A property development company has filed a lawsuit against the Town of Greeneville and its Municipal Planning Commission, alleging officials improperly halted a major residential subdivision after years of approvals and substantial investment.
Land Star Development filed a petition in Greene County Chancery Court earlier this month, seeking judicial review of two recent decisions by the Greeneville Municipal Planning Commission. According to the suit, those actions abruptly stopped a 200-plus-home development that had received multiple approvals over nearly five years.
The proposed neighborhood was slated for a 106-acre site off Whitehouse Road, near the Greeneville Municipal Airport.
In court filings, Land Star claims the commission’s sudden reversal-after years of planning and collaboration-was “illegal, arbitrary, and capricious.” The suit contends that the project met all zoning, engineering, and environmental requirements, and had been approved through several public hearing and planning stages since 2021. The company also says various agencies, including utilities and emergency services, had confirmed their ability to support the new neighborhood.
According to the legal filing, the project’s origins date back to 2021, when the Greeneville City Council rezoned the property from low-density residential to B-4 (arterial business), a classification that permits high-density residential use.
In 2022, Land Star purchased the property for $1.7 million. The company then requested that the land be annexed into the city limits-a recommendation endorsed by the Planning Commission and approved by the City Council in December 2022.
With zoning and annexation approvals secured, Land Star says it moved forward in good faith, investing heavily in site plans, environmental assessments, engineering work, and a development agreement with national homebuilder D.R. Horton.
But on March 11, 2025, the Planning Commission denied Land Star’s request for a mass grading permit that would have allowed initial site work to begin. The company argues the permit did not require commission approval in the first place. Then, less than a month later, on April 8, the commission voted to reject the development outright.
Land Star claims both decisions followed vocal opposition from a small group of nearby residents who warned that the housing project could generate noise complaints or potentially jeopardize the airport’s future. Philanthropist and airport advocate Scott Niswonger, said the subdivision’s location was a life-safety issue for both potential residents and airport users.
The suit argues that the commission’s actions were based not on legal or regulatory concerns, but on public pressure and speculation. It notes that while airport impacts were cited as a reason for denial, airport officials had previously affirmed there were no safety or regulatory issues with the plan. The suit also listed the multiple meetings at which the project had been discussed and all the different approvals it had received.
The company says it has already invested more than $2.4 million into the project, based on assurances from city leaders and a long record of approvals.
Land Star is asking the Chancery Court to reverse the Planning Commission’s March and April decisions, allowing the project to proceed.
