Lawsuit Over HSAD Still Working Through the Legal System

     After five months, the City of Homer is still in the midst of a lawsuit filed by a local condo owner. Kachemak Bay Title co-owner Ken Castner submitted the paperwork after city officials approved the controversial Homer Special Assessment District to pay for a natural gas distribution system.

     Since March, the city and Castner have been volleying back and forth requesting what’s called a “summary judgment” with the court. That’s when you’d like to wrap up the lawsuit without the need for a trial. At the end of June, the judge heard arguments from both sides and now it’s just in a holding pattern.

     The problem has been the way the city assessed condo owners. Each condo is considered individually rather than as a single lot. So it’s pretty easy for a condo owner to rack up a tidy sum of money. In Castner’s case, his total assessment was estimated around $20,000. But for a different piece of property, like an apartment building, the cost is only around $3,200. That didn’t sit well with Castner or his fellow condo owners. He spoke up during several Homer City Council meetings like this one back in February.

     “I’m going to suffer the economic penalty of being a condominium owner because I’m a loser. Because of the way you’re interpreting this law,” he said.

     In Chapter 34 of Alaska’s property code, the law states that a condo with an individual owner “constitutes for all purposes a separate parcel of real estate.” And because the state doesn’t have a strict code when it comes to creating special assessment districts, cities can basically develop something that works best for them and the situation. 

     In the midst of all the discussion and the threats for legal action, city officials decided it might be a good idea to get another legal opinion. They actually got two and both agreed with the way Homer City Attorney Thomas Klinker was interpreting the law. That wasn’t enough for Castner and he filed a lawsuit anyway back in March.

     “They’re an adversarial opinion. They’re an opinion that’s a bought for opinion supporting the city’s case,” he said.

     At the time of the filing, Castner told KBBI News that he wasn’t intending to stop the distribution system project. All he wanted was equal treatment and protection. In his complaint, he wrote “the cost of the assessments placed upon his building are unreasonable and non-proportional and far outweigh the value or benefit of the gas distribution utility.” 

     That’s similar to what State Assessor Steve Van Sant considered a condo owners only real line of defense. He said it’s an equitability issue: owners could argue assessment translates into a benefit for the property, not for the owner itself and a multi-unit condo could be considered the same as an apartment. No one has joined Castner in his lawsuit. And Klinker said the next move in the case will be up to the judge.