Royal Oak Businesses And Citizens Protest Catastrophic Central Business District Development

ROYAL OAK, Mich., May 15, 2018 /PRNewswire/ -- Already fighting two lawsuits by Royal Oak taxpayers, the City of Royal Oak is moving forward with its invitation-only, ground breaking today for the new Central Business District Development. The city's event, held behind tall construction barriers inside a tent occurred despite vocal concerns by citizen groups, city commissioners and local businesses.

The immediate concern by the "Take Back Royal Oak" coalition of taxpayers is the lack of convenient handicap parking to the Central Business District resulting from the Williams Lot closure. Persons with physical disabilities, and seniors wishing to work for, or frequent, businesses and restaurants along Main Street will now have to navigate two-to-four blocks, even in inclement weather. The only downtown handicap parking is in city lots and structures – no street parking is available for people with disabilities.

"Even though the courts have not yet ruled on the legality of the city's plans, our Mayor and the majority of Royal Oak's City Commissioners have determined to move full speed ahead with their expensive and risky makeover of our downtown," said Royal Oak City Commissioner Randy LeVasseur. "If the courts later determine that their actions were illegal, it could have a devastating impact on Royal Oak's long term financial health."

Commissioners LeVasseur and Kim Gibbs have both expressed concern on how the project was awarded to the Boji Group through a no-bid contract. In addition, it is unheard of for a city to give $5.5 million in taxpayer money as an "incentive" to the developer. Also, at concern is the gifting of the Williams Lot to Boji for $1, which is most likely the most valuable piece of land in the business district estimated at more than $2 million.

"This project is riddled with no-bid contracts that resulted in increased costs and debt beyond the limits in the City Charter," said Royal Oak Commissioner Kim Gibbs. "Bidding on government contracts is a best practice intended to avoid higher costs for taxpayers and the unsavory temptation for politicians to receive money from the recipients of the no-bid contract. Unfortunately for Royal Oak, this has happened and is the primary reason that I cannot support the City Center project."

An April 18, 2018 report by S&P Global Ratings on the City of Royal Oak affirms that "The city's total debt burden is high." The two taxpayer-initiated lawsuits are seeking a court order compelling the mayor and commission majority to obey their oaths of office and comply with City Charter debt limits.

Commissioner LeVasseur agrees that the City is acting recklessly with taxpayer dollars and is in violation of the City Charter. Should the city be sued by bond holders, the residents will be looking at an unfunded $60 million tax bill along with interest.

"First, our elected officials authorized over $126 million of debt to buy stocks in 2017, assuring us that the City is smart enough to earn enough money in the stock market to pay off that debt as well as the City's gigantic unfunded retiree obligation. This debt was so substantial that it caused the city to exceed its debt limits in our City Charter - a limit established to protect taxpayers and our city's financial well-being," said LeVasseur.

LeVasseur added that the City's Charter is the equivalent of Royal Oak's Constitution. It was designed in part to protect residents from excessive debt created by politicians, and the types of dangers that can result. He states that Mayor Fournier and other commissioners are potentially putting an amazing debt burden on all Royal Oak citizens and businesses.

Problems with the City Center Project

• Complete lack of transparency (back-room deals, cronyism, lack of public input)
• No-bid contracts to significant political donors to Mayor Fournier and a few city commissioners
• No formal traffic and parking studies to address parking shortage and accessibility
• Discrimination against seniors and persons with disabilities with no convenient handicap parking
• Sale of $2 million plus plot of city land to Boji Development for $1
• Gift of $5.5 million in taxpayer funds to Boji for development of a private office building
• Two unsettled lawsuits that could potentially derail the development
• Violation of the City Charter by exceeding debt limits
• More than $200 million in City Debt
• Citizen vote to approve debt exceedance in city charter did not occur
• Royal Oak officials in 2017 took on $126 million in debt to invest in stock market
• Williams Lot was debt free and generated $500,000 annually for the city
• New parking deck will have $18 million in debt
• Low-tax, low-debt city is now a high-tax, high-debt city
• Site plan developed without a "good faith" consideration from adjacent properties and business owners
• Detrimental impact on Royal Oak's historic Farmer's Market
• The plan has already resulted in Andiamo's, Cantina Diablo, Red Fox and many other organizations deciding to not renew leases or sell

SOURCE Take Back Royal Oak Coalition