Palm Coast City Council Approves $17M Land Purchase Settlement to Resolve Water Lawsuit

PALM COAST, FL — The Palm Coast City Council voted 4-1 during a special session Thursday afternoon to approve a comprehensive $17 million settlement agreement to purchase 259 undeveloped acres in the Town Center development district, bringing an end to contentious litigation with private developers.

Settlement Terms and Utility Capacity Resolution

The approved agreement resolves a lawsuit filed by Town Center commercial property owners alleging that the municipal utility had improperly restricted water and wastewater capacity allocations for previously approved commercial phases. Under the settlement terms, the City of Palm Coast will acquire the fee-simple title to 259 acres of strategic parcels at $65,600 per acre, funded through a combination of utility reserve funds and short-term capital improvement revenue bonds.

City Manager and municipal planners noted that direct municipal ownership allows Palm Coast to master-plan the parcels for civic medical facilities, public parkland, and high-wage commercial office hubs.

Public Testimony and Fiscal Scrutiny

During extensive public comment, local business leaders supported the settlement as a necessary step to eliminate lingering legal liabilities that threatened municipal bond ratings.

Dissenting Council members questioned the debt service schedule, advocating instead for continued court litigation to challenge developer capacity claims.

Closing and Master Planning Schedule

Property closing is scheduled for September 30, 2026, with public master-planning workshops for the 259-acre Town Center tract launching in November.