Sterling Place Settlement One More Time | June 15, 2008

Open Response to Chris Hanson
In reply to your broadcast email of 6/13/08

The fact that you are willing to play high stakes poker in State and Federal Court with Village money demonstrates a recklessness that is unfathomable. What if the village lost the appeal, like you and David lost the lawsuit, with the judge’s ruling that your actions were “arbitrary and capricious? What kind of legal background and understanding do you have to put the Village at such financial risk?

Now you and David want to take credit for putting the Village in a difficult, precarious financial situation claiming that your actions led to the favorable settlement negotiated by Mayor Stebbins and Trustee Darby. However, you were against the settlement. You and David McFadden had no interest or made no attempts to negotiate a settlement. You and David were willing to take your chances in State and Federal Court, a reckless management style that needs to stop.

The Facts of Sterling Place
It is necessary to reply to politically motivated “information” about this settlement to present a more balanced understanding and to correct the misstatements on this subject.

  • The Village spent over $50,000 in legal fees without undertaking any initiative to understand what a negotiated settlement might produce as an alternative to continued litigation.
  • Settlements are most workable when both sides are uncertain about the litigation outcome and value the economic components differently.
  • If the Village were to lose the NYS Appellate Court decision, the result would have substantially strengthened Sterling Place’s federal litigation that sought damages against the Village of $5 million, for which we were directly exposed without insurance coverage. This would have effectively bankrupted the Village.
  • As to the concern about unconditional and unlimited water for Sterling Place, we need more customers to cover the fixed costs of our Water Plant that operates at about 45% of capacity. This fact makes the process of how we got to this point incredibly ill-conceived. By settling, we generate more revenues for our water plant, get paid a financial settlement, and create a buffer of land for the Park. We can reassert our legal arguments in the future, should the Village decide it does not want any more new customers from new developments for our Water Plant.
  • The answer to the question why Sterling Place settled is that the developer’s next best alternative would cost just about as much. The Village should receive $375,000 in cash and somewhat more in value for the three lots versus Sterling Place’s cost of $750,000 to $1 million to obtain water from United Water one mile up the road.
  • It is important to understand that the project would go forward no matter what the legal outcome, since an alternative supply of water was available. So, why not obtain value for the Village in a consensual settlement? Please note: Had Sterling Place “won” in court, there would be no obligation for them to settle with the Village.

Most of these comments were made at the time the settlement was announced earlier this year by the Board of Trustees. The Mayor and three Trustees who were present when the vote was taken voted in favor of the Sterling Place settlement. It is important for everyone to understand the rationale for this action, which has unfortunately been belatedly chosen for discussion at this time for divisive political purposes.

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