Riverside’s village board quietly approved a settlement at its meeting on Aug. 15, heading off a potential legal showdown with the developer of the Delaplaine Crossing townhomes at the corner of Delaplaine Road and Burlington Street. The settlement, passed as part of the board’s omnibus agenda, will end up costing the village thousands of dollars in permit and inspection fees Riverside would have collected from the developer on the project.

According to the settlement agreement, Riverside agrees to “waive any and all permit and inspection fees in connection with the townhome project and shall promptly return any amounts previously deposited by Delaplaine.” In return, Delaplaine Crossing agrees not to sue Riverside for previously approving plans for a condominium building to be built at 315 E. Burlington St. and then denying the building permits.

The agreement lays out the sequence of events leading to the threat of litigation.

After several meetings with Michael Marro, the village’s chief building inspector until his retirement at the end of 2004, and the fire department, the developers, Glen Pennington and Allen Balk, revised the plan “in such a way that it met every zoning requirement,” according to the settlement agreement.

The final plan called for a three-story masonry building containing 20 condominium units and enclosed parking on the first floor, and Pennington gave the go ahead to draw up architectural and engineering plans since the development complied with the Riverside zoning code.

Based on the verbal approvals he received previously from Marro, Pennington applied for building permits and received a demolition permit to level the service station that previously stood on the corner. He also made arrangements with utility companies to relocate existing utilities to accommodate the condo project.

Then came the shocker?”Marro denied a building permit for the condo project.

“One of the things I didn’t appreciate is that we did everything [Marro] wanted,” Pennington said. “He gave it his blessing, and 90 days later he calls up and said we still had problems.”

The denial prompted additional meetings with Village Manager Kathleen Rush, and ended with Pennington scrapping the entire condo concept and having the project redesigned to include nine townhomes, for which a building permit was finally approved in the spring of 2005.

According to Pennington, the development company spent “close to six figures” on the final architectural and engineering plans for the condominium building and that “total costs incurred were two to three times the actual permit fees.”

As a result, the Delaplaine Crossing development company will be refunded the roughly $45,000 it has already paid to the village in building permit fees. The language of the settlement agreement also appears to waive any future fees for inspections provided by the village, although Rush appeared to believe that the company would pay for any future fees.

“I can’t explain away that there was a review done and a verbal exchange [that approved the condo plans],” Rush said. “On closer examination it was stopped.”

Rush confirmed that the threat of a lawsuit against the village by the developers prompted the village to agree to the settlement. Rush also commended the developers for working with the village to not only come to the settlement but change their plans.

“There was disappointment and concern on everyone’s part, but I appreciated their business-like manner in working with us,” Rush said.

Despite the misunderstanding, Pennington reaffirmed his enthusiasm for the townhome project that replaced the original condo concept.

“I’m glad it’s over,” he said. “It’s such a beautiful project we’ve got going here.”