City to pay Wal-Mart legal fees

Developer must be reimbursed for first suit against city, judge rules

The tab for taxpayers is growing in the city’s fight to prevent Wal-Mart from building in northwest Lawrence.

Douglas County District Judge Michael Malone on Wednesday reaffirmed that City Hall must pay the legal bill for 6Wak Land Investments LLC from the first round of litigation filed more than a year ago.

“We’re pleased, of course, with the order,” said Mary Jo Shaney, an attorney representing 6Wak, which owns the land where Wal-Mart was denied permission to build.

“We need to review the judge’s order with our attorney,” said Assistant City Manager Dave Corliss. “We don’t have any other comment.”

Plaintiffs have said the decision could add as much as $90,000 to the $160,000 the city has paid in legal bills associated with the seven lawsuits filed in the case.

6Wak filed the first lawsuit in May 2003 after the city refused to issue a building permit for an unidentified restaurant that would share the northwest corner of Sixth Street and Wakarusa Drive with a proposed 132,000-square-foot Wal-Mart store. Officials say the proposed restaurant is inextricably related to Wal-Mart’s plans.

But City Hall never issued a written permit refusal. Malone last year ruled that City Hall had failed to follow its own policies and practices by not putting the refusal in writing and ordered the city to pay 6Wak’s legal bill for the action.

After Malone’s order, officials gave written denial of building permits for the restaurant and Wal-Mart, which helped spark the other suits, and city attorneys asked Malone to reconsider his order that City Hall pay 6Wak’s legal bills in that first case.

Wednesday, Malone declined City Hall’s request.

“The city’s contravention of its own procedures in refusing to issue a written order either approving or disapproving 6Wak’s building permit was unreasonable,” Malone wrote in his memorandum decision.

Shaney estimated 6Wak’s legal costs from that first case at about $85,000. Bill Newsome, a partner with Lawrence developer Doug Compton in 6Wak, has estimated the bill at closer to $90,000.

“We’re very pleased with this decision,” Newsome said. “A cornerstone of this case has been the city’s failure to follow its own regulations…. What they did was not legal.”

On Sept. 3, Malone will hear arguments from attorneys over how much of the bill City Hall should pay.

The other cases — some brought jointly by 6Wak and Wal-Mart and some just by 6Wak — address a variety of issues, including the city’s refusal to issue the building permits and the city’s attempt to charge 6Wak for the cost of building roads and other infrastructure at the empty site. Those cases are pending.

The city says Wal-Mart is a department store prohibited by the zoning that was in place at Sixth and Wakarusa at the time of its refusal. Wal-Mart and 6Wak say it is an allowable variety store.