The city of Rochester has reached a $2.5 million agreement to settle a lawsuit filed against the city by the owner of a proposed downtown dental clinic that had been in the works since 2011.
The plaintiffs, Lilly Investments, in 2011 went before the city's planning commission with plans for building Dentists on Main at 600 N. Main Street. However, a series of disagreements between the parties caused the project to stall for several years, leading to a lawsuit against the city in 2014. Among the issues in the case were claims that the city refused to lift a stop-work order on the project or make a final decision on the project unless the applicant, dentist Louis Leonor, agreed to pay a $40,000 fee and waive any legal claims against the city while the city kept hidden their own legal expert's favorable review of the project.
Lilly Investments’ attorney, Brad Hughes, told a federal appeals court in September of 2016 that the city had held up a final decision on the project for more than three years in an attempt to have his client pay the $40,000 or waive his legal rights.
The case ended up in a federal appeals court after the Oakland County Circuit Court refused to hear the case, finding that all matters to alleviate the case hadn't been taken at the local level. The appeals court overturned the decision, sending the case back to the Oakland County court.
The city announced on Monday, April 23, that it had settled the case, leading to its dismissal on April 17. The settlement is for $2.5 million, with the city paying $1.2 million from its general fund and the city's insurance provider paying $1.3 million.
Rochester City Manager Blaine Wing said that when approving the project, the city incentivized the property owner to retain and preserve the front portion of the building in exchange for a waiver of onsite parking that would normally be required for a dentist office use. He said the result fell short of the city's expectations, and while the planning commission worked toward a resolution, the property owner filed suit against the city. Claims included equal protection violations, civil rights violations, due process violations and breach of contract.
"The city takes its fiscal responsibility and stewardship of the public's money very seriously," Wing said. "The city has many wonderful things going on with new housing, huge developments coming in, and a great amount of momentum and civic pride. To continue with litigation, spend more city employee and leadership time and resources, and risk additional public dollars with a potentially bad decision based on matters that occurred over four years ago is not productive and contrary to how the city wants to move forward with such things as development, infrastructure and other community enhancements.
"It was unfortunate that the city was dragged into this litigation on the cusp of the property owner obtaining approval, but the city council looks forward to concluding this matter."