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This case has me pretty riled up. Here you have a situation where the City is bending over backwards to allow this church to build here by suspending the 1-year limit on Conditional Uses to allow them time to raise the money they need Yet the Church is still suing the City. My guess is either:
1) The Church feels that it may fail to raise the money and they want the Institutional Zoning so they can turn around and sell it, should their plans fall through.
2) The Church needs more money, so they figure that if they sue the City they can get money that way. Plus the publicity generated from this story may propmt people to give $$ to the Church.
On top of all of that, you have these neighbors who buy into this idea that this area is zoned residential and will probably only have single-family homes on it. Now they may have this huge Church in their backyard.
Another thing that gets me going on these churches is the fact that they can run these day care centers or senior housing facilities and make a ton of money off of them, yet pay NO taxes.