Three years after a fire destroyed several buildings in downtown New Haven, one of the sites affected by the blaze sits at the center of heated dispute between its owners and the city.

Almost immediately after firefighters subdued the flames on Dec. 12, 2007, the property at 91 Church St. sparked a fierce debate between the city and the property’s proprietor, Mid Block Development, over who should take responsibility for cleaning up the remains.

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The city says Mid Block owes it $1.85 million for demolishing the damaged building there and disposing of the debris. Until Mid Block pays, it cannot develop the property. But Mid Block says it should owe, at most, $1.2 million, said Paul Denz, Mid Block’s owner. The two parties have been at an impasse for almost three years.

“The city has grossly overcharged us,” Denz said. “[We] should at least be able to show them where we think we’ve been overcharged.”

Mid Block and New Haven have been unable to resolve their differences through private negotiations, and now the company has a civil lawsuit pending against the city. The suit alleges that the contractors the city brought in to clean up the lot were negligent, resulting in an exorbitant fee for Mid Block, Denz said. Since Mid Block has not paid the city for any of the demolition, the city has a lien outstanding on the property, which gives it a claim on the property for the full amount due.

“The City filed the lien … in order to ensure repayment of the large amount of taxpayer’s money (approximately $1.85 million) which the City was forced to expend in the aftermath of the fire,” Kelly Murphy, New Haven’s development administrator, said in a statement. “It would be reckless of the City to release this lien until such monies have been recovered.”

Meanwhile, part of the lot has been converted into a parking lot, and though Denz said he wants to put in commercial businesses and private residences, Mid Block will not develop the property as long as the lien remains in effect.

On a block already dotted with empty storefronts, 91 Church St. is hardly an anomaly, and community members have mixed views on the urgency of redeveloping the property.

Ward 7 Alderwoman Frances “Bitsie” Clark, whose district covers 91 Church St., said she is concerned with New Haven residents’ quality of life and does not “want to see whole pieces of the streetscape be a parking lot or empty lots.”

Crystal Boothroyd, a manager at Buffalo Wild Wings Grill and Bar on Church Street, said redeveloping the parking lot at 91 Church St. would bring more customers to the area and Buffalo Wild Wings.

But Bill Stutzman, manager of the Sprint store next door, said one more vacancy on a block filled with them hardly diminishes the area.

“It’s not like we’re waiting for this one place to be filled — there’s another vacancy next to us, and down the way and across the street,” he said.

Yet the only thing Denz and the city do agree on is that developing the lot would, in fact, improve the area.

“Every little bit [of development] helps,” Denz said. “By not letting me do anything, the city is not allowing me to contribute to the improvement of the neighborhood.”

Still, even if the dispute is settled, Denz is not optimistic that anything will happen with the property in the near future.

“Given the economic conditions here and throughout the country we may have to wait a while to do any kind of substantial development,” he said.