East Lyme ― A controversial affordable housing development off Holmes Road was denied by the Zoning Commission on Thursday but the players involved show no sign of going away.

Attorney Paul Geraghty, representing applicant and professional engineer Kristen Clarke, said after the meeting he would review the decision.

“But I am sure we’re going to appeal,” he said.

The six-member Zoning Commission voted unanimously to deny the proposal for 19 houses and 24 townhouse units in the woods near the Montville border. They based the decision on the “substantial” risk to public health and safety concerns that “clearly outweigh” the need for affordable housing. The legal language echoes concerns from neighbors who worried there isn’t enough water in the area to fight fires and not enough room on the roads for trucks and ambulances.

Residents at two public hearings also argued the rural site doesn’t align with the purpose of affordable housing, which they said is to provide a place where people in the lowest income brackets can live with easy access to public transportation, jobs and services.

The commission’s denial included 20 reasons outlined over five pages in legalese produced by the commission’s attorney, plus a simpler statement from one commission member that “this is the wrong location for this type of development.”

The plan was submitted earlier this year by Clarke for the property owners, South Carolina-based Duval Partners LLC, under the state statute known as 8-30g. The affordable housing mechanism requires developers to set aside at least 30% of the units at affordable rates in exchange for legal benefits that make it easier for them to sue the town if their proposal is rejected.

Geraghty said an appeal would center on local zoning regulations that allow an applicant pitching an affordable housing development to submit a “preliminary” site plan that doesn’t require the level of detail in a traditional site plan.

Regulations for affordable housing districts in town require applicants who choose the “preliminary” route to provide information related to environmental concerns, the process for ensuring at least 30% of the units are sold or rented at affordable rates, and a list of permits and approvals that will be needed – but it does not require those permits and approvals up front.

“What they’re saying is they want all of that now, at the conceptual stage, which I think is in violation of their regulations,” Geraghty said.

He pointed to case law – including an expensive precedent set over decades of litigation in East Lyme with developer Glenn Russo’s plan to build more than 800 apartments in the Oswegatchie Hills – affirming the validity of conceptual site plans.

But the commission’s decision states Clarke didn’t even provide the minimum amount of information required in the regulation, including a certified traffic report and the documents necessary to guarantee the units will remain affordable for at least 40 years.

Resident Heather Longo Racicot of Holmes Road was holding up a sign during deliberations that said “Please vote no.” Afterward she said the commission “made the right decision for the farmland,” adding that she hopes the town will work to find places for affordable housing that are more feasible and meet the needs of lower-income households.

She acknowledged the likelihood that the applicant would sue the commission over the denial.

“I think it’s going to be a long-term fight, but the neighborhood and those of us living in that end of town are here for the long haul,” she said.

Some critics of the application have called its intent into question, arguing the conceptual site plan can be used as a way to drive up the value of the land because property approved for a large development is worth more than land limited to a few houses.

‘Just watching’

Geraghty after the meeting sat with Jeff Torrance, a developer prohibited from doing business in the town under the terms of a 2015 settlement agreement. The agreement, which came with a $650,000 payoff by the town to Torrance and his partners, was a move to end more than a decade of litigation over development around Darrow Pond that by then had cost the town more than a half-million dollars.

Torrance is the father of Clarke, the professional engineer who submitted the affordable housing application. The settlement agreement specifically allows her to engage in the kind of development dealings that her father is barred from.

Torrance said he was at the meeting in his capacity as a member of the East Lyme Land Trust. He also spoke before the commission last month at a public hearing on the proposal.

The developer has been described by land trust president Ron Luich as an adviser who knows the regulations and what must be done to comply with them.

“I’m just watching,” Torrance said Thursday of his presence at the meeting.

The land trust last year purchased 301 acres from Duval Partners for $1.6 million to create its Nehantic Nature Preserve. A $560,000 grant from the state Department of Energy and Environmental Protection was used toward the purchase.

Torrance said his role in the land trust includes working with DEEP to secure conservation easements on some of its properties, including the Nehantic Nature Preserve and 120 acres near Lake Pattagansett known as the Hathaway property.

The land trust is currently the subject of an inquiry by the state Office of the Attorney General related to the Hathaway property. The inquiry was opened after complaints that the cash-strapped land trust was using land it owns in the middle of the Oswegatchie Hills Nature preserve as collateral for its $2.3 million mortgage on the Hathaway property.

The land trust purchased the Hathaway property last fall with the intent of selling it to the town. Those negotiations are ongoing.

Open space advocates fear the land trust will have to sell off the Oswegatchie Hills parcel to avoid foreclosure if the town doesn’t purchase the Hathaway property.

Clarke is also involved with entities related to the Hathaway property, according to land records.

Steve Harney, a former resident and Board of Finance chairman, has been a spokesman for the Hathaway dealings. The mortgage on the property is held by a Delaware-based entity he has said belongs to his wife and children.

He has also identified himself as a consultant for the Holmes Road affordable housing proposal.

Harney has described a business model where investors sell off large chunks of land to environmental groups for the tax benefits, while “carving out” parcels to be developed for financial gain.

Torrance told The Day last month he has “zero” financial interest in any of the properties carved out of the land trust properties.

e.regan@theday.com