Tentative settlement in Mount Holly Gardens case

MOUNT HOLLY A tentative settlement has been reached in the widely watched Mount Holly Gardens housing discrimination suit, which could prompt the township to withdraw its appeal of the case to the U.S. Supreme Court.

James Potter, the president of a group of nearly 30 Gardens residents who sued in federal court in 2008, alleging discrimination, said a settlement was recently reached, though final signatures are still needed.

A settlement would make a hearing scheduled for December before the high court moot.

The Supreme Court would have been asked to decide whether the township could be held responsible for unintentionally discriminating against minorities when it condemned the blighted neighborhood a decade ago.

The lawyers for both sides could not be reached for comment Thursday night.

"Some of us will move into new houses and get a house for a house," said Potter, explaining that 20 of the homeowners in the Gardens would allow their houses to be demolished and agree to be relocated to the new development in that neighborhood, which calls for more than 200 houses and some retail space. Seven residents would receive buyouts to move out, but Potter said he was "not at liberty" to say how much they would be offered.

Mount Holly Mayor Rich Dow said he could not comment on ongoing litigation. But he added: "The township continues to look at all options and is always interested in pursuing negotiations."

Housing, banking, and local government officials nationwide have been paying close attention to the case. A high court ruling would affect whether they could proceed with projects without being concerned with potential "disparate impact" on minorities. A similar civil rights case from St. Paul, Minn., was settled in 2011 shortly before the justices were scheduled to hear arguments.

In the Mount Holly case, the U.S. Court of Appeals for the Third Circuit in Philadelphia had ordered a trial to determine whether the town's redevelopment plans would displace a neighborhood that consisted mostly of African Americans and Hispanics, upsetting the racial balance of the town. Over the years, the Justice Department has sued developers over similar issues nationwide and also banks that had approved a disproportionate number of mortgages for minorities for properties that were later foreclosed upon.

The Supreme Court agreed to hear the Mount Holly case to rule on whether the legal theory of disparate impact is valid. Mount Holly lawyers filed challenges, saying the policy would prevent municipalities from redeveloping neighborhoods occupied mostly by minorities. The lawyers said that the Gardens was blighted and crime-ridden, and that the township council proposed a decade ago to demolish it and build market-rate homes and stores. Disparate impact is often determined by a statistical analysis.

Gardens residents asked South Jersey Legal Services to file a discrimination complaint on their behalf.

Potter said Thursday it was unfair for Mount Holly to take the homes of mostly low-income minorities to build homes for people with means.

After the federal suit was filed five years ago, a U.S. District Judge dismissed their claims, but the Third Circuit said a trial was warranted to see if the project adversely affected minorities. The township then appealed to the Supreme Court before a trial was scheduled.

Potter said that "due to the sensitive nature of the negotiations, there's not a great deal I can comment on." But, he said, "I'm optimistic that it's going to end well for us."

856-779-3224 @JanHefler

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