You are viewing this article in the archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see
Posted on Mon, May 2, 2011 : 5:55 a.m.

Developer Stewart Beal sues City of Ypsilanti again -- this time, for dispute surrounding tax benefit

By Tom Perkins

The City of Ypsilanti and Stewart Beal are back in court. This time, however, it’s not over the fate of the Thompson Block building.

The newest legal dispute between the city and the Ann Arbor-based developer stems from a December decision by the City Council to revoke a tax benefit granted to the Beal-owned development and management company Go Downtown!

Beal alleges that the city revoking the break constitutes a violation of his civil rights under the 14th Amendment and recently filed suit for damages in U.S. District Court.

The Obsolete Property Rehabilitation Act exemption was approved for the renovation of a 123-year-old building at 208 W. Michigan Ave. in 2004. It saved Go Downtown! $83,000 to date and would have saved another $40,000 through the 8-year exemption’s life. The building has been turned into residential lofts and commercial space.

Per city policy established in 2008, council can vote to revoke an OPRA if an OPRA holder is late paying taxes twice.

Go Downtown! paid a $4,700 tax bill due in September two months late, in November. In 2009, the company also made a payment three months late. It is the first time one of the city’s eight OPRA holders has been late twice on tax payments, city staff said.

The council initially voted 5-2 on Dec. 7 to keep the OPRA. The issue was reconsidered at the next regular council meeting on Dec. 21, which resulted in a 5-2 vote in favor of yanking the exemption.

But the city must petition the Michigan State Tax Commission to revoke the OPRA. The commission is the body that grants and can officially revoke an OPRA. A Michigan Department of Treasury spokesperson said revocation of the Go Downtown! OPRA was on the three-person panel’s April 21 agenda, but it was removed after Beal filed the suit on April 20.

The state approved the OPRA legislation in 2003. It works by freezing a building’s taxable value at the time an abatement is passed. The freeze lasts for up to 12 years. Developers are exempt from paying certain millages, which provides an incentive to rehabilitate old buildings.


Developer Stewart Beal

Normally, property owners pay their taxes to the Washtenaw County Treasurer’s Office, which distributes money to local municipalities. Even if a property owner is late on the taxes, the county will still pay the municipalities, except in the case of a tax exemption like an OPRA.

Because of the OPRA, the city must collect taxes directly from the property, and if payment is late, the city must go to court or employ a collection agency to get the funds.

Beal and the city disagree over whether wording in the OPRA legislation allows a city to revoke the break over late tax payments.

A section of the OPRA states “the legislative body of the qualified local governmental unit may, by resolution, revoke the obsolete property rehabilitation exemption certificate of a facility if it finds … the holder of the obsolete property exemption certificate has not proceeded in good faith with the operation of the rehabilitated facility in a manner consistent with the purposes of this act …”

Beal contended that the act is in place to encourage renovation of historic buildings, and he has done so in good faith.

“The purpose of the act is very specifically not to make people pay taxes by the due date,” he said. Beal added that the City Council's voting against revoking the OPRA, then reversing that decision at the next meeting further muddied the situation.

He said the council approved a 2008 policy allowing the city to revoke an OPRA without consulting the state commission, therefore making the policy “unlawful.” He also said the city never filed a certificate of nonpayment with the Washtenaw County Register of Deeds. Therefore, Beal said, there's no county record that shows his taxes were paid late.

City attorney John Barr said he didn’t believe revoking a tax break constituted a civil rights violation. He said he disagreed with Beal’s argument of “I have a right not to pay my taxes.”

“The OPRA is a special deal where the recipient gets a tax break, and to receive that they have to agree to do certain things,” Barr said. “If they don’t do those things, then there are consequences.

“Essentially, council giveth, and council can taketh away.”

He said Beal has not “proceeded in good faith” as stated in the act, and therefore the city has a right to revoke the OPRA.

