Ann Arbor reaches settlement in Library Lot lawsuit

Monday, January 28, 2019 - 3:03pm

Councilmember Anne Bannister, D-Ward 1.

Councilmember Anne Bannister, D-Ward 1. Buy this photo
File Photo/Daily

Ann Arbor City Council voted to approve a settlement for a lawsuit filed against the city by Councilmember Anne Bannister, D-Ward 1, and former Councilmember Sumi Kailasapathy, D-Ward 1, at the Jan. 22 City Council meeting. Bannister and Kailasapathy filed the lawsuit in June to invalidate a $10 million contract Mayor Christopher Taylor and City Clerk Jacqueline Beaudry signed with Core Spaces, a Chicago-based developer which planned to construct a 17-storey high-rise in the Library Lot.

According to the lawsuit, the Ann Arbor city charter stipulates any purchase or sale of a value exceeding $25,000 be approved by at least eight councilmembers. Since Taylor and Beaudry did not seek the approval of City Council, Bannister and Kailasapathy argued the contract was not valid.

After Ann Arbor residents voted in November to approve Proposal A, an amendment to the city charter that required the city to retain ownership of the Library Lot, City Administrator Howard Lazarus sent a letter to Core Spaces in December terminating their purchase agreement.

The council voted 8-1 to settle the lawsuit with Bannister and Kailasapathy on Jan 22. This final settlement will require the city attorney to sign additional legal documents, preventing the city from selling the development rights of the Library Lot.

Upon Taylor’s suggestion, Bannister recused herself from the vote, as she was a plaintiff in the lawsuit. Councilmember Jeff Hayner, D-Ward 1, was the only no vote on approving the settlement. Councilmember Chip Smith, D-Ward 5, was not present for the meeting.

Hayner explained his reasons for voting no on the settlement, stating he was unsure of the council’s ability to invalidate a contract. He questioned the necessity of City Council to approve contracts like the one the city was engaged in with Core Spaces.

“I would like this body to take a look at its rules,” Hayner said. “I don’t think it’s proper that a body reserve the right for itself to waive the final review of a contract.”

Councilmember Jack Eaton, D-Ward 4, expressed concerns similar to Hayner’s but voted yes to approve the settlement. Councilmember Ali Ramlawi, D-Ward 5, also voted yes on the settlement but wanted to clarify that his vote was only in agreement with affirming procedural requirements stipulated by the city charter and was not a vote to prevent the development by Core Spaces.

“I would like to go on record saying I was under the impression that that’s what the lawsuit was about — it was not about preventing the construction of a building but about the procedures of a whole process,” Ramlawi said. “And if we are going to be consistent up here, we have to respect that principle.”

After the vote, Bannister read a prepared statement thanking the city attorney for recommending settlement of the lawsuit and the council for approving the settlement.

“When Sumi Kailasapathy and I filed our complaint last June, we did not take that matter lightly,” Bannister said. “We did so because we believed that when City Council votes to approve a contract, that contract must be available for our review.”

Bannister ended her comments by declaring her hope for the city to follow proper procedures, as written in the city charter, when approving contracts in the future.

“By settling this case, we are acknowledging that the voters amended the city charter in November and we are agreeing that the city will not proceed with the sale of the Library Lot to Core Spaces,” Bannister said. “I hope we will also agree that going forward, that the city will approve contracts only when the contracts are written and available for review.”