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  • By Lisa Brody

Birmingham responds to Bates Street project suit

Birmingham has filed its response in federal court to a lawsuit by TIR Equities, a real estate development company in Birmingham, and its principal, Ara Darakjian, 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.

In its response to Darsakjian's lawsuit, amended since its initial filing, the city responded by denying allegations in the suit, and requesting a jury trial, attorney costs and denial of damages to Darakjian.

In addition, on February 23, Woodward Bates, LLC, the development group chosen by the city for the project, was added as a third party defendant at the request o the group.

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 Woodward Bates, LLC. REDICO withdrew from consideration.

Woodward Bates, LLC consists of Victor Saroki of Saroki Architecture in Birmingham; Paul Robertson of Robertson Brothers Homes in Bloomfield Hills; and John Rakolta Jr., of Walbridge in Detroit and Ron Boji of the Boji Group in Lansing.

The parcel of land, approximately 4 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.

Of contention by Darakjian is that Saroki and a parking consultant helped Birmingham develop the city's bid proposal, depriving Darakjian of his constitutional right to due process.

In the city's formal response, to many of the assertions in Darakjian's complaint, the defendants, including Woodward Bates, LLC, answered “Defendants lack knowledge or information to form a belief about the truth of the allegations,” including the statement “The mixed-use residential and retail/commercial features of the design proposed by TIR were superior to those proposed by Woodward Bates,” in the complaint, and “The total net cost to the City of TIR’s proposed design was, in fact, less than that of Woodward Bates, due to the additional revenue received from property taxes, lease payments, and parking revenues under TIR’s proposal.”

An assertion of favoritism by the complainant received the same response by the defendants.

Darakjian is seeking to permanently enjoin the city from finalizing a contract for the project with Woodward Bates, which they are in the midst of, as well as ordering them to conduct the bidder selection process over again “in a manner that is consistent with Plaintiffs’ constitutional right to due process.” Darakjian is also seeking damages from the city for its “wrongful actions,” as well as for his costs in preparing the submission, and a jury trial.

Darakjian further asserts in his complaint that “defendants acted under color of state law to deprive plaintiffs of a definite property interest.” The city and other defendants denied the allegations.

In response to all of Darakjian's complaints, the defendants requested the court dismiss the amended complaint; deny the defendant's injunctive relief; issue a declaratory judgment for the defendants; deny the plaintiffs any sort of damages; and grant them all costs and attorney fees. If there is a trial, they requested a jury trial.

City manager Joe Valentine and commissioner Mark Nickita were included in the suit, the complaint alleges, because Nickita, an architect and urban designer, failed to recuse himself even though he had a working relationship with a member of the Woodward, Bates team – market research and strategic analysis firm Zimmerman Volk. Nickita has been a city commissioner for 9 years and served on the city's planning board for 10 years.

As for Valentine, Darakjian asserted that he sent the city commission a letter 6 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.

The case has been assigned to U.S. District Court Judge Paul Borman. Darakjian is represented by Rossman Saxe PC. The city of Birmingham, Valentine and Nickita are represented by Beier Howlett, PC, and Woodward Bates is represented by Carson Fischer PLC.

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