Those questioning Charleston's permission for DeReef Park to be developed into 33 homes have won a small victory, as the National Park Service says it wants to take a fresh look at how the city should compensate for the lost park space.

It's the most recent development in a federal lawsuit brought by Cannonborough-Elliottborough residents unhappy with their neighborhood's change.

U.S. District Judge David Norton is expected to decide what happens next.

Heather Templeton, a nearby resident active in Friends of DeReef Park, the nonprofit that filed the suit, said she is optimistic that there will be a renewed effort to find more park space in her neighborhood.

"I'm just glad the Park Service recognized there was a mistake and they're willing to review their original conversion approval," she said, "so I'm excited about it."

No preordained outcome

The saga began in 2003, when City Council agreed to let DeReef Park and a large undeveloped tract on the opposite side of Morris Street be redeveloped into a dense mix of new homes and a few smaller urban parks.

The development south of Morris Street was built first. As the second phase, known as the Gathering at Morris Square, geared up, the city discovered a new issue with DeReef Park - an almost acre-sized park built in 1981 with a federal grant.

As part of that grant, the city agreed to place a covenant on the property that prevented any future use there other than recreation.

The city originally thought that covenant could be transferred to the site's newly created park spaces - including a park that's about a third of an acre in The Gathering - but it later realized that the city would need to convert that covenant to another park site.

In the fall of 2008, the city, state and federal government all agreed that Gadsdenboro Park - currently being built about a mile away between Concord and Washington streets - would be the replacement park.

Last December, however, the Friends of DeReef Park filed a federal lawsuit questioning the legality of how that was handled - and whether the public was sufficiently involved.

In May, the National Park Service filed its answer, saying it could find no records of any environmental assessment behind the conversion. Its filing asked the judge to reopen it for "additional environmental and historical and cultural resource evaluations."

"No outcome will be preordained by this reconsideration," which is expected to take six months, the Park Service's filing said.

The city also filed an answer saying it did not object to the Park Service's reopening the conversion, provided that its 2008 approval remain in place to lessen any disruption. "The city is the least culpable defendant in this case, yet it has the most to lose," its filing said.

Because of the pending lawsuit, city officials declined comment for this story.

Work well underway

It's probably highly unlikely that DeReef Park will be rebuilt at its former site.

Today, about 11 homes are in some stage of construction, and a curving DeReef Court also has been built. The road, like the park, is named for successful pair of black brothers who lived nearby in the 19th century.

Chris Phillips of The Gathering at Morris Square LLC development group said he is "vaguely familiar" with the lawsuit, but neither he nor any other private parties associated with the project are listed as defendants.

"I think it speaks volumes that we have not been named a party to this lawsuit," he said. "We're moving forward," and the scheduled calls for opening the new park, which is approximately a third of an acre, by year's end.

The uncertainty over the lawsuit has not affected sales. "There's no concern from our standpoint," Phillips said. "I'm sure the city will do ultimately what it needs to do to clear the situation up."

The city's legal filing said the law and facts support the city's position.

"Since the conversion was approved, and in reliance on it, both the city and a private property owner have inalterably changed their positions and have incurred substantial financial obligations," it said. "And, each has acted in good faith."

But the Friends' lawsuit claims the city and Park Service failed to follow proper procedures for deciding on a replacement park and that failure hampered the public's input - both as far as its historical and environmental aspects.

It's not just the park space that is causing concern. Cator Sparks, president of the Cannonborough-Elliotborough Neighborhood Association, said the Praise House's original wood is piled next to the structure, and its interior has been gutted and replaced with new construction. "This is very disappointing from a preservation standpoint," he said.

Gwenevere Smith, supervisory outdoor recreation planner in the National Park Service's Southeast Regional Office, said in a filing that if the judge lets the agency redo its process, the agency "will ensure that there is notice and opportunity for public, local and community involvement."

Templeton said she could walk around the block to DeReef Park, and she wants to see a solution that would add more green space nearby.

"We're sorely lacking it," she said. "We have been for a while. ... We hope city officials will look with us in finding a solution."

Reach Robert Behre at 937-5771.