City lawsuit against developer dismissed

A 2018 lawsuit brought by the City of Minot against a southeast Minot developer has been dismissed by agreement of both parties. The city announced the dismissal following an executive session of the city council Tuesday.

The city had filed for breach of contract in May 2018 against 16th Crossing, Inc., owned by Nathan Smith, to recover nearly $6 million in federal and city dollars spent on a stalled low- to moderate-income housing project, adjacent to 55th Street Southeast.

In a release from the city Tuesday, it was announced that Smith, new owner Stonehaven, LLC, and new development company, Meritage Communities, are planning a substantial mixed-used development at the 55th Crossing location to include single-family homes, townhomes, upscale apartments, public areas, bike paths, a school and more. They hope to begin construction this spring.

“The City believes the development could be a substantial benefit for the area and its residents as the city continues to grow. The City looks forward to discussions with Smith, Stonehaven, LLC, and Meritage Communities as they refine their concept,” the release stated.

The City of Minot had entered a development agreement with 16th Crossing in 2013, contributing $5 million in Community Development Block Grant-Disaster Resilience funds to provide water, sewer, drainage and access infrastructure. In exchange, 16th Crossing was to construct 178 townhomes by July 2015. The city argued 16th Crossing also agreed to provide 350 manufactured homes, although the developer stated the agreement was to set aside 350 lots that can be used for manufactured homes. The agreement specified that 51% of housing was to be affordable for low- to moderate-income residents and remain so, once occupied, for three years.

In August 2017, the city concluded 16th Crossing was making insufficient progress under the agreement. After allowing time for the developer to take action, the city terminated the agreement in December 2017 and sought to recoup its funds.

In addition to the CDBG-DR funds, the city had spent $951,194 of its own money on public infrastructure.

Responding to the city’s lawsuit, 16th Crossing countersued, alleging the city’s delays in installing infrastructure, followed by economic changes when the oil boom ended, led to its inability to provide the promised housing units.

The court in January 2022, granted a partial summary judgment to 16th Crossing. North Central District Judge Richard Hagar determined the $5 million in CDBG-DR funds was not a loss to the city and dismissed those damages.

The latest dismissal of the case cancels a bench trial that had been scheduled to begin Feb. 6.


Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *

Starting at $4.62/week.

Subscribe Today