A judge has thrown out a lawsuit by Pontiac in the latest round of the city's three-year legal fight to demolish the downtown Phoenix Center parking structure.
Monday's decision by Oakland Circuit Judge Michael Warren brings to three the number of Phoenix Center court rulings that have gone against the city, which has one ruling pending in the Michigan Court of Appeals.
The city's former emergency manager declared that the 2,500-space parking deck should come down because the city could no longer afford its maintenance costs. But this year, as the city's finances stabilized , Mayor Deirdre Waterman said she was having a change of heart. On Tuesday, Waterman said she would soon explore "other options."
Now that Pontiac's budget is balanced and the city is running a surplus, "it has been my opinion that the Phoenix Center can be part of the strategy for the development of our downtown area," Waterman said. Those words were welcomed by city's legal opponents, a family-owned real-estate firm that owns the twin Ottawa Towers office complex that adjoins the parking deck — and which asserts it owns a 35-year-old easement for its office tenants to park in the structure.
"Our family company would prefer to work collaboratively and cooperatively with the city that we are so invested in," said Mike Stephens, a partner in Ottawa Towers LLC.
"This ruling is an important victory, but unfortunately we're still entangled in litigation with the city that is hampering local economic development and investment in Pontiac," Stephens said. The office complex has about 400 employees of the state of Michigan working there, and if the parking dispute can be resolved there could be many more employees moving in, he said.
Stephens' family firm has offered to buy the structure and has spent more than $1 million in the last several years maintaining it, he added. In contrast, the city has not spent any money in years to maintain the structure, Waterman said.
Built as part of a Pontiac revitalization effort in 1980, the Phoenix Center once was seen as an anchor to rebuilding the city's central business district. But by 2012, after years of maintenance neglect, Pontiac's then emergency manager Louis Schimmel ordered that it be demolished, citing it needed $8 million in repairs and was incurring annual operating losses of $175,000.
That decision was approved by the city's former mayor and the Oakland County Board of Commissioners. Yet, the court cases turned up documents that disputed Schimmel's characterization of the deck as being in shoddy condition. And Blair McGowan, owner of the Crofoot Ballroom in downtown Pontiac that is a block north of the Phoenix Center, said this week's ruling against the city was good news.
"The city of Pontiac's legal assault on Ottawa Towers has been sending a terrible message to business owners looking to invest in downtown Pontiac," McGowan said.
"What we should be doing is working together to bring back our downtown, not filing lawsuits that harass local businesses," he said.
Contact Bill Laitner: blaitner@freepress.com or 313-223-4485.
Judge dismisses latest lawsuit in Phoenix Center saga
A judge has dismissed a lawsuit filed earlier this year by the city of Pontiac against Ottawa Towers in regard to $2.6 million in liens placed on the Phoenix Center.
Oakland Circuit Judge Michael Warren dismissed the suit, in which the city argued that the liens Ottawa Towers placed on the downtown parking garage were not proper.
Pontiac Mayor Deirdre Waterman said the case was dismissed because other litigation between the city and Ottawa Towers involves similar issues.
Those cases include a 2012 lawsuit filed against the city by Ottawa Towers, which sought to stop the city’s plans to demolish the Phoenix Center, and a 2014 condemnation case, which has reached the court of appeals.
“The city questioned liens that were filed on the property based upon repair work at Ottawa Towers,” Waterman said. “The city has no indication of what that work was. That has not been supplied on any grounds that we’d be able to verify the value of (the repairs).”
Mike Stephens, partner with Ottawa Towers, said he was pleased by the dismissal.
“Our family company would prefer to work collaboratively and cooperatively with the city that we are so invested in, but the city has chosen to adopt an adversarial and confrontational stance that needs to end,” Stephens said.
“This week’s ruling is an important victory but unfortunately we’re still entangled in litigation with the city that is hampering local economic development and investment in Pontiac. The real victims of the city’s baseless legal witch hunt are the taxpayers because the city is spending precious taxpayer dollars on frivolous litigation, attempting to smear and destroy our business. Businesses like ours would prefer to spend our time and energy rebuilding Pontiac.”
Blair McGowan, who owns the Crofoot Ballroom, also issued a statement.
“I feel that as a local business owner, this decision is great news,” he said.
“The city of Pontiac’s legal assault on Ottawa Towers sends a terrible message to business owners looking to invest in downtown Pontiac. What we should be doing is working together to bring back our downtown instead of filing lawsuits that tear down and harass local businesses.”
Litigation over the issue began when then-Emergency Manager Lou Schimmel announced plans to demolish the Phoenix Center, citing $8.1 million in needed repairs and annual losses of $175,000. Ottawa Towers filed suit, seeking $9 million in the event of a demolition.
Waterman was not mayor when the Phoenix Center litigation began. She said Pontiac has entered into different times now. She announced a budget surplus during last month’s state of the city address and said Pontiac has more flexibility now.
“Because I inherited this I’m seeking to work it out,” she said.
“The city was still in financial crisis (when the case first reached litigation). That is not the case now, so I have a different set of circumstances I can work under. We still have state treasury, which has maintained receivership, so I have to maneuver to make sure I’m working within the bounds of the state treasury.”
There may be options outside of continued litigation, Waterman said.
“Certainly I’m looking at some of those other alternatives, and I’m trying to convince (the state) treasury there may be some other workable plans that will not put the city in financial jeopardy (and) will be advantageous to the city in terms of economic development and revitalizing the historic downtown as well as the center area of the city, which has great potential and has maintained heightened interest from developers around town.”
ABOUT THE AUTHOR
Dave Phillips covers courts for The Oakland Press, having earlier covered the police beat. Reach the author at dave.phillips@oakpress.com or follow Dave on Twitter: @ByDavePhillips.
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