SAFETY HARBOR, Florida - The Safety Harbor City Commission has approved a settlement agreement with a property owner who filed a federal discrimination claim after she was denied approval to operate a group home.

The woman, Bonnie Jo Hill, will receive $400,000, but cannot sue the city. In addition, the city has also approved the property for conditional use, allowing her to operate the group home.

Dozens of homeowners who live in the Harbor Woods Village neighborhood, where that home is, showed up to Wednesday night's commission meeting to express their concern over the agreement.

"I'm just astounded that the city and its insurer would roll over to what I consider just a blatant extortion attempt," said an upset resident.

Back in April 2011, the commission originally denied Hill's application to open up the group home, stating, in part, a potentially negative impact on property values. It sits less than 300 feet from another group home that already exists in the neighborhood along Harbor Woods Circle. According to state law, community residential homes are not allowed within 1,000 feet of each other. The owner needed city approval from the city's government to operate. After Hill was denied conditional use, she filed a federal housing discrimination complaint.

More than a year later, city officials said their lawyers recommended a settlement agreement to avoid the time, expense, inconvenience, and risk of litigation.

"We're very pleased that the city recognized the rights of these disabled young men and the rights of our client to open the home in the first place," said Hill's attorney, Richard Heiden.

According to the city officials, the city's insurance company is paying the settlement.

The group home is expected to be operating within 30-90 days, and will house mentally disabled young men.

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