Businesses Turn To Michigan Supreme Court In Fight Over City's Malfeasance In Royal Oak City Center Development

ROYAL OAK, Mich., Feb. 7, 2019 /PRNewswire/ -- The Take Back Royal Oak Coalition today announced, Ten Royal Oak businesses that sued the City of Royal Oak over the City Center Development have turned to the Michigan Supreme Court in a bid to have justice prevail and their day in court. The plaintiffs want to hold city leaders accountable for violating the city's charter and to contest the project and "gift" by the city of $5.5 million in taxpayer money as well as sale of the largest revenue producing surface lot in downtown for $1 to the Boji Development Group in a no-bid contract granted in 2018.

The businesses (plaintiffs) are seeking a reversal of the Michigan Court of Appeals decision that they did not have "standing" on Aug. 8, 2018. The court incorrectly found that the plaintiffs could not have special injury because it believed the Plaintiff's claimed damages were "speculative." 

The filing with the Michigan Supreme Court states, "The City of Royal Oak, in its zeal for this project, violated the Michigan Constitution, a state statute, and its own Charter to make it happen. However, because they were denied standing; no court has yet looked at the allegations.

"The three-judge panel with the Court of Appeals ruled that the Plaintiffs did not have the right to 'second guess' city government about the merits of the project. However, the Plaintiffs were not, and are not, second guessing the merits of the project, but rather, the plaintiffs are alleging that laws were, are and continue to be broken and that is an issue for determination by the Court," said Ethan R. Holtz, attorney with Jaffe, Raitt, Heuer & Weiss, P.C.

Greg Stanalajczo, a plaintiff in the lawsuit who runs Trillium Teamologies and has property interest in downtown has seen the impact on business beyond the mass exodus of restaurants since the project started and eliminated more than 500 parking spaces in the Central Business District.

"When I signed the initial affidavit in 2017, we were contesting that the loss of parking and city center project would cause significant harm to businesses in the area," said Stanalajczo. "Unfortunately, a year later in the summer of 2018 our prediction and case were proven, with many businesses in the area suffering upward of a 50 percent loss in business with 11 restaurants and retail shops calling Royal Oak quits."

Stanalajczo added that his customers will no longer come to his offices on main street due to lack of parking and his elderly and disabled employees are struggling to find convenient handicap parking.

Former Royal Oak City Attorney and City Commissioner Charles Semchena, Jr., said, "The judges previous ruling sets an ugly precedent, in that no taxpayer or resident could sue a city when the mayor and commission violate the City Charter spending limits and by awarding no-bid contracts to their political contributors."

Stephen Miller, a former Royal City Commissioner and a retired accountant authored several of the financial policies in the current city charter. He's also worked on numerous municipal audits over nearly two decades.

"The plaintiffs were right to sue the City of Royal Oak for mismanagement, or plain ignorance, when it comes to the city's finances and Charter," said Miller. "When the City Commission majority voted in 2017 to fund the development with bonds, they violated the city's Charter by exceeding the city's debt limit without a vote of the citizens."

Miller explains that Royal Oak's Charter wisely stipulates that the city cannot have more than 5 percent bond debt based upon the assessed value of all real and personal property located within the city. Thus, with Royal Oak's approximate $3 billion in assessed valuation, the maximum debt limits the city should have been allowed to bond for is approximately $150 million.

"The current bond debt limit, with the addition of the city center project, is currently in excess of $182 million," said Miller. "This rightfully includes the underfunded employee pension and retirement bonds which, the city incorrectly states they do not need to include in the city's Charter limitation of 5 percent. The city's Charter makes no such distinctions."

Concern about Royal Oak City Hall's transparency has grown from a group of business owners to a grassroots citizen effort and vendors from the Royal Oak Farmers Market.

Plaintiffs in the lawsuit and appeal include: Dixie Moon Saloon LLC, The Nash Family Ltd Partnership, M&R Realty, 111 South Main, LLC, Sullivan Investment Group Limited Partnership, Third Street Properties Inc., Corp One Inc., Group 225 Inc., Corp One Property Company LLC, One Hundred Seven South Main LLC & R&M Realty LLC.

SOURCE The Take Back Royal Oak Coalition