The town of Chesterton and a developer have become more entrenched in their standoff over who is to blame for flooding in the Easton Park subdivision this past summer.
Olson Farm LLC, along with its creator ATG Real Estate Development LLC, recently filed a lawsuit in Porter Superior Court against the town of Chesterton, the town’s engineering staff and Storm Water Management Board.
Associate Town Attorney Charles Parkinson, who attends the Storm Water Board meetings, said the town hasn’t yet prepared a legal response to the suit.
The lawsuit demands the removal of a stop-work order against Olson Farm LLC, which has been in place since July 30; declare void the Sept. 21 findings against the developer by the town’s Storm Water Management Board; vacate the $7,250 in fines; and award damages along with attorney fees.
“As a direct and proximate result of the town’s actions, plaintiffs have suffered, and continue to suffer, damages in excess of millions of dollars,” the suit claims. “Following the flooding events, rather than acknowledging its own failures, the town publicly blamed the plaintiffs and commenced a series of escalating punitive enforcement.”
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Assistant Town Engineer Matt Gavelek announced at Monday’s Storm Water Management Board meeting that the town has found 65 more violations, which would amount to an additional $16,250 in fines. He said he would work with the town attorney on issuing those fines.
ATG Real Estate Development has been involved in the development of the Easton Park subdivision for about 20 years. The town annexed the 133.197 acres off County Road 250 E, and a plan was approved that called for the construction of 360 single-family units to be built in phases.
During the Aug. 17 hearing before the town’s Storm Water Management Board, evidence was presented that a large tract of land was excavated against the town’s advice, resulting in the soil being unstable. As a result, with the heavier-than-normal rainfall this past summer, sediment-laden runoff flooded parts of the subdivision.
In their lawsuit, the developer outlines why they believe the town is responsible for the flooding.
The developer states that the town had the final say on issuing occupancy permits and should have known that some houses were built below the mandated elevation grade. ATG Real Estate Development sold the land and contracted with a third-party contractor to build houses within the Easton Park subdivision.
“The town’s issuance of occupancy permits for non-conforming homes was a failure of the town’s mandatory inspection and enforcement responsibilities,” the suit says.
The developer also blames the town for failing to obtain written consent from the Porter County Drainage Board to use a culvert and Kemper Ditch for the subdivision.
At the Aug. 17 hearing, Eric Gastevich of ATG Real Estate Development said the flooding problems were created by the blockage of the nearby Kemper Ditch and a culvert. He stated that conditions should improve because both the ditch and culvert had been cleared days before the hearing.
The town countered that the culvert and ditch were under the county’s jurisdiction.
The developer accuses Chesterton officials of depriving them of a fair and impartial hearing on Aug. 17 due to a “prejudicial environment.”
“The hearing was contentious and conducted in a hostile atmosphere directed at plaintiffs, which was the direct and foreseeable result of the town’s pre-hearing social media campaign,” the suit said.
Chesterton violated its own town code by not issuing its findings and fines within 30 days after the Aug. 17 hearing, the suit claims. As a result, the findings and fines should be nullified, the suit asks.
While the lawsuit seeks damages, it also acknowledges that the ability of the plaintiff to recover money may be barred or limited by Chesterton’s governmental immunity.
As a result, the developer asks for a permanent injunction that lifts the stop-work order.
“Each day the stop work order remains in effect compounds the harm to plaintiffs. The town’s social media campaign has further compounded the irreparable harm by damaging plaintiffs’ reputation in the community and poisoning the public perception of the development,” the suit said.
Meanwhile, Easton Park residents look on with concern.
James B. Fetzer, representing the Easton Park Neighborhood Coalition, on Monday thanked the Storm Water Management Board for taking action against the developer with the stop-work order, fines and requiring remediation before work resumes.
Fetzer said he believes that, in the recent lawsuit, the developer has admitted construction defects that some homes were built below the mandated elevation.
A concern for residents is that on Jan. 31, 2027, under the contract for homes already built, the stormwater infrastructure liability transfers from the developer to the homeowners, Fetzer said.
“We are staring down the barrel of massive municipal tax liens to fix a civil engineering failure that the developer has now admitted to under oath,” Fetzer said.
Fetzer said another concern is that with winter approaching, unmitigated runoff would freeze into solid ice dams that could pose a danger to properties.
Storm Water Board member Victoria Wittig thanked Fetzer, but said that town officials couldn’t comment because of the pending lawsuit.
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Jim Woods is a freelance reporter for the Post-Tribune.