Because Beal is seeking damages in civil court, the file has been forwarded to the city’s insurance agency, which Barr said is reviewing the case.

Ypsilanti Mayor Paul Schreiber, along with Council Member Dan Vogt, voted against revoking the OPRA at the Dec. 21 meeting. Schreiber said he was against revocation because the late taxes were eventually paid, and with a penalty.

No court date has been scheduled, and Barr said the city has yet to be served.

The council will also soon after to consider renewing an OPRA at the Beal-owned Thompson Block building.

Beal said he didn’t want to go to court, but had no other options.

“I never imagined in my wildest dreams that investing 10 million dollars and 10 years of my life into the City of Ypsilanti would result in me suing the city twice in one year,” he said.

“Unfortunately the citizens of Ypsilanti voted for City Council members that do not consider real estate law when making decisions and casting their votes. It is hard to believe that City Council and its legal counsel ever thought revoking the OPRA would be possible based on even the most simplest review of the OPRA act and associated State of Michigan real estate law.

“I look forward to winning again and then putting this dark chapter in my business career behind me and continuing to invest and work in the community in which I live.” Tom Perkins is a freelance reporter for Reach the news desk at or 734-623-2530.



Wed, May 4, 2011 : 1:07 p.m.

I commend the city council on this argument. The blight, that Mr. Beal fails to address in Depot town, has exhibited a total disregard for our city. Let's find someone, who actually cares about the restoration of Ypsi.


Mon, May 2, 2011 : 7:31 p.m.

Are we allowed to chase Mr. Beal out of town yet?


Mon, May 2, 2011 : 4:35 p.m.

So tax breaks are now a Constitutional issue? I'm guessing Beal is attempting to hitch his suit to the Due Process clause. Yeah, good luck with that.

Reginald Booker

Mon, May 2, 2011 : 4:12 p.m.

I currently rent from Beal Properties, LLC and I have really enjoyed the experience. Nice aparment, affordable, and responsive maintenance staff. I would recommend the company to others that want a nice place in Ypsi.


Wed, May 25, 2011 : 3:27 p.m.

this is why I love the Internet you are anonymous so you can pretend to be anyone you like even if they don't exsist


Mon, May 2, 2011 : 3:51 p.m.

14th amendment ? Which clause??? I disagree with the statement from the attorney that Beal does not have the right to "not pay taxes". Beal does have that right. He also has the right to experience the consequences of exercising that right. We read about wingnuts stating they dont need to pay income taxes for jsut the same reason as Beal cites. Nice to hear a wanna-be "big" developer trying to take that stance. Luck with that, Stuart. Did Stuart ever pay the property taxes he owed on all his rental properties? That was close to 100k that was past due, as I recall. How did we get so lucky as to have a Kircher-clone handling this property?


Mon, May 2, 2011 : 3:20 p.m.

I was one of the tenants displaced when Beal had his building on Washington condemned over illegal gas hookups. Lucky for me, I've moved into a more respectable place. Beal treats Ypsilanti like garbage. Is anyone surprised at his actions on this one?


Wed, May 25, 2011 : 3:25 p.m.

Ypsilanti needs to run this guy out of town like he was Frankinstins Monster

Mr. Burns

Mon, May 2, 2011 : 2:56 p.m.

I commend the City Council for revoking this tax break. The rules are the rules and I am glad to see that the City is finally enforcing this agreement now because they certainly have let Beal Properties(or "GoDowntown" whatever that is) slide on so many other things within the City. I disagree with jondhall's comment above that the City of Ypsi is tough on landlords, I have seen them give landlords up to a year to fix a problem tenants have complaints about, turn a blind eye when permits aren't pulled, and they rarely enforce fines to any landlord. It is obvious (through the many articles about Beal here on that the City and the Mayor, have supported Beal's since he took on all those properties at once, and they have always given him plenty of leverage. And I guess they were trying to do a good thing, help out a young guy that bought a lot of houses at once. But, that is just how Ypsi has always worked. If you have money and friend in the Mayor's office, then you are as good as gold. But now it is backfiring on them, the spoiled child is having a tantrum, so to speak. And to Mr. Beal's comments about spending 10 million dollars in 10 years...I say "so what you must not be a very good businessman if you can't pay your taxes on time!"


