Updated: Developer Stewart Beal files countersuit against the City of Ypsilanti

The complaint charges that in doing so, the city is, in effect, ordering the building's demolishment.

The dispute over the building, and the shoring supporting it, began not long after the Thompson Block was gutted in a fire last fall. The fire was deemed arson, and police are still searching for a suspect charged in the crime.

The complaint asks the court to order the city to issue both permits and to approve an agreement reached between Beal and City Manager Ed Koryzno “which provides a reasonable time line” for removing shoring propping the building’s exterior.

The shoring is currently in River and Cross streets, but Beal said he is unable to do anything to remove the beams without the building permits. "The city is actually obstructing our progress on the project,” he said.

“At the very first meeting we ever had with the city, they made it very clear we were not to move anything out of the right-of-way without a building permit, so at this point, what are we doing?” he said.

Beal filed for building and right-of-way permits on March 4. A letter he provided to AnnArbor.com dated April 26 shows a code enforcement official recommended approval for the building permit to Kurt Weiland, the city’s building official.

Beal asserted his company has done everything required to obtain the permit, but the application was rejected without explanation. Beal is currently appealing the decision with the Washtenaw Construction Code Board of Appeals.

The right-of-way permit application was denied by Koryzno on March 22 because - among other reasons - a traffic control order allowing support beams to be in the road had expired.

The letter also stated no significant work has occurred on the property since the fire. Earlier in the complaint, Beal’s attorneys said he was not cleared to start working until December, at which point weather prevented any significant progress.

The city sued Beal, whose Historic Equities Fund 1 LLC, owns the structure, on April 7, to force the removal of all shoring from the roadway. The city alleges the Thompson Block building and shoring are a nuisance and hazard on several counts.

The filing came a day after the council voted 4-3 to reject the Beal-Koryzno agreement. In the agreement, a six-month timeline was provided to begin renovations on the building. It also called for Beal to have the shoring out of the street within 30 days.

“Some on the city council said filing this lawsuit will speed up the process … it has been shown to do the opposite of that,” Beal said.

City attorney John Barr said no agreement could be reached on the plan's details, such as an acceptable timetable or performance bond, so no building permit has been issued. He added that during that time, the traffic control order allowing the shoring to be in the street had expired.

Barr said the city council has an obligation to keep the roadway clear.

“Mr. Beal is in the public right of way,” Barr said. “He wants to use a public street for his personal purposes, which may be good purposes, but he’s still using a public street. We have an obligation as the city to make the streets available for public, not just someone doing business.”

Council Member Brian Robb, who voted against the agreement, said he asked at the April 6 council meeting what the completed renovations would look like. He was told that per the agreement submitted to council, the building would still have no roof or significant progress to the interior.

"In that plan, at the end of the year, the building wouldn't have a roof," Robb said. "If he thinks that is a plan, then we have disagreement on what a plan is."

In the countersuit, Beal alleges the city council abused its discretion in not approving the agreement.

Barr said the City Council and city manager may not always agree.

"The city council are elected to represent the interests of the people of Ypsilanti," he said. "They're in a situation where the merchants were up in arms, they had received complaints and phone calls ... council feels that this has gone on too long and they want to protect the rights of the public and keep the street open."

The complaint alleges the vote and denial of the permits is interfering with Beal's ability to obtain financing and find tenants to occupy the space, resulting in economic damages.

Beal said a lease has been presented to Andy Garris, the owner the Elbow Room in downtown Ypsilanti, who he says is interested in building a three-story, 6,000-square-foot bar and restaurant. Garris could not be reached for comment Thursday night.

Beal also said a “well-known restaurant group” based in Ann Arbor has shown interest in 10,000 square feet for a brewery and restaurant. He declined to name the group, but said it has been sent a letter of intent.

“They bring a certain amount of financial backing that will help us attract the money we need to do the project,” Beal said.

Floor plans provided to AnnArbor.com showed the remaining space would be converted into 12 luxury lofts.

Beal said he is confident the group would enter into a partnership once construction on the Thompson Block is cleared to resume.

“Certainly no legally binding contracts will be signed until the lawsuit is resolved,” he said.

Beyond the charges in the complaint, Beal said he believes the vast majority of residents want to see the building saved. He's started a drive seeking 2,500 letters of support from the community to present to the judge.

“It’s our position that there are maybe 20 people in the city who want the building demolished,” he said. “The vast majority of people who enjoy Depot Town and enjoy the city of Ypsilanti want the building saved, no matter what the cost, no matter what the timeline - a do whatever it takes type of situation.”

Robb said he has heard more support for clearing the roadway immediately.

"The overwhelming communication I receive from consituetnets says that this a hazard and they want the streets cleared," he said. "And in order to have the streets cleared, we need a plan."

Ypsilanti Mayor Paul Schreiber, who voted to accept the Beal-Koryzno agreement, said he would like to see work start as soon as possible and has concerns over the structure's safety.

“Right now we’re at court instead of the construction site ... ‘court’ and ‘fast’ usually aren’t used in the same sentence,” he said.

Beal said he's saddened to sue the city he lives in, but charges the city has “forced his hand on the issue.” He said he believes some council members would vote against any project he brought before them.

“Normally the city takes action against unwilling participants ...,” Beal said. “It’s kind of unprecedented to take action against an owner who will do whatever they say - you just have to be reasonable.”

Beal said his attorneys will make a motion to combine the two lawsuits before the next hearing on May 12.

Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at news@annarbor.com or 734-623-2530.