Wednesday, November 11, 2009

Land developer files $6 million lawsuit

DeNovo Independence blames title company for unexpectedly low property value

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By TREVON MILLIARD
Express Staff Writer

Developer DeNovo Independence’s plans to develop its property in the hills above Elkhorn were denied by the city of Sun Valley. Now the developer is suing its title company. Photo by Mountain Express

A developer called DeNovo Independence has been trying to build an upscale housing development on the hills above Elkhorn for a year, but it turns out that not even a single house could be built due to Blaine County zoning rules.

DeNovo's entire 93-acre property is zoned in the county's Mountain Overlay District, which greatly restricts development on slopes exceeding 25 percent grade.

A lawsuit filed by DeNovo on Oct. 9 in Blaine County 5th District Court claims that information came as a surprise and alleges that its title company, Sun Valley Title, informed it that the land was labeled "rural remote," with a small portion zoned "Residential-10." These zonings allow for more development than does the Mountain Overlay District.

DeNovo claims the title company's alleged mix-up has "substantially" decreased the property value by far more than the title policy's $6 million value and is suing Commonwealth Title Co.—underwriter of Sun Valley Title Co.—for the full amount of its policy.

The land is almost entirely zoned Rural Remote, which allows one house per 40 acres, or about three houses for DeNovo's entire 93 acres. But the Mountain Overlay District overrides that and allows only one house per 160 acres. Because DeNovo has only a little more than half that acreage, not even a single house could be built there.

According to court documents, DeNovo sent a letter to Commonwealth Title Co. on July 23 asking for the full amount of its title policy, but did not receive a response.

Three months later, the Sun Valley City Council denied an application by DeNovo to have its land annexed into the city so it could build a 12-house development there. The City Council ruled that houses couldn't be built on slopes of 25 percent or greater for safety and aesthetic reasons—a decision supported by many residents.

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Since Sun Valley refused the request, DeNovo's property remained part of Blaine County, and DeNovo was stuck with the county's Mountain Overlay District.

DeNovo also alleges in its lawsuit that Commonwealth assured it that its property would have vehicle and pedestrian access year-round by way of Triumph Gulch Road. But the U.S. Bureau of Land Management closes the road in winter. DeNovo claims that also decreased the value of its land.

DeNovo is seeking a jury trial in 5th District Court, but no trial date has been set. Commonwealth has yet to file an answer to the suit.

Neither DeNovo's nor Commonwealth's attorneys responded to calls from the Idaho Mountain Express by press time Tuesday.

Trevon Milliard: tmilliard@mtexpress.com