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A resolution authorizing the Metropolitan Department of Law to compromise and settle the claims of Lonesome Ten Miles, LLC against the Metropolitan Government in the amount of $767,500, with $600,000 to be paid from the Metro Water Services budget, fund 47410 and $167,500 to be paid from the Judgments and Losses Fund.
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WHEREAS, Lonesome Ten Miles, LLC filed a lawsuit in the United States District Court for the Middle District of Tennessee, which remains pending against the Metropolitan Government, alleging an unlawful exaction of private property arising out of a requirement to upgrade a public water line in 2024; and,
WHEREAS, after investigation, the Metropolitan Department of Law believes that the resolution listed in Section 1 is fair and reasonable and in the best interest of the Metropolitan Government and recommends that any and all claims or causes of action brought or that could have been brought by Lonesome Ten Miles, LLC related to the events detailed above be compromised and settled for $767,500, with $600,000 to be paid from the Metro Water Services budget, fund 47410 and $167,500 to be paid from the Judgments and Losses Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: The Metropolitan Department of Law is authorized to compromise and settle the claims of Lonesome Ten Miles, LLC against the Metropolitan Government in the amount of $767,500, with $600,000 to be paid from the Metro Water Services budget, fund 47410 and $167,500 to be paid from the Judgments and Losses Fund.
Section 2: This resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
In 2022, Lonesome Ten Miles, LLC, (“Lonesome”) undertook the renovation of a bar on Division Street which required Lonesome to file a water and sewer availability application with the Metropolitan Department of Water and Sewerage Services (“MWS”). MWS reviews these applications to determine how much domestic water flow-drinking water, dishwashing, restrooms, etc.-is needed for the applicant’s development. If an applicant requires more than 3,500 gallons per day (“gpd”), an additional fire flow analysis is required. MWS determined that the applicant would require 4,980 gpd, thus triggering a fire flow analysis. Lonesome did not indicate a need for fire flow in its application, so MWS used the default standard to determine fire flow supplied in the Metro Fire Code. The minimum fire flow required for the building Lonesome renovated is 1,500 gpd.
MWS determined that the existing 6-inch water line was insufficient to deliver the additional fire flow and notified Lonesome, in August 2022, that additional offsite water improvements would be required. Lonesome did not begin the work promptly, its application lapsed, and a new application was filed in September 2023. MWS again notified Lonesome that it would need to make the offsite water improvements but added that they would need to specifically replace 350 feet of 6-inch water line with 8-inch piping along Division Street.
Lonesome did not question or contest the domestic water flow, fire flow, or offsite water improvement determinations by MWS with either MWS or the Fire Marshal. Lonesome upgraded the water line, finishing the project in December 2024 at a cost of $700,000. Subsequently, the Fire Marshal indicated that the project would only need a fire flow of 1,000 gpd to operate the sprinkler system and thus the 6-inch water line would have been sufficient.
The lack of adequate communication between MWS and Lonesome led to mistaken assumptions about the need for the upgraded water line. Lonesome has filed a takings claim alleging that MWS unconstitutionally required it to pay for the water line in order to receive a building permit. The parties participated in a mediation to negotiate a settlement, but it was unsuccessful.
The Metropolitan Council approved an offer of judgment worth $345,000 through Resolution No. RS2025-1402. However, that offer was rejected.
The Department of Law recommends settlement of Lonesome’s takings claim for $767,500. The settlement reflects the private mediator’s proposal.
Fiscal Note: The total settlement amount is $767,500; of which $600,000 is to be paid from the Metro Water Services Budget and $167,500 from the Judgments and Losses Fund. This would be the 2nd payment, after approval by Metropolitan Council, from the Judgment and Losses Fund in FY26 for a cumulative total of $237,500. The fund balance would be $18,769,606 after these payments.