City councilmembers sue city of Ann Arbor for breach of protocol in sale of Library Lot

Wednesday, June 27, 2018 - 6:19pm

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Emma Richter/Daily

Ann Arbor City Councilmembers Sumi Kailasapathy, D-Ward 1, and Anne Bannister, D-Ward 1, have sued the city of Ann Arbor, Mayor Christopher Taylor and City Clerk Jacqueline Beaudry over a $10 million deal regarding the development of Library Lot. The contract, signed by Taylor, Beaudry and Chicago-based developer Core Spaces on May 31, hands over the development rights of Library Lot, a parking area next to the Ann Arbor District Library where Core Spaces plans to construct a 17-story high-rise called the Collective.

Attorney Eric Lipson filed the lawsuit on behalf of Kailasapathy and Bannister June 18 in the Washtenaw County Trial Court. The lawsuit accuses Taylor and Beaudry of violating Ann Arbor’s charter by signing a development contract without first consulting City Council. The council voted 8-3 to sell Library Lot in April 2017 to Core Spaces, but the purchase was not finalized until this year. The lawsuit claims the May 31 contract finalizing the purchase was not presented to City Council.

According to Kailasapathy, the Ann Arbor City Charter requires purchases or sales valued over $25,000 to be approved by at least eight councilmembers. She said the language of the charter is clear and she therefore feels confident about the strength of her and Bannister’s case.

“In plain English, it says a contract has to come, and there’s no way they can say there was a contract 13 months before because there was no contract, there was a resolution,” Kailasapathy said.

Kailasapathy claimed she and Bannister sued the city to protect the interests of their constituents. Ann Arbor voters trust the City Council to represent their interests, Kailasapathy said, so the council must get a say in financial decisions.

“Anne Bannister and I, we represent Ward 1,” Kailasapathy said. “Our residents, they do like people to have financial oversight over the city’s business.”

She added the authority of the charter needs to be respected because it maintains checks and balances within city government and provides order.

“I look at rules and regulations very seriously,” Kailasapathy said. “If City Council itself doesn’t follow its charter, how do we expect the residents of Ann Arbor to follow our charter and ordinances?”

The two councilmembers are calling for the May 31 contract to be voided and brought forward to City Council for discussion. Kailasapathy said the goal of the lawsuit is not to extract financial compensation from Ann Arbor. She explained there is no money involved because she and Bannister have pro bono representation, and the mayor and city clerk are working with a city attorney.

The city has not yet issued an official response to Kailasapathy and Bannister’s lawsuit. Taylor said he and Beaudry consulted city attorneys — Ann Arbor has 10 on staff — in signing the May 31 contract and he trusts the attorneys accurately interpreted the various forms of law constraining his authority.

“They are experts in municipal law,” Taylor said. “It is their job to ensure that what we do complies with state law, city charter and city ordinance. I have every confidence that they’re doing their job and that they know their job better than these two city councilmembers.”

Noting political tensions across the nation, Taylor said the lawsuit negatively affects the city’s political climate.

“I don’t believe that councilmembers suing the mayor and the city about a political matter is a move in the right direction for the city,” Taylor said. “Our national and state government display acrimony and inability to work together. I don’t think we need to see that here in Ann Arbor.”

According to Taylor, Kailasapathy and Bannister have historically been opposed to the sale of the air rights of the Library Lot. The proposed development will include about 360 apartments and 131 hotel rooms. It will also feature retail, office and lobby space, as well as a 12,000-square-foot plaza.

Core Spaces has been gathering community input on the project. Core Spaces representatives held a public meeting June 20 to discuss the proposed design, and the developer plans to organize more meetings going forward.

“We were very encouraged with the support and excitement for our development in our meeting with community members,” Tom Harrington, the director of acquisitions for Core Spaces, wrote in an email interview with The Daily. “Feedback on the development was very positive and many in attendance expressed that the Collective will benefit the residents of Ann Arbor.”