Mon, May 2, 2011 : 2:54 p.m.

Just curious when there is any time to actually get any properties worked on? Seems like every time I turn around this guy is in court.

Pete Murdock

Mon, May 2, 2011 : 2:17 p.m.

@Gary Hann "Ypsilanti routinely assesses up to $10,000 fines for "blight" if someone's rental apartment has a dim light bulb or needs a bead of caulk in a miniscule place." REALLY!?! ROUTINELY!?! You can't produce even one actual example.


Wed, May 25, 2011 : 3:24 p.m.

walk around Ypsilanti and you can see examples of blight all over. here is a hint they have Beal signs in the front yard. Beal is the blight in the community. the guy preys on the poor and students. I have looked at a few properties owned by him and they are just as bad on the inside as they are on the outside.


Mon, May 2, 2011 : 1:22 p.m.

He was garnted a tax break and instead of paying his taxes on time he pays them late, now he needs his lawyer? With cities looking for ways to save money Beal gave them what they needed to revoke his tax break. Big price to pay for such small tax bills. Maybe his high priced lawyer will save his butt or maybe he'll learn to pay his bills on time. Paying late causes the sity to have to borrow money to pay their bills, something they can't afford to do.

zip the cat

Mon, May 2, 2011 : 1:18 p.m.

And the Stewart Beal circus keeps on a rolling


Mon, May 2, 2011 : 12:47 p.m.

Beal is quoted as saying "the purpose of the act is very specifically NOT to make people pay taxes by the due date." I have not read the act, but I would be shocked if it allowed or encouraged people to pay their taxes late.


Mon, May 2, 2011 : 12:36 p.m.

Mr. Beal has lied about everything from deadlines to the language of the legal agreements he signed with the city. There's no reason to believe he's not lying again.


Mon, May 2, 2011 : 12:34 p.m.

Get some courage Ypsi. Tear that eyesore down.


Thu, May 5, 2011 : 3:34 p.m.

This case is not about the Thompson building.


Mon, May 2, 2011 : 11:55 a.m.

I'm for one have not ever waived the "Beal Flag". In this case I would be betting that he wins this case hands down. If the City Attorney thinks for one moment he can win this case he should take it on a contingency basis. His taxes have been paid with the appropriate penalties and interest. His eyesore the City permitted on the Corner of Cross and River has nothing to do with this case. If it sounds like a "Witch hunt" and looks like a "Witch hunt" it just might be one. To bad it took Beal Ten Million dollars to maybe realize his investment is in the tank, tax abatement's or not, no one is investing in that city. Scorecard when this is over: Beal 1 City of Ypsilanti 0, city attorney wins again.


Mon, May 2, 2011 : 3:54 p.m.

The exemption states: you have to pay on time. Break that agreement that you signed, and there can be consequences. Paying late fees and penalties have nothing to do with it.

Wolf's Bane

Mon, May 2, 2011 : 11:44 a.m.

Hey, anyone listening in Ypsilanti? Developer Stewart Beal wants his cake and eat it too.

Elaine F. Owsley

Mon, May 2, 2011 : 11:40 a.m.

Enough already!! How long is this nonsense going to continue? I want to hear someone say "Mr. Beal, tear that wall down!!!"

Jimmy McNulty

Mon, May 2, 2011 : 10:58 a.m.

OK, Beal is making up his own rules again. I believe that the vote by the Ypsi City Council to revoke his OPRA exemption is a referendum on Beal's Thompson Block debacle. On the plus side, I see the kickstands on the Thompson block eyesore were moved back and they're almost off the road. I wonder when Lord Beal will let the city have back the full use of its road.