The site of the replacement VA Medical Center in Louisville, next to the city of Crossgate and the intersection of Brownsboro Road and the Watterson Expressway

A federal lawsuit has been filed against the U.S. Department of Veterans Affairs by the city of Crossgate — the small city of 240 residents adjacent to the site of the VA’s proposed $1 billion replacement hospital. The city asserts that the agency violated federal law in its site-selection process and asked the court to prohibit it from beginning construction on the project.

Last October, the VA issued a final record of decision naming the Midlands greenfield property near the intersection of Brownsboro Road and the Watterson Expressway as the site of Louisville’s hospital to replace the Robley Rex VA Medical Center on Zorn Avenue.

That declaration ended what had been a decadelong process full of delays and extended deadlines, in addition to strong opposition to the Midlands site by neighbors in the area and some public officials, who argued that traffic was already too congested in the area and there were alternative properties that would be more appropriate.

The lawsuit filed in U.S. District Court last week by attorneys for Crossgate and its mayor Kirk Hilbrecht asserts that this record of decision and the final environmental impact statement for the site violated the process mandated under the National Environmental Policy Act (NEPA). The city is represented by attorneys Clay Barkley and Randal Strobo — who also worked for Crossgate toward the end of the VA’s selection process — as well as Tom Fitzgerald, who is widely regarded as the most prominent environmental attorney in Kentucky.

The city seeks a judgment declaring that the VA violated this federal law by not fully and adequately considering the environmental impacts of the development and other reasonable alternative sites, in addition to prejudicially committing resources to the acquisition of the Midlands property before the NEPA process had been completed.

Crossgate’s lawsuit also seeks an injunction by the court requiring the VA to now fully comply with the provisions of NEPA and prohibit the federal agency from appropriating any funds or taking any action toward the construction of the replacement medical facility until it has complied with those NEPA requirements.

A spokesman for VA Secretary David Shulkin told Insider Louisville that the agency does not typically comment on pending litigation. Civil complaints represent only the arguments of the plaintiffs.

The claims for relief in the lawsuit assert that the VA not only violated NEPA procedures by having its environmental impact statement fail to “adequately address the wide range of traffic, environmental, and socioeconomic problems associated with the site,” but that the entire site-selection process was inherently biased for the Midlands property and against alternative sites.

The lawsuit asserts that the VA’s purchase of the Midlands property before the NEPA environmental review process — which was criticized in a VA Inspector General report for an improper appraisal process that led to the VA overpaying by $3 million — “demonstrated an improper and unlawful bias” toward the selection of that site.

Due to what it calls the “sweetheart deal” with the property owner, and this purchase occurring “despite being years away from completing its obligations under NEPA,” the lawsuit states that “the entire NEPA process has been tainted.”

Another claim by the plaintiffs is that the VA failed to rigorously explore and objectively evaluate all reasonable alternative sites for a replacement hospital. Only two options besides the Midlands property were included in the NEPA process: The St. Joseph site in the northeast that was already purchased and slated for another development, and remaining in the current Robley Rex facility, which the VA had already ruled out as an option.

Noting that “the VA only considered one alternative” for a hospital site, the lawsuit states that “one alternative does not constitute a range of alternatives satisfying NEPA.”

In addition to its failure to consider any viable alternative sites in the NEPA process, the lawsuit states that the VA “unreasonably discarded all urban sites in favor of sites in more affluent areas” of the city, and thus “failed to consider any sites in urban communities, including socioeconomically depressed communities with available sites.” It goes on to assert that the VA also unreasonable failed to consider brownfield sites in downtown, west and south Louisville by arbitrarily limiting the size of eligible properties and ignoring the option of acquiring smaller adjoining tracts.

The lawsuit adds that no alternative sites were considered by the VA, “despite several parties coming forward with other reasonable alternative sites” during the process.

The University of Louisville had pushed for the VA to locate its new hospital downtown or purchase Jewish Hospital, while others had offered more rural property in south Louisville and Hardin County. Several elected officials and prominent residents, including businessman Gill Holland, urged the VA to consider much of the vacant and underutilized property in west Louisville, arguing that this would also serve as a way to revitalize the economically depressed area.

Senator Mitch McConnell and Congressman John Yarmuth both expressed relief that the VA had finalized its decision to develop on the Midlands property in October, stating that the process had dragged on too long and needed to begin. Though Mayor Greg Fischer presented detailed concerns about the Midlands site to the VA, he said in October that it was time to move forward, as “the veterans, the VA needs a new location.”

The spokeswoman for the Robley Rex VA Medical Center told Insider last month that the design of the new replacement hospital was expected to be completed by the end of this year, with construction anticipated to begin in mid-2019 and be completed by 2024 — with those construction dates dependent on additional congressional appropriations.

This story may be updated.