Developer suing city and 3 council members is open to settlement
Lawyer for East Lansing developer says client is "committed to seeking an amicable resolution." He remains willing to pursue Old Town housing project.
LANSING - A developer who is suing the city and three City Council members over an alleged federal Fair Housing Act violation is open to a settlement so he can move forward with a nearly $6 million proposed affordable housing project in Old Town.
But it's unclear if the city is willing to do so.
The federal lawsuit, filed July 13, alleges the city and the council members violated the federal Fair Housing and Civil Rights acts when they voted against a tax incentive for East Lansing developer Sam Saboury's project.
"We have several obstacles to overcome," Sheri Cataldo, Saboury's Southfield-based attorney, said in an email to the Lansing State Journal. "But Dr. Saboury is committed to seeking an amicable resolution if feasible."
Court records filed this month with the U.S. District Court of Western Michigan in Grand Rapids show both parties have agreed to "voluntary facilitative mediation" and are in the process of contacting "possible facilitators having familiarity with the subject matter in this case."
The process is part of a "joint scheduling order" that's typical with federal cases of this kind, City Attorney Jim Smiertka said. Smiertka added the process requires both parties to choose a facilitator.
"We just continue to litigate this, and we have not engaged in any settlement discussions at this time," Smiertka said.
Official: Federal lawsuit could halt Lansing's economic development
Saboury's project calls for a 23-unit mixed-used development at 1119 N. Washington Ave. The project intends to transform an abandoned warehouse into commercial/retail space that includes rental housing. Income limits for renters would have ranged from $13,850 for one person and up to $39,480 for a family of four.
Saboury's lawsuit, if it goes to trial, could take more than a year to be resolved. Court records show Chief Judge Robert J. Jonker ordered on Jan. 3 for both parties to show cause in writing by Tuesday "as to why this matter should not be dismissed."
At-Large Council Member Carol Wood, First Ward Council Member Jody Washington and Third Ward Council Member Adam Hussain are listed as defendants in the Saboury lawsuit. They are being represented by F. Joseph Abood, chief deputy city attorney, and David Otis of the East Lansing-based Plunkett Cooney law firm.
Messages left last week with Abood and Otis weren't returned. Wood, Washington and Hussain have declined to comment on the issue because of the pending litigation.
The three council members and At-Large council member Judi Brown Clarke, last year's council president, voted against incentives for Saboury's project. Clarke denies she and her colleagues were discriminatory and said they are simply doing the best they can to serve their constituents' needs and increase the city's tax base.
Mayor, Council members at odds over low income housing
Council's 4-4 vote on March 28 effectively denied Saboury's request to pay 4% of net revenue from the project rather than property taxes. The vote still leaves open the option of making a 10% payment, which would not require council approval. Saboury told the LSJ after the vote he can't finance the project with a 10% payment.
Cataldo wrote in an email to the LSJ that her client's objective for mediation will be to move the project forward "in a manner that is acceptable to everyone involved."
Saboury's lawsuit follows a Fair Housing Act complaint that Mayor Virg Bernero said was filed in May by a resident. The complaint was sent to the U.S. Department of Housing and Urban Development and alleges that council members' 4-4 vote on tax breaks for Saboury's project was a violation.
In an April news conference, Bernero accused council members who voted against the project of discriminating against "low-income people" who want to live in Old Town.
If Saboury and the city agreed to a settlement, it would likely mark at least the third high-profile legal settlement for the city since May 2015.
The city agreed to a $160,000 separation agreement with Janene McIntyre, the former city attorney, in February 2016. It also signed off on a $650,000 settlement for J. Peter Lark, the Board of Water & Light's former general manager, in May 2015. The BWL is a city-owned utility.
Eric Lacy is a reporter for the Lansing State Journal. Contact him at 517-377-1206 or elacy@lsj.com. Follow him on Twitter @EricLacy.