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Lawsuit filed over parking project bidding process

By: Tiffany Esshaki | Birmingham - Bloomfield Eagle | Published February 18, 2019

BIRMINGHAM — The unchosen bidder for a city parking structure project is suing the city, the city manager and a city commissioner over what they say was an “unlevel playing field”  for the job’s bidding process.

Ara Darakjian and TIR Equities were one of three firms to submit bids in response to the city’s request for proposals to build a new structure at 333 N. Old Woodward Ave., which would create more parking downtown at North Old Woodward and Bates Street. The development would replace the existing North Old Woodward structure and build on the surrounding land to create mixed-use office and residential spaces, and extending Bates Street to create pedestrian access to the nearby Rouge River and Booth Park.

A second firm, REDICO, eventually withdrew its bid, leaving TIR and the eventual contract winner, Woodward Bates. Comprising equity partners Saroki Architecture, parking consultant Carl Walker and Walbridge building design and construction, among others, Woodward Bates was created specifically to bid on the project in question.

The problem, according to TIR’s attorneys, Mark Rossman and Brian Saxe, is that members of that partnership, specifically Victor Saroki and Carl Walker, created the conceptual design for the development and the RFP to select developers. Therein lies a conflict of interest, the attorneys say.

“We feel the evidence supports that there were conflicts of interest,” said Rossman. “While it’s not an element of our claim that the better project did or didn’t get the job, we do feel when the citizens of Birmingham have an opportunity to look at this, they’ll be disappointed in the boondoggle of shortcomings in due process.”

Kevin Byrnes, the communications director for the city of Birmingham, declined to comment on the case, saying that the city doesn’t discuss pending litigation. City officials, including City Manager Joe Valentine and Commissioner Mark Nickita, were served with the suit last week.

The impetus of the project dates back to August 2013, when the parking demand in the city became noticeably greater than the supply. About seven months later, the Ad Hoc Parking Study Committee was created to analyze the dilemma, and it reported back to the City Commission with its findings one year later.

To implement the suggestions of that report, suggestions as to which structures could be redeveloped to accommodate more spaces, yet another body was created, the Ad Hoc Parking Development Committee. Not long after, the City Commission took the recommendation of the Ad Hoc Parking Development Committee to approve the release of an RFP to bring preliminary conceptual designs and cost estimates for parking expansion at the North Old Woodward and Bates site. Saroki and Walker were awarded that contract over Albert Kahn Associates for $67,860. Kahn’s bid was $12,000 more. Rossman did not reply to emails before press time asking if TIR had submitted a bid for the conceptual design phase.

Planning and revisions for the site continued into 2017, when a request for qualifications and then an RFP were released to seek development proposals at North Old Woodward and Bates, and the lot of bidders was reviewed in January 2018.

According to the minutes from an Ad Hoc Parking Development Committee meeting on June 4, 2018, REDICO pulled out of the bid process, leaving TIR and Woodward Bates as the remaining bids, and TIR’s pitch estimated about $17 million more in public investment than the Woodward Bates team.

To boot, the TIR proposal planned for a tax increment financing arrangement to fund the public element of the project, which was a violation of the RFP, since Birmingham does not have a TIF district.

Before a bid was chosen, the complaint alleges, TIR went to the city orally and in writing via a letter to suggest that TIR pay for the construction of the development and recoup costs via income from the structure, after which the firm would sell the parking structure to the city of Birmingham for $1. That letter, sent on July 3, 2018, was never included in the agenda packet for the next evening’s meeting, they say.

Asked about the cost difference in the bids, Rossman said the complaint doesn’t extend to the proposals or the end result itself, but the time between the RFP and the bid reviews — the constitutional right to due process.

“The nuances of the financials of the bid are not necessarily our focus. We believe the way our plaintiffs arranged their bid, their proposal would’ve been the better economic choice,” said Rossman. “This is a situation in which elected officials caused the city to pay the winning bidder to create the RFP.”

Saxe went on to explain concerns with the Woodward Bates partners, who independently have worked with city employees privately before. Nickita, an architect himself by trade, is said in the complaint to have worked with marketing firm Zimmerman Volk in the past, which is a partner in Woodward Bates. Nickita did not recuse himself from the selection process.

Valentine is named in the suit for alleged negligence in not putting the letter from TIR’s Darakjian into the commission packet to be considered.

A predevelopment agreement is expected this month, though the suit asks for an injunction on that action, as well as financial damages. Despite that, the city of Birmingham issued a press release last week announcing a predevelopment agreement with Walbridge/Woodward Bates as a first step in moving toward a binding development agreement in the near future for the parcel.

“We recognize the need to increase the parking capacity in downtown Birmingham for our residents, businesses and visitors,” said Valentine in a prepared statement. “With the adoption of the (predevelopment agreement), we look forward to advancing this effort and addressing parking downtown.”

Valentine added that if a development agreement is eventually reached, included should be further details on timing, logistics, costs and other details, like a parking mitigation plan while the structure is being built.

Victor Saroki, of Saroki Architecture, declined to comment on the suit, as did Birmingham City Attorney Tim Currier. Carl Walker did not return a request for comment before press time.