit apartment complex planned in Forest Hill Heights on July 23. Alderman Rocky Janda was the only one to vote in favor of the project. The four other aldermen voted against the project citing a variety of reasons — from citizen feedback to trust issues with the developers.

Residents Jamie Picunko and Phil Conner had filed a lawsuit against the city in February after the planning commission amended the Forest Hill Heights density limit from 12 units per acre to no limit. Developer Paul Thrift called Picunko to try to come to an agreement on the project. He also offered to pay the citizens up to $50,000, Picunko said, which caused some aldermen to lose trust in the developers.

The petition filed by Thompson Thrift says there were no trust clauses in the project and that the board's rejection of the project was "illegal, arbitrary and capricious."

Watermark was already in approval phases before the 18-month apartment moratorium was approved on Jan. 8. City attorney David Harris said the city was bound to developers' vested property rights on Jan. 22. He said they received those rights when the preliminary plan was approved by the planning commission Nov. 7.

The petition also said state code was violated by denying the vested property rights.

The zoning for the land where Watermark would like to develop, near Winchester and Crestwyn, was previously zoned for office space only and is now T5 urban zoning under Smart Growth, which allows apartments.

When Forest Hill Heights was annexed into Germantown in 2000, then-Mayor Sharon Goldsworthy and aldermen promised they would not change the zoning, according to Conner. He said the promise was upheld until 2016, and he and neighbors have been forced to fight against apartments for a couple years

"We are concerned because the current administration has ignored promises made," he said. "Elected officials only uphold promises if it's convenient for them. We have elected officials who will not uphold the promises of the city."

Lew Wardlaw, attorney for the developers, declined to comment on the case. Efforts to reach Jessica Tuttle of Thompson Thrift were unsuccessful.

City Administrator Patrick Lawton said attorneys are working on their responses.

Conner says the developers' plans were "speculative" until they gained final approval.

"They gambled and lost and now they want the court to reset the table."

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