Developers aiming to build townhomes and apartments on South 17th Street are taking their case to the Wilmington City Council.

Madison Capital Group is appealing a decision by the Wilmington Planning Commission denying the rezoning request that would have allowed them to put 183 apartments (rendering shown below) in two, three-story buildings along South 17th and Peel streets and 26 townhomes along Hollingsworth Drive.

A Lidl grocery store-anchored development was previously planned on the site, but the property owner, Texas-based development firm Leon Capital Group, filed a lawsuit in June against Lidl after the German discount grocer terminated its purchase and sale agreement (PSA) for the South 17th Street project in Wilmington. The case also involves two other proposed Lidl developments -- one in Cary and one in Charlotte -- and is pending.

Cindee Wolf of Design Solutions, who is representing Charlotte-based Madison Capital Group for the multi-family development proposal at the site, said she filed the appeal of the planning panel's decision with the city Thursday morning. The planning commission at a meeting Wednesday unanimously denied the group's request for conditional district rezoning from Community Business (Conditional District) to Multi-family Medium-High Density (Conditional District).

An applicant has 10 days to appeal an unfavorable planning commission decision, according to the city's website. Wolf said the appeal is expected to be part of the Sept. 4 agenda of the Wilmington City Council.

"The statements that were made [at the Wednesday meeting] were that we thought that was a good spot for commercial, that we felt the intention when 17th Street was extended was for that to be commercial," said Deb Hays, chairwoman of the Wilmington Planning Commission, on Thursday.

She added, "I felt like the Comprehensive Plan wanted to see more of a mixed-use in that area and that was the reason I was voting for denial."

The Wilmington City Council's votes in cases of appeals don't always coincide with those of the planning commission.

A report by the city staff produced for the planning commission meeting recommended approval of the project, located at 4301 and 4355 S. 17th St. and dubbed Arbor Commons Apartments, with conditions.

"The proposal will place future residents in close proximity to existing services, while enhancing the horizontal mix of uses. The proposed project is complementary to the established development pattern in the area and provides an appropriate transition to the adjacent residential single-family dwellings and assisted living facility," the report said. "The comprehensive plan calls for new development to enhance the desired character of the surrounding area, improve access to goods, services, and amenities, increase housing options, and improve the overall quality of life and character of the area.

"The amendment is consistent with many of the policies of the Create Wilmington Comprehensive Plan and the city’s Adopted Focus Areas and; staff believes the request is reasonable and in the public interest and recommends conditional approval."

Meanwhile, the lawsuit involving the previous plans for a Lidl on the site are ongoing. In July, attorneys for Lidl filed a motion to dismiss defendants Lidl US LLC, Lidl US Operations LLC and Lidl Management Inc. from the Leon Capital Group lawsuit, stating, "Each agreement provided Lidl US Operations with certain rights to terminate the agreement prior to closing."

Leon Capital Group filed an amended complaint July 23. Their complaint, which the defendants deny, says, "Lidl’s fraudulent conduct has caused Leon to be deprived of significant economic opportunities, rents, and profits in relation to the Developments; has caused a diminution in fair market value of the Properties; and will force Leon to remarket the Cary Development and Wilmington Development."