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ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
A Growing Problem: Suit Happy Developers and Builders
Friday, 06 October 2006

South Texas development battles are heading to court more often
Wrob is part of a growing number of city officials and residents who spoke out against real estate projects by San Antonio developers — and were then sued by the developers when the deals soured... In another lawsuit filed Aug. 17 in Bexar County, developers Schaefer and Earl made similar allegations against more than two dozen residents and city officials, most of whom fought a proposal to provide tax incentives for a large development in Del Rio near Laughlin AFB...Homebuilders occasionally have sued customers who publicly complained about what they said was shoddy workmanship. And Schaefer hasn't hesitated to sue city officials whom he disagrees with — he's filed more than a dozen lawsuits against San Antonio over housing projects...“This guy is not only shooting himself in the foot,” McIlwain said, “he's also shooting himself in the knee and the left arm.”

Exress News
South Texas development battles are heading to court more often
10/04/2006

John Tedesco
Express-News Staff Writer

Del Rio City Councilman Mike Wrob had never been shy about criticizing a proposal by two San Antonio developers that would earn them millions in tax incentives.

But Wrob was shocked when the developers, John Schaefer and David Earl, sued him, his colleagues and several residents of Del Rio and accused them of a “conspiracy” to kill the deal.

“I think it's ludicrous,” Wrob said. “It's a bullying tactic.”

Wrob is part of a growing number of city officials and residents who spoke out against real estate projects by San Antonio developers — and were then sued by the developers when the deals soured.

Last week, Balous Miller, president of the Bill Miller barbecue restaurant chain, filed a lawsuit against members of the Helotes City Council and a citizens group that opposed the construction of a Wal-Mart Supercenter on a 32-acre tract of land owned by Miller.

Miller alleged that city officials and residents conspired x and used “extensive negative publicity” that ultimately drove Wal-Mart away.

In another lawsuit filed Aug. 17 in Bexar County, developers Schaefer and Earl made similar allegations against more than two dozen residents and city officials, most of whom fought a proposal to provide tax incentives for a large development in Del Rio near Laughlin AFB.

The lawsuit claims the defendants conspired to “embark on a deliberate and calculated campaign to spread false statements” and force the Del Rio City Council to back out of a tax increment financing zone that could have raised up to $130 million in tax revenues for the developers.

Receptionists for Miller and Schaefer said they were out of town Wednesday. Messages left with Miller's lawyer and Earl, who is Schaefer's lawyer in addition to being a developer in the Del Rio land deal, weren't returned.

Homebuilders occasionally have sued customers who publicly complained about what they said was shoddy workmanship. And Schaefer hasn't hesitated to sue city officials whom he disagrees with — he's filed more than a dozen lawsuits against San Antonio over housing projects.

But the recent lawsuits by Miller, Schaefer and Earl also target everyday people who say their only crime is speaking up at public meetings and signing petitions.

Del Rio lawyer Jan London said her 82-year-old mother-in-law was named as a defendant.

“It's about quelling free speech, to get everybody to shut up,” London said.

John McIlwain, a senior fellow at the Urban Land Institute, a research organization with 33,000 members who work in the real estate industry, said suing critics of development projects is a terrible idea.

“If it's one thing communities have, it's a right to speak out and express their views,” McIlwain said. “That's the American way, for heaven's sake.”

McIlwain acknowledged that a “not in my backyard” mentality pervades many communities. But many developers realize it's good business to try to work with residents.

McIlwain pointed out that Miller still owns the land in Helotes, which means if he wants to develop it, he'll have to deal with the very people he's suing.

“This guy is not only shooting himself in the foot,” McIlwain said, “he's also shooting himself in the knee and the left arm.”

The lawsuits put Earl in an unusual position. As a lobbyist, he represents Schaefer and other developers, and he's a business partner with Schaefer in the Del Rio project.

But Earl also works for Helotes as its city attorney. In a past interview, he said the Helotes council members did nothing wrong in opposing Miller and Wal-Mart. He did not offer his opinions of residents who were critical of the deal.

Resentment against critics who oppose controversial projects has simmered for many years among some members of the San Antonio real estate industry, according to interviews with developers and their lobbyists, and past newsletters published by trade groups.

“The democratic process allows any politician with an agenda, any organization with a big enough showing, even any bureaucrat with enough zeal to initiate legislation that impacts others more than themselves,” David McAllister, then president of the San Antonio Real Estate Council, complained in a January 2000 newsletter.

In 2003, developer Mark Granados filed a $25 million defamation lawsuit against environmentalist Richard Alles. The suit was dropped, Alles said, but the strategy worked.

“Yeah, it's effective,” Alles said. “When you get sued for $25 million, it not only takes up a lot of your time defending it, it's really discouraging for people like me and the Helotes Heritage Association who are doing all this stuff as volunteers.

“I'm a lot more careful about who I talk about and what I talk about,” Alles said.


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