Related articles:

Town is the culprit in sewage problems 74% sewer-fee hike eyed for 4,000

Other articles by Tim Ellis:

Surfing on the Wi-Fi wave Biz licenses, permit fees going up Sahuarita's wish: more spots to shop Sahuarita's wish: more shopping Senior homes could face legal action Making Sahuarita homes affordable Sahuarita's crime-fighting windfall Sahuarita councilman seeks to launch affordable-housing programCarroll: State, feds tie locals' hands on water Town wants role in water efforts

Mechanical
Loftin Equipment Co
Generator Field Technicians Construction
GES Construction
Carpenters/Foreman Sales and Marketing
Electric Supply, Inc
Outside Sales Trades/Construction
CIMETTA ENGINEERING
WELDERS Administrative & Professional
ADMIN ASST
JEWISH FEDERATION OF SO AZ General
Wasatch Property Management
Maintenance Tech Trades/Construction
Oracle Controls
HVAC Service Tech

Sahuarita officials have refused to pay more than $10 million to settle legal claims by the town's biggest developer, who said the town's sewer problems have cost his company more than $20 million in lost profits.

Documents filed on behalf of Bob Sharpe, developer of Rancho Sahuarita, say the developer may sue over the town's failure to provide sewer service for new commercial and residential projects.

That failure may have "substantially diminished the value of Sharpe's investment," according to Sharpe's notice of claim, which outlines what financial losses he has suffered, and will suffer, because of the sewer-system problems and states an intention to sue unless a settlement is reached.

Sharpe declined to comment Friday, and his attorney, Richard Rollman, did not return a telephone call.

Mayor Lynne Skelton said Friday that she cannot comment because the matter may end up in court.

Dan Hochuli, the town's attorney, also could not say much, because of the potential lawsuit. But he said Friday that town officials aren't going to settle because "we disagree with the claims."

"The town does not believe there is liability," he said. "The town intends to aggressively oppose any litigation."

Hochuli said the town has 60 days to respond to the claims, which were received on Sept. 25.

$10.4 million being sought

The claims, which seek settlements totaling $10.4 million, are intended to compensate Sharpe and an associate for losses he says he'll suffer because the town cannot connect any new homes or businesses to its sewer system until its wastewater-treatment plant is expanded.

The state slapped a moratorium on the town last summer because the plant had reached its capacity of 490,000 gallons per day. The town is now scrambling to complete an interim expansion project to boost daily capacity to 690,000 gallons. It's also designing a project to boost capacity to 1.5 million gallons per day.

Until that project is completed, the town is prohibited from approving new connections. That could go on for at least another two years, according to the notice of claim.

That will prevent Sharpe from fully developing a commercial complex now nearing completion. It also will limit future development and reduce the value of property in Rancho Sahuarita, because home buyers and investors may believe that the town's sewer utility is undependable, the notice states.

Those problems could cost Sharpe more than $20 million in lost business opportunities, according to the notice.

"These are very large amounts, and if there are no other alternatives, there will be litigation to recover these damages," according to the notice.

Sharpe's notice states that the town's failure to provide sewer service violates the terms of an agreement that he and town officials signed in February 2000, when Sharpe gave the plant and sewer system to the town.

The sewer-connection moratorium was caused by the town's failure to anticipate the need for expanding the plant in time to accommodate the rapid growth in Rancho Sahuarita, the notice states.

"The town is only now beginning to work on planning that should have been done years ago," it says.

The notice also says town officials misrepresented the plant's ability to accommodate that growth in "many conversations" since the 2000 sewer agreement. "On every occasion, the Town gave assurances that it knew what it was doing, was preparing appropriate plans for expansion of the treatment plant, and would be able to provide sewer service when needed."

Sharpe made the same accusation last month, when the sewer-connection moratorium threatened to delay the opening of Sharpe's grocery store-retail complex, which is nearing completion.

Town Council members settled that issue by agreeing to pay Sharpe up to $1.3 million to build a temporary septic system for the commercial complex.

Sharpe's lawyer — Rollman, who wrote the claim — suggests his client would prefer a similar outcome to resolve the claims.

"The preference remains to find alternatives that will avoid a financial burden to the Town and provide benefits to each side of this dispute," his notice says.

Hochuli said he regrets that the relationship between the town and Sharpe has deteriorated so badly.

"It's a shame that it's come to this, because the town and this developer are going to work together for many, many years, if not decades," he said.