The Walnut Beach Association has agreed to a settlement that will allow construction of the final two buildings at Beach Shore Village, 30 East Broadway. The settlement resolves a dispute lasting nearly two years.

At its Oct. 17 meeting, the Planning and Zoning Board unanimously agreed to the proposed settlement agreement, which was then approved by Superior Court Judge Arthur Hiller.

As part of the approval process, the board unanimously approved a text regulation amendment, and a special permit and site plan to allow construction of two four-unit residential buildings.

Attorney Thomas Lynch said the Oct. 17 application was a result of negotiations with neighboring business owners, who filed the appeal in conjunction with the Walnut Beach Association.

Lynch said due to changes in flood elevation maps, the proposed building on East Broadway would be in the flood zone, and a commercial building could not be built because the first floor would be below the flood elevation.

Instead, this building, which was originally intended to have four units of commercial space, will have four units of residential space. The units will be constructed above first-level garages with breakaway walls.

Lynch said the neighbors were concerned about how a change to having all residential at the proposed building on Naugatuck Avenue would affect the ongoing viability of the area by not encouraging businesses to come to the area. The Naugatuck Avenue building is located outside the flood zone.

In 2015, the board approved a building on Naugatuck Avenue that would have four units of residential use, instead of the original approval calling for five units of commercial space. The 2017 agreement will have 3,200 square feet of commercial space on the first floor and four residential units on the second floor, said Lynch.

At issue was the board’s regulation that requires 20% commercial space in mixed-use buildings located in the Corridor Design District 2 (CDD-2) zone. In the regulation change submitted by Lynch and approved by the board in 2015, the board would determine the percentage of commercial and residential uses on a site.

The Walnut Beach Association and 12 neighboring business and property owners filed an appeal of that change and Hiller issued a Sept. 16, 2016 decision in which he wrote that the regulation change adopted by the P&Z was “vague and meaningless,” commenting that the lack of guidelines amounted to an arbitrary standard.

Lynch said he filed an appeal of Hiller’s decision to the Appellate Court, an appeal that ends with the settlement.

The revision to Article III, Section 3.17.2.16 changes the 20% requirement to 5.5% if a property in the CDD-2 zone meets the following conditions, which only apply to the Beach Shore Village parcel: “In case of a lot that is wholly or partially in the AE-12 flood zone and containing four or more acres, the total gross floor area devoted to commercial use shall be 5.5% and the remaining use shall be residential.”

The existing Paragraph (4) states, “At least 20% of the total gross floor area of the buildings in a mixed-residential use shall contain one or more of the following uses:” and lists the permitted uses of that 20% commercial, which could include certain types of stores, eating places, sale of alcoholic liquor, offices, or art galleries.

The revision changes the introductory sentence to read, “The balance of the total gross floor area of buildings in a mixed-residential use shall contain one or more of the following uses:”. This list of uses would remain the same.

While the proposal was not a public hearing, the board opened the discussion to public comment. Among the 10 people in attendance, William Schule of 22 Beach Shore Drive, was the only homeowner who spoke.

Schule said he is the president of the Beach Shore Village Condominium Association, and said the association was in favor of the settlement, saying, “We would like to see this project completed…so we no longer have construction.”

Attorney Danielle Bercury, representing the Walnut Beach Association, said the appeal was motivated by the desire to “try to keep more commercial in this area.” With the court decision, followed by extensive discussion, “We are able to come to a resolution,” noting, “I think everybody is excited to see these things built.”

Board Vice Chairman Jim Quish commented on the decision by saying he thought it was a good compromise and it was good the two sides were able to negotiate a settlement.

“This will be a benefit to the whole area,” said Quish.