Minneapolis is appealing a judge's decision awarding almost $523,000 to a spurned developer in a case in which it has already sunk more than $700,000 in outside attorney fees and related costs.

City Attorney Susan Segal disclosed Monday the city's decision to appeal a Hennepin County District Court decision that developer Bradley A. Hoyt was due the money for out-of-pocket and legal costs. Hoyt and his Continental Property Group sued the city in 2007 after it denied in 2004 his applications for a 21-story Loring Heights tower that exceeded zoning norms. He proposed a shorter tower but later withdrew that and sued the city.

The case attracted attention in part because Judge Stephen C. Aldrich ruled last year that Council Member Lisa Goodman improperly organized neighborhood opposition to Hoyt's 104-unit proposal and tried to sway fellow council members against it while she was supposed to keep a quasi-judicial neutrality.

Aldrich also ruled that the city was within its rights to deny Hoyt's proposal. He denied Hoyt's claim of $11 million in lost profits, calling it speculative.

The city has been represented by the law firm of Lockridge Grindal Nauen, which successfully argued that several of Hoyt's claims should be dismissed.

Segal said the city sought outside attorneys because its own lawyers were busy on other matters. She said the lawyer fee will be paid from the city's self-insurance fund. She said the amount spent must be balanced against Hoyt's original claim of more than $20 million.

Hoyt was scornful of the city's appeal, which he said he expected. "It's merely Charlie Nauen pounding the file to cost the taxpayers more money," he said, referring to the Lockridge lawyer involved in the case. Hoyt called the appeal a rehash of issues the city lost in the trial court.

Nauen responded, "We just have a number of serious legal issues, and that is why we appealed."

Hoyt said his attorney will also file an appeal, claiming in part that the city didn't produce documents, including e-mails, that it was required to produce in discovery.

The city argues in its appeal that Hoyt had no protectable property interest in city variances and permits for which he applied, that the city can't be held liable for Goodman's procedural violation if it didn't determine the outcome, and that Hoyt's claims are barred because he didn't own the property when he applied.

Steve Brandt • 612-673-4438