Developer sues Birmingham over unchosen bid

February 1, 2019

TIR Equities, a real estate development company in Birmingham, and its principal, Ara Darakjian, filed suit this week in federal court against the city of Birmingham and two city officials, city manager Joe Valentine and city commissioner Mark Nickita, over a bid it had submitted in response to a request for proposal (RFP) issued by Birmingham in November 2017 to redevelop the N. Old Woodward parking structure and create an extension for Bates Street.

 

TIR Equities was one of two finalists, along with Woodward Bates Partners, to redevelop the N. Old Woodward parking lot with more parking, an extension of Bates Street, a liner of retail along the new street, a mixed use building comprising residential and office space, and a park. 

 

The city initially had four development groups submit proposals, which included parking consultants, developers, architects, designers and consultants, but only three ultimately submitted completed proposals to the city by the January 3, 2018 deadline: REDICO, TIR Equities and Waldbridge/Woodward Bates Partners. REDICO withdrew from consideration. 

 

Woodward Bates Partners consists of Victor Saroki of Saroki Architecture in Birmingham; Paul Robertson of Robertson Brothers Homes in Bloomfield Hills; John Rakolta Jr., of Walbridge in Detroit, and parking consultant Carl Walker.

 

The parcel of land, approximately four acres in the city’s central business district, consists of the current N. Old Woodward parking garage, an adjacent parking lot and adjacent parcels. The city’s objective had been to solicit creative and innovative development plans from qualified developers that will extend Bates Street from Willits to N. Old Woodward, connecting the north and south parts of Birmingham, to redevelop the remainder of the site by constructing a new parking structure that will provide a minimum of 380 parking spaces in addition to replacing the 770 parking spaces currently on the N. Old Woodward / Bates Street site, plus adding residential, commercial and/or mixed uses in order to create an activated, pedestrian-oriented urban streetscape while also providing public access to the Rouge River and Booth Park to the north. 

 

The RFP stated, in part, that the city was seeking a new parking structure with a minimum of 1,150 parking spaces; new mixed use building adjacent to a parking structure facing N. Old Woodward Avenue; a service drive access to the adjacent buildings both north and south of the parking structure; new mixed use building facing Willits Street; public park property and connection between a new city street and the existing Rouge River to the north; and a residential building on the north end of the site, which can take advantage of the existing views in the area.

 

TIR Equities, according to the lawsuit, contends that Saroki and Walker helped Birmingham develop the city's proposal, depriving Darakjian and TIR Equities of their constitutional right to due process.

 

“We commenced litigation a few days ago, filing this in federal court as a deprivation of our client's civil rights,” attorney Mark Rossman, of Rossman Saxe in Troy, said. “At the outset, it appears the city chose the architect and parking consultant which assisted in the development of the RFP and RFQ (request for qualifications). The process appears tainted. The city cannot abuse its power.”

 

Rossman said the city, which chose Woodward Bates Partners in June 2018, by a unanimous city commission vote, “did not conduct a thoroughly-reasoned analysis in making its final decision. They did not follow its own code, and did not reach levels of due process.”

 

The complaint asserts that Saroki and Woodward Bates Partners should have been excluded from the bidding process “as a basic ethical complaint.”

 

The lawsuit states that the city’s selection of the Woodward Bates Partners was the “culmination of an arbitrary, capricious, unfair, and unjust bidder selection process, tainted by, among other things, favoritism and conflicts of interest.”

 

At the June city commission meeting, planning director Jana Ecker said, “TIR Equities is proposing four levels of underground parking, a 15-story building, multiple other buildings that are six-stories, an extension of Bates street, all zoned PP-public property, so you go any height, but all the other buildings in the area are max five-story.” 

 

She said that Woodward Bates Partners also included an extension of Bates Street, numerous buildings and a plaza improvement with retail which would activate the space. “Their parking is in the rear, with a couple of levels of underground,” she said.

 

Most areas of Birmingham have zoning height requirements of five-stories. TIR Equities proposed a tax-incremented financing (TIF) subsidy, which city officials said was a city subsidy, and not in compliance with the RFP.

 

Attorney Brian Saxe said they are looking for “the consummation of the contract with Woodward Bates; we would like that process to be stopped.”

 

According to an update reported on Saturday, January 26, at the city's long-range planning meeting,  a predevelopment agreement with Woodward Bates Partners is to be finalized by early February 2019, and the development agreement is expected in March 2019. 

 

“We would defer to the court, but we would like the court to order the bidder selection process to comport to with due process, to be free from favoritism and be a fair selection process,” Saxe continued. 

 

He said they cannot say whether Darakjian's bid, designed by famed New York architect Robert A.M. Stern Architects, is better than the other, “but they needed to follow all due process.”

 

As for city manager Joe Valentine and commissioner Mark Nickita being included in the suit, the complaint alleges that Nickita failed to recuse himself even though he has a working relationship with a member of the Woodward Bates team – market research and strategic analysis firm Zimmerman Volk. 

 

As for Valentine, Darakjian asserts that he sent the city commission a letter six days prior to their July 9, 2018, meeting, yet Valentine did not include it on their agenda, stating that he and Darakjian should sit down first for a private conversation.

 

Birmingham spokesperson Kevin Byrnes said, “We have not been officially served. The city does not comment on pending litigation.”

 

Nickita, who has been a city commissioner for nine years and served on the city's planning board for 10 years before that, said he had not been officially served either, and he would not comment on pending litigation.

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