1. A group of 10 Royal Oak business owners recently vowed to sue the city of Royal Oak after the Michigan Supreme Court denied an application to reverse a ruling that was dismissed first in the Oakland County Circuit Court and then in the Michigan Court of Appeals regarding the legality of the civic center project.

1. A group of 10 Royal Oak business owners recently vowed to sue the city of Royal Oak after the Michigan Supreme Court denied an application to reverse a ruling that was dismissed first in the Oakland County Circuit Court and then in the Michigan Court of Appeals regarding the legality of the civic center project.

File rendering provided by the city of Royal Oak


Business owners to sue Royal Oak after court denies appeal application

By: Sarah Wojcik | Royal Oak Review | Published June 11, 2019

Advertisement

ROYAL OAK — On May 29, the Michigan Supreme Court issued an order denying an application submitted in December by a group of Royal Oak business and property owners to reverse the Aug. 8 decision of the Michigan Court of Appeals, which had ruled in the city’s favor in a case challenging the civic center development.

The group now vows that it will bring a new lawsuit against the city of Royal Oak for damages and legal fees caused by the city’s civic center project, according to a May 31 Take Back Royal Oak Coalition press release.

Greg Stanalajczo, a plaintiff and Take Back Royal Oak Coalition member, said that despite the Supreme Court’s stance that the claimed damages were “speculative,” the actual damages caused by the civic center project include “the actual business revenue losses and the destruction of our downtown businesses and the loss of more than 400 jobs.”

The group of 10 plaintiffs originally filed suit against Royal Oak in July 2017 over the legality of the civic center development, which includes a new medical outpatient building, a new City Hall, a new Police Department, a downtown park and a 581-space parking structure, which opened June 1.

In November 2017, Oakland County Circuit Court Judge Cheryl A. Matthews found that the plaintiffs did not have standing, and she dismissed the case.

The plaintiffs appealed the decision to the Michigan Court of Appeals in July 2018, and the court upheld Matthews’ decision on the same grounds.

The suit challenged the legality of the multimillion-dollar project in terms of giving the Lansing-based Boji Group $5.5 million, violating the city’s charter in regard to the selling of bonds, and awarding the contract without soliciting bids.

However, the suit was dismissed in all cases because the courts found that the plaintiffs did not have standing to bring the suit against the city.

“We fought this injustice all the way to the Michigan Supreme Court, raised very important issues of concern for every Royal Oak resident, and the case has never been heard. We still believe firmly our legal positions were all correct,” Stanalajczo said in a statement. “By not hearing the case, Michigan courts have allowed the pay-to-play scheme to continue.”

He said the civic center project has contributed to a “slump for almost all the businesses in the downtown area.”

Stephen Miller, a retired accountant and former city commissioner, said he was concerned that the city “gave away nearly $20 million dollars in no-bid contracts to build the city center project.” He said he would rather the money be used for seniors, sidewalks, the farmers market and public safety.

Royal Oak City Attorney David Gillam said city officials were not surprised about the Supreme Court’s decision to not hear the case, and he called the group’s legal efforts “frivolous.”

“We’re pleased,” he said in a May 30 phone interview. “We recognize that the business and property owners have a right to file a motion for reconsideration of the Supreme Court’s decision. We expect they will do that just because that has been their practice all along, probably on the very last day possible in an effort to drag this whole issue out.”

Gillam said the city’s legal team put “quite a bit of work” into the case while it was in Circuit Court.

“We not only had this lawsuit, we were dealing with also three related appeals of Planning Commission approvals given to various stages of the project, so there were four different lawsuits involving the civic center development that we were fighting,” he said.

He added that the city brought in outside counsel to help with the appeal of the main suit.

“(This has caused) a significant amount of time and a significant amount of legal expense to the city, but the real losers here are the taxpayers because of the result of the delays caused by all this litigation,” Gillam said.

He estimated that the cost of construction increased between 5% and 10% due to delays, and he said that the cost associated with bonding for the parking deck and other parcels of the project also increased.

“The bottom line is, the lawsuit cost the taxpayers of Royal Oak several million,” Gillam said.

According to city officials, the civic center project is now 40% complete, with the parking deck complete and construction underway on both the new City Hall and the Police Department. Both are scheduled to be completed in 2020, and the Henry Ford Health System building is expected to open in mid-2020.

Once the current City Hall and Police Department are demolished, the city will begin construction of a downtown park in their place. The city recently hired MKSK to design the park using public input.

“We remain dedicated to providing transparent updates to local businesses and residents and will continue to keep them apprised of the project’s continuing progress,” Mayor Michael Fournier said in a statement. 

According to a city press release, more than a dozen downtown businesses have opened throughout the development project or are in the process of opening.

“We’ve remained committed to the vision of the city and the impact this transformational project will have on the downtown, bringing more foot traffic and parking capacity that will benefit local businesses. We’re proud to contribute to making Royal Oak an ideal place to live, work and play,” Ron Boji, president of Boji Group, said in a statement.

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 Co. LLC; One Hundred Seven South Main LLC; and R&M Realty LLC.

The city created a website, www.rethinkro.com, to provide updates on the civic center project, parking alternatives and more.

Advertisement