Neale Ave.

The property owner at 119 Neale Ave. will get to sell two transferable development rights according to the terms of a lawsuit settlement approved by Aspen City Council. The council in 2016 denied the same owner’s request to create three TDRs.

The city of Aspen has settled a lawsuit concerning the council’s denial of a $250,000 historic preservation benefit that a property owner claimed as an entitlement.

Jeffery Shoaf, who is behind the 119 Neale Avenue LLC entity that sued the city following a contentious 2016 no vote from city council, will get two-thirds of what he was seeking in transferable development rights, per the terms of the agreement approved at Monday’s council meeting.

He also agreed to tear down a shed on his property that the city contends Shoaf built without a permit.

The settlement also disposes another dispute between Shoaf and the city concerning his residential property at the top of Neale Avenue. The city believed that Shoaf’s single family home at 119 Neale Ave. was being used illegally as a duplex, after inspectors found evidence that the property was divided into two independent units. Shoaf was found not guilty in Aspen Municipal Court but the city was pursuing the allegation in a counterclaim filed to Shoaf’s lawsuit. Those claims will now be dropped.

The property remains classified as a single family home, but if the city believed a new set of facts had emerged indicating use as a duplex, it could still pursue the claims, assistant city attorney Andrea Bryan said. But the city can’t bring another case based on the previous allegations, she said.

The case involving the transferable development rights (TDRs) originates with a 2012 lot split, where an 1880s cabin that was on Shoaf’s property — located south, or downhill, of the home subject to the illegal duplex allegation — was renovated, protected with a historic designation and sold in 2013. As part of the lot split agreement, Shoaf accepted additional restrictions on what became the uphill property he retained, limiting the allowable density to one single family home when a lot of that size would normally support more. In exchange, based on the amount of development rights he was giving up, Shoaf would be entitled to three TDRs.

When he applied for the TDRs in 2016, the application ran into trouble based on the status of 119 Neale, which Shoaf had previously sought to have classified as duplex in 2015, opining to the council at that time that it was being functionally used as such anyway.

In the 2016 meeting, a council member identified in minutes as Adam Frisch said he was “as hot under the collar as the last time the applicant was here” and that Shoaf needed to “figure out his past transgressions before asking for more,” according to Shoaf’s lawsuit that claimed the council’s rejection of the triple TDR application was arbitrary and capricious.

The lawsuit that was pending for more than a year, with a mixed-bag ruling from the district court on the city’s motion to dismiss, before settlement negotiations produced the agreement ratified with no comment at Monday’s council meeting.

The city also was objecting to a shed at 119 Neale it said was built without appropriate approvals, which it noted in the counterclaim to Shoaf’s lawsuit. The settlement requires Shoaf apply for a demolition permit within 30 days and complete the work within 90 days from the date the permit is pulled.

TDRs involve unused potential floor area on a given lot and are the city’s way of essentially shifting development to more favorable areas. Property owners can buy them — they are typically in the $250,000 range for a 250-square-foot bonus — to expand residences.

Curtis Wackerle is the editor of Aspen Daily News. He can be reached at curtis@aspendailynews.com or on Twitter @CurtisWackerle.