Just weeks before the U.S. Supreme Court was to hear arguments on whether a New Jersey town’s redevelopment plan discriminates against minorities, the parties came to a settlement.

The Mount Holly council voted 5-0 on Wednesday to provide homes for owners of 20 units in the rundown Mount Holly Gardens rowhouses who had refused to sell.

Under the settlement, the town retained nonprofit housing company TRF Development Partners of Philadelphia to build 44 affordable-housing units, with grants from organizations such as the Ford Foundation and the National Fair Housing Alliance.

The TRF development will receive a property tax abatement from the town under the agreement in Mount Holly Gardens Citizens in Action v. Township of Mount Holly.

Other developers are scheduled to build the remaining market-rate units in the 520-unit development.

The settlement also calls for the entire redevelopment project to be finished in six years, while previously there had been no end date, says Louis Capelli Jr. of Florio, Perrucci, Steinhardt & Fader in Cherry Hill, Mount Holly’s redevelopment attorney.

“What drove the settlement is the Supreme Court case. Whenever a matter is coming to an end, the fact that the outcome is being determined by someone other than the parties is risky to everybody,” Capelli adds. Arguments had been scheduled for Dec. 4.

The Gardens once had 329 units but Mount Holly purchased and demolished most of them. About 27 families remain, 20 of whom have chosen to move into the new housing.

The others will receive fair-market value for their homes, averaging around $50,000.

“For the people who hung in there, who showed they have very deep ties to this community, who really didn’t want to be uprooted, I think we got them a fairly good settlement while at the same time we let the township go ahead with the redevelopment,” says Olga Pomar of South Jersey Legal Services, who represented the plaintiffs.

“It’s a little bittersweet that we couldn’t do this earlier in the process,” she adds.

The town declared the run-down Gardens a redevelopment zone in 2002.

Banding together as Citizens in Action, the residents, most of whom have low incomes, sued in state court in 2003, contending that the project mostly hurt minorities and, as a result, formed a prima facie claim under the federal Fair Housing Act.

They said that the compensation the town offered for their homes would not be enough to let them buy elsewhere in Mount Holly and that they could not afford the units in the proposed development.

The case was dismissed in 2005 and the Appellate Division affirmed in 2007.

In 2008, the residents sued in federal court in Camden, claiming the town’s plans to condemn the Gardens and replace it with market-rate housing violated the Fair Housing Act because it had a disparate impact on the town’s black and Hispanic residents.

U.S. District Judge Noel Hillman dismissed the case in January 2011, finding that white Gardens residents were impacted in the same way as minority residents.

The U.S. Court of Appeals for the Third Circuit reversed in September 2011, noting that Hillman failed to consider data showing the project affected 22 percent of the town’s black households and 32 percent of its Hispanic households, but only 3 percent of its white households.

It held that the plaintiffs’ evidence was sufficient to establish a case of disparate-impact discrimination.

The town appealed, and the U.S. Supreme Court granted certiorari on the question of whether disparate-impact claims are cognizable under the Fair Housing Act.

Hillman has informally agreed to retain jurisdiction over the case for six years to enforce the settlement, according to Mount Holly’s solicitor, George Saponaro, of Mount Holly’s Saponaro & Sitzler. ■