AGENDA CAPTION:
Title
Consider approval of Resolution 2024-32R, approving the terms of a settlement agreement to resolve all claims in the pending litigation styled “SM Block 21, LLC v. City of San Marcos”, Case No. 23-0339, in the 207th Judicial District Court of Hays County, Texas; authorizing the City Manager, or her designee, to sign the settlement agreement on behalf of the city; and declaring an effective date.
Body
Meeting date: March 5, 2024
Department: Legal
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Funds Required: None
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Background Information:
In connection with the company’s purchase of Lots 4 and 5, Block 21, Original Town of San Marcos, SM Block 21, LLC filed a lawsuit against the City of San Marcos claiming to own marketable title to an area adjacent to said lots, believed by the City to be a public alley.
In essence, SM Block 21, LLC asserts that area was not reserved as a public alley and was vacated by the city in 1973. Ambiguities in conveyance instruments going back several decades would make it difficult for the city to conclusively establish title to the area if the city were to pursue litigation on the merits to conclusion.
Costs of litigation, including attorneys’ fees and court costs could also be substantial. In addition, city staff has not identified any essential current or future need for use of the area for utility or other city infrastructure.
Under the terms of the agreement, SM Block 21 will pay the city $45,000 in exchange for the city’s release of all claims to the area in dispute. Upon execution of the agreement, the lawsuit will be dismissed and the property deeded without any warranty from the City.
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Recommendation:
Staff recommends the approval of this item.