Officials from both West Windsor and InterCap Holdings spent hours on June 3 negotiating with fair housing advocates on a plan to bring a transit village to the Princeton Junction train station area.

While the negotiations did not result in an immediate agreement on a key issue — the number of affordable housing units in the plan — negotiations are expected to continue between West Windsor, InterCap, and the Fair Share Housing Center, as directed by Superior Court Judge Linda Feinberg. The next hearing date is scheduled for Thursday, July 7.

West Windsor officials believe the negotiations could yield positive results and help the transit village become a reality. “I think this is a progress,” said Mayor Shing-Fu Hsueh. “Hopefully, the three parties will think it over and come up with something we can all live with.”

The hearing was to be held before Superior Court Judge Linda Feinberg, who delayed approval of the settlement in April, saying a more thorough hearing on affordable housing issues — and a better notice of the hearing — was needed.

The judge scheduled the June 3 meeting for further review and required InterCap and West Windsor officials to send out a public notice explaining the reasoning for including only 5 percent affordable housing units on the site. The hearing was to determine whether the 40 moderate-income housing units on the site, or 5 percent of the 800 units planned, was adequate.

The settlement, reached last November, calls for 800 housing units, retail, and infrastructure and amenity improvements on InterCap’s property, where the two-story office buildings at 14 Washington Road are now located on the southbound side of the tracks. The integrated development would not include any office space. Under the agreement, InterCap will be required to construct 70,000 square feet of retail space correlated to the phasing of residential units.

As the hearing began on June 3, however, an attorney for the Fair Share Housing Center announced a new settlement offer was on the table. Feinberg urged West Windsor and InterCap officials to work with the Fair Share Housing Center. While negotiations took place, an agreement was not made by the end of the day, and Feinberg postponed the hearing until July 7.

“In the meantime, they will allow the three parties to sit down and work something out,” said Hsueh. “As long as it’s something that can be agreed on all by all parties, the judge will sign it.”

Hsueh said he could not provide details about the negotiations, but said the key is going to be the affordable housing issue.

West Windsor Planning Attorney Gerald Muller said West Windsor attorneys will have to report back to the court to indicate whether there has been a settlement reached or whether a trial will continue on July 7.

Muller said a new settlement would still be between West Windsor and InterCap but with Fair Share Housing Center as well, which is now a participant in the proceeding.

If no settlement occurs, “there would be a hearing on the settlement by virtue of rulings of the court, and if they don’t like the result, they could appeal,” he said of the Fair Share Housing Center. The same goes for West Windsor, if officials with the township do not like the result.

If a settlement is reached, the judge would have to approve it.

Since the InterCap litigation was filed in May, 2009, as a Mount Laurel affordable housing lawsuit, Feinberg must conduct a fairness hearing to determine it satisfied Mount Laurel principles and the Fair Housing Act.

The issue with the 5 percent set aside for affordable housing raised significant concerns — both at the Planning Board and Township Council levels — before the council adopted ordinances in March to go along with the settlement agreement that it had approved earlier. The Fair Share Housing Center has been raising the concerns all along.

However, the township has taken the position that since it has already received a court order approving the second round for its affordable housing plan, and has submitted a third-round affordable housing plan, it is compliant with any affordable housing need generated by West Windsor. Therefore, township officials argue, it was not necessary to have any affordable housing on the site, even though there are 40.

Insiders speculate that the problem may be resolved if 75 affordable units are added to the settlement agreement.

A call to InterCap CEO Steve Goldin was not returned by press time.