After the Sanford City Commission squashed a proposed financing arrangement for Heritage Park, the developer behind the long-planned mixed-use project is accusing the city of breaching its contract and violating the Florida Fair Housing Act.

Sanford Waterfront Partners sent a letter on Dec. 8 to City Manager Norton Bonaparte and City Attorney Lonnie Groot threatening legal action if the commission doesn’t reverse its vote and allow the developer to obtain $75 million in financing from a third-party entity, Capital Trust Authority.

The funding is intended to help Waterfront Partners deliver a mixed-income housing product to city-owned downtown property in which 47 of the 236 units are designated as affordable.

Groot said in an email to GrowthSpotter that the city denies all allegations made by the developer.

“All that the City has to say at this time is that it will provide an appropriate and timely response and is in the process of evaluating the contents of the letter,” he said. “The City denies each and every allegation and (the developer) has repeatedly agreed that the city is not in breach of the development agreement.”

The letter from Sanford Waterfront Partners (SWP) mentions comments made by Commissioner Patty Mahany during the Nov. 14 meeting regarding a newly introduced plan to bring affordable studio units to Heritage Park.

In voting to deny the financing plan, Mahany said: “I just don’t understand how we can put affordable housing in the very center of our downtown. When we are trying to create a catalyst for economic development, how does low-income housing help that? I wish someone could show me some other cities that have done that on their most valued pieces of taxpayer-owned property.”

Jon Polenberg, a Fort Lauderdale-based attorney with the Becker & Poliakoff law firm, wrote in the letter on behalf of SWP that there is nothing in the 2017 agreement between the city and the developer requiring that the units be rented at market rate.

Polenberg said that the city denied approving a funding source for the project because it includes affordable housing.

That, he said, is a violation of the Florida Fair Housing Act, which states “It is unlawful to discriminate in land use decisions or in the permitting of development based on race, color, national origin, sex, disability, familial status, religion, or, except as otherwise provided by law, the source of financing of a development or proposed development.”

The letter also accuses the city of a breach of contract.

In 2015, the city issued a request for qualifications to develop a 5.6-acre property in downtown Sanford, known as the Downtown/ Waterfront Catalyst Site. The city selected Torre Construction and Development, a predecessor to SWP, to be the developer.

The two parties signed a development agreement on May 11, 2017, for a plan that called for about 235 housing units, 35,830 square feet of non-residential, commercial space and about 370 parking spaces.

The letter also claims the city exercised “unreasonable conduct” in denying two efforts by SWP to secure financing.

In 2021, Sanford Waterfront Partners, led by Venny Torre and Rich Heisenbottle, attempted to bring on New Jersey-based multifamily development company The Michaels Organization as a co-developer for Heritage Park. The city did not grant that request.

Most recently, SWP pursued $75 million in financing from Capital Trust Authority, which was formed in 1999 via a partnership with the city of Gulf Breeze. The small city near Pensacola of roughly 6,500 people would serve as the government body helping Heritage Park qualify for tax-exempt bonds. The city of Sanford would not have been liable for any of the financing costs.

In rejecting the funding proposal, city commissioners said the current plan for Heritage Park doesn’t match what was promised when the city inked the original agreement for the project.

Mayor Art Woodruff said the project is supposed to include some single-family homes available for purchase and not just for-rent apartments.  Polenberg wrote in the letter that nothing in the development agreement requires the units be rental or fee-simple.

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