NORTH MANKATO — With talk of lawsuits by supporters and opponents of the proposed Marigold apartment complex in the Belgrade Avenue business district, it was a bad night for the North Mankato City Council to be without its attorney.

The city council is being asked to approve several variances to move the $10 million project forward on a long-vacant lot the city has been trying to develop for 20 years. But homeowners in an adjacent neighborhood strongly oppose the four-story, 58-unit apartment complex and say state law doesn't permit the council to grant the variances.

Supporters say the law is ambiguous and that the project will bring needed vitality to a lagging business district.

After hearing comments from both sides, Councilman Bob Freyberg made a motion to delay any action until the March 4 meeting when City Attorney Mike Kennedy will be on hand.

"The developer has indicated there will be litigation if we do not grant the variances," Freyberg said, noting that homeowners have hinted they might file suit if the variances are approved. "... I don't see how we can vote on this tonight -- with pending litigation -- without our attorney present."

Councilmen Billy Steiner and Kim Spears agreed.

"We definitely need legal advice," Spears said.

Freyberg's motion to table the matter passed 4-0 with Councilwoman Diane Norland, a project supporter, abstaining.

"This is all smoke-screen, all smoke-screen," Norland said.

The legal status of variances has been somewhat murky in recent years with a Minnesota Supreme Court decision greatly reducing cities' ability to make exceptions to rules regarding setbacks and other building standards in city code. The Minnesota Legislature rewrote variance laws to clarify when variances can be approved for a specific project, and those laws were at the heart of Tuesday's debate between opponents and supporters of the Marigold project.

Wheeler Avenue resident Barb Church, who believes the multi-story apartment complex would devalue adjoining middle-class homes and negatively impact the nature of the neighborhood, said state law clearly requires variances to be rejected if they change the essential character of the locality.

Tom Marks, another Wheeler resident, said the project would have to be reduced substantially in size and redesigned to fit in with the neighborhood.

"It's simply out of place with the character of that part of town," Marks said.

Developer Van Moody -- after seeing the city's Planning Commission and the Council reject variances for his original plan in December -- has cut the height from six stories to four and reduced the number of apartment units nearly in half to 58, which also dropped the estimated cost from $17 million to $10 million. But the smaller project still violates the city code in several ways.

A building of the size Moody wants to construct would require a lot of 93,500 square feet -- more than 30,000 square feet larger than the Marigold lot. Apartment buildings in that area are restricted to 12 units -- about 80 percent fewer than Moody is proposing. The width of the lot needs to be 1,200 feet rather than the 345 feet available.

The downsizing of the project has solved most -- but not all -- of the setback problems of the original plan.

The Planning Commission last week recommended approval of the variances, but Freyberg said commission members failed to lay out the factual basis for the variances -- something that would be crucial if the dispute ended up in court.

"There wasn't a finding of fact,"  Freyberg said. "There was a finding of opinion."

Norland said the concerns about litigation were overblown.

"Variances help with the flexibility of a city to do economic development work," she said. "... All this steam that there's going to be a lawsuit ... I consider that dirty pool."

Freyberg said he asked City Planner Mike Fischer earlier Tuesday if the developer had threatened legal action if the project was derailed and was told he had. At Tuesday night's meeting, Freyberg asked Fischer if the council has ever considered a variance while under threat of a lawsuit and Fischer said they hadn't.

"That's not smoke and mirrors," Freyberg told Norland, referring to his suggestion that the council needed legal advice before acting. "That's CYA."

After the meeting, Fischer said Kennedy was absent because he'd undergone a medical procedure earlier Tuesday. Kennedy specifically scheduled the appointment for after the third Monday of the month so he wouldn't miss the council meeting -- forgetting that the Presidents Day holiday had pushed the meeting back a day.