Scottsdale must pay investors in a local office complex $195,000 for damages related to flooding, a jury ruled Wednesday, while state transportation officials have to pony up more than $7 million.
Scottsdale Perimeter 1, the investment group that owns about 16 acres of vacant property within the Perimeter Center office park had sued Scottsdale, the Arizona Department of Transportation and HDR Engineering, the company that prepared Loop 101 drainage and construction plans, for up to $11.3 million. The Perimeter Center is situated between Union Hills and Princess drives on the west side of Loop 101.
Steve Hirsch, the investment group's lawyer, said ADOT and HDR Engineering settled prior to the conclusion of the trial. The two agreed to pay the investors a total of $4.75 million. The state has also begun building a $2.5 million basin adjacent to Loop 101 to diffuse storm water flows that had gouged new washes across the property, rendering the land unable to use for development, he said.
The Maricopa County Superior Court jury also found Scottsdale liable for $195,000 in damages. Bruce Washburn, deputy city attorney, said he had no comment on the verdict, and that a decision on how to proceed will be up to the City Council. Hirsch said the investors are waiting to see the results of the state's new anti-flooding measures before deciding what to do with the land.
The origins of the dispute date back to 1989, when the city approved a master drainage report for the Perimeter Center site that relied on the proposed $100 million Desert Greenbelt drainage system and the construction of Loop 101 to divert storm water, according to the lawsuit. The current owners bought the property in 1999 with that plan in mind.
The Desert Greenbelt proposal called for an 11-mile system of channels, retention basins and levees in north Scottsdale.
The greenbelt never was built, though. The City Council killed the project in 2000 in response to residents who objected that it was neither necessary nor aesthetically pleasing, but not before spending about $22 million on studies, designs and land acquisition over 10 years.
Hirsch has said the city's reversal on the Desert Greenbelt left the Perimeter Center with high floodwater volumes that had not been considered in the city-approved drainage report.
Scottsdale denied responsibility and contended that the investors' claims are barred by statutes of limitation and because the city possesses sovereign immunity.
The lawsuit also alleged that in 2002, ADOT built the segment of Loop 101 adjacent to the property without appropriate anti-flooding measures because of political pressure to finish the freeway. State officials installed culverts under Loop 101 which forced floodwater into narrow channels that spilled out onto the property, according to the lawsuit.