CAPE ELIZABETH — The Town Council will hold a public hearing next month on a proposed $500,000 settlement that would require the town to vacate its rights to a so-called paper street known as Surfside Avenue.

The Sept. 10 public hearing is likely to produce input from residents on both sides of the dispute. More than 1,400 residents have signed a petition asking the council to protect the public’s right to use the Shore Acres pathway, and the possibility of it being developed for public access.

Complying with the petition would require the council to reject the settlement. Councilors plans to hold a special meeting to vote on the proposal no later than Oct. 10, Chairwoman Jessica Sullivan said at a council meeting Monday. 

Paper streets are roads that were laid out in subdivisions, but never built or accepted by the town. Last November, rather than permanently accept or vacate rights to paper streets shown in a 1911 development plan of the Shore Acres subdivision, the council opted to maintain the rights, which were extended 20 years on Oct. 5, 2016.

Town officials reached the settlement in a July 19 mediated session with residents who sued the town in January and claimed ownership of the undeveloped portion of Surfside Avenue that runs along the coast between Pilot Point Road and Algonquin Road. 

The lawsuit was filed by plaintiffs Imad and Hulda Khalidi, David and Kara Leopold, Andrew Sommer and Susan Ross, Stewart and Julie Wooden, and Rock Dam Development LLC, all of whom own property on Pilot Point Road.

Under the proposed settlement, the town would vacate any claim to the 800-foot strip of land. In return, the residents would pay $500,000 to the town’s Land Acquisition Fund, drop the lawsuit, assume ownership of the land and pay taxes on it.

Town Attorney Durward Parkinson on Monday told councilors the settlement would help the town avoid “costly and protractive litigation.”

He noted it is still unclear whether a pathway could feasibly be built on the paper street, and added that he’d expect an attempt to install a path would be challenged in court. 

“What you do get (in mediation) is certainty and closure and management of a big risk,” Parkinson said. “This is a big risk for the town, where the town could spend hundreds of thousands of dollars and end up in a worse position.”

Parkinson, Sullivan, Councilors Jamie Garvin and Sara Lennon and Town Manager Matthew Sturgis participated in the mediation. 

The deal would require abutters to ensure that residents of Shore Acres would continue to have the right to use the path. 

“Deeded rights are very strong rights in their deed that says they have access over Surfside Avenue. That’s not really in play,” Parkinson said. “What’s more of a gray area is the implied rights. … That’s what this language was intended to address for sure.”

As it stands, the public does not have any right to access the land, only incipient – or as Parkinson classified them, “yet-to-be-born rights” – should the town accept the paper street. 

If litigation continues, Parkinson said he anticipates it would take several years. He compared it to a similar ongoing legal dispute between the town of Kennebunkport and beachfront property owners over access to Goose Rocks Beach, which dates to a lawsuit filed in 2009.

Sullivan stressed that the council’s unanimous vote to send the proposed settlement to a public hearing next month is in no way an indication of each councilor’s approval or disapproval of the proposal. 

“This is all still very fluid,” Sullivan said. “No agreement has taken place yet.”

Sullivan has long stated her support for permanently accepting Surfside Avenue as a public way and said Monday she opposes the proposed settlement.

“I do feel there are principles worth fighting for,” she said. 

The 10 residents who addressed the council during public comment period also expressed disapproval. 

Many felt more should be added to the proposal to protect the rights of subdivision residents to access Surfside Avenue. Some said $500,000 in return for the town vacating its rights to the pathway is too little and should be renegotiated.

Paul Moson, of 22 Trundy Road, who helped collect petition signatures, said he hopes the council thinks about what the “majority of Cape Elizabeth citizens want.”

Others agreed, saying that approving this proposal would give the public the impression that the council could be threatened into working in the interest of a few financially resourceful residents, rather than in the interest of the general public.

Councilor Sara Lennon, however, said she feels “hurt” by those claims, and believes the settlement is a “very responsible way to manage considerable risk.”

“Contrary to what appears to be popular belief, we were not swayed by the money. That was the last consideration we cared about,” Lennon said. “… Our job here is to manage risk. … It’s our job not to waste tax money and more importantly not to take huge risks with it. … We are not being threatened. We are trying to apply our very best judgment with a complex set of facts and some unknowns in the future.”

Jocelyn Van Saun can be reached at 781-3661, ext. 183 or [email protected]. Follow her on Twitter @JocelynVanSaun.

The Cape Elizabeth Town Council will hold a public hearing Sept. 10 on a proposed $500,000 settlement between the town and Pilot Point Road residents that would require the town to vacate rights it has to the paper street on Surfside Avenue. The partially developed shoreland path runs along the northern shore of Broad Cove.