Developer Stewart Beal, City of Ypsilanti ordered to facilitate dispute over Thompson Block
A Washtenaw County judge ordered the City of Ypsilanti and developer Stewart Beal to set up facilitation sessions in an effort to break a stalemate on how to proceed with the Thompson Block building.
Washtenaw County Circuit Court Judge Donald Shelton on Wednesday told attorneys from both sides to meet with former Judge John Collins and have the facilitation complete by June 18.
Shelton gave Collins the authority of the court to require any city officials or council members to participate in the sessions. He also said Collins is allowed to order as many sessions as needed to bring the two sides to an agreement.
Assistant City Attorney Karl Barr said he thought the order was fair and is an effective way to hold good faith negotiations.
“It will hopefully prevent an ‘all or nothing’ result,” Barr said.
Shelton ordered both sides to split the costs of the sessions, which run at $250 per hour. He added it was the quickest he had ever ordered two sides to reach an agreement.
Beal said he was pleased with the decision.
“As I always said, once the concept is presented in front of a reasonable party, a reasonable decision will be made,” he said. “The judge asked the city to do what we always wanted the city to do, which is come to an agreement with us.”
Beal has contended a plan he and City Manager Ed Koryzno developed and presented to Ypsilanti City Council provided a reasonable timeline for removing the shoring from the city’s right-of-way and renovating the structure, which was badly damaged in a fire last September.
The City Council voted 4-3 to reject the plan, and the city subsequently filed a lawsuit April 7 to have Beal remove shoring propping up the building’s exterior from the city's streets.
In a countersuit filed on May 7, Beal’s attorney, Nora Lee Wright, alleged the City Council was negligent in rejecting the agreement. The lawsuit asked that the city be ordered to issue a building permit and right-of-way permit to remove the shoring from the road.
City officials maintain no such permits are needed to remove the shoring from the road, only to begin work on the property. Without the shoring, Beal said the structure would likely collapse, and he won’t move the shoring until he has the proper permits to begin work. In the complaint, he said the city is, in effect, ordering the building be demolished.
Barr, who was served the complaint Wednesday, said the City Council wasn't negligent in rejecting the agreement because the plan didn't bring the building into compliance with building codes.
Among other issues, he said it didn’t include replacing windows, doors or the roof.
“It was still a bombed out building,” Barr said.
Beal has since developed a new set of plans that call for fully renovating the building. He said he has verbal agreements from two tenants interested in opening restaurants and bars in the building - but neither tenant will sign legally binding documents until the lawsuit is resolved.
Beal said he will accomplish the renovations by removing the shoring from the road, renovating the one-third of the building not damaged by the fire at 408 North River St. then restoring the damaged portion of the building at 400 North River St.
Beal previously said the potential tenants bring the backing needed to seek financing to complete the project, and he is awaiting approval for historic structure tax credits.
Barr said acceptable renovations would normally require the building be approved for a certificate of occupancy, but in this case, they may accept just having a roof, stable walls, windows and doors. He estimated a reasonable timeline given the financial requirements would be roughly six months.
When asked whether that was a reasonable timeframe, Beal said those kinds of estimates should be left to third-party experts during facilitation.
Shelton suspended the hearing for Beal to show cause, which was originally scheduled for Wednesday, until June 23.
Tom Perkins is a freelance writer for AnnArbor.com. Reach the news desk at firstname.lastname@example.org or 734-623-2530.