From Crain’s Detroit Business:
At the current pace of construction, there is a good chance Troy will be finished with its transit center project before the Michigan courts can say the same.
And if the center opens near Maple Road and Coolidge Highway next month with the legal question of ownership unresolved, the city could have to buy it back at substantial cost from Farmington Hills-based Grand/Sakwa Properties LLC in a long-running dispute.
The Federal Railroad Administration last week notified Troy it would resume reimbursements to the city for construction on the transit center, which had been halted for several months, after receiving a plan for continuous control from the city, said Rob Kulat, public affairs specialist for the railroad administration.
Reimbursements had stopped on the federal funding portion of the nearly $10 million transit center after the Michigan Court of Appeals ruled in May that the property belonged to Grand/Sakwa, not the city. Troy has racked up about $1.6 million in reimbursable building expenses since then, said City Engineer Steve Vandette.
A three-judge appellate panel overturned a 2011 Oakland County Circuit Court ruling in Troy’s favor, and ruled that Grand/Sakwa is entitled to reclaim 2.7 acres of land where most of the construction is taking place.
The city asked the Michigan Supreme Court to take up the case a few weeks ago, but has also requested an assessment on the property from an outside consultant, which is expected soon. The assessment would be a precursor to a possible condemnation case in court against Grand/Sakwa to retake the site if the courts continue to side with the developer.
“We expect a grand opening for the center to be around Sept. 1, assuming no unforeseen circumstances,” said Troy City Attorney Lori Grigg Bluhm. “And we have a last resort, which would be condemnation, that we have to initiate if we don’t get relief in the courts.”
Meanwhile, Grand/Sakwa recently made its own offer to resolve the dispute with Troy, but city officials haven’t responded to it other than by asking the Supreme Court to take up the court case, said Alan Greene, partner at Dykema Gossett PLLC in Detroit and attorney for Grand/Sakwa. He declined to elaborate on the offer.
“It’s a proposal to resolve the whole thing, but really there are other issues for us besides the ownership of the property,” Greene said. “Even if they achieve ownership, their only real access to the site is by way of our private road.
“So we’ve been asking about traffic loads, liability insurance, and how they plan to control traffic and parking so people don’t park on our property.”
Grand/Sakwa agreed to sell a portion of its 77-acre development for $1 to develop the transit center, which broke ground last November. It transferred title to 2.7 acres to Troy in 2001, but the terms of the sale called for the land to revert to Grand/Sawka in 10 years if the city hadn’t funded a transit center project by that time.
Troy and neighboring Birmingham had secured several funding commitments from federal and other sources for the center, with a preliminary estimated cost of $8.4 million that the City Council later reduced to about $6.4 million.
But Grand/Sakwa contended that the project didn’t reach full funding in time as the consent judgment requires and sought to revert the property. Birmingham withdrew from the project in 2011.
If the Supreme Court refuses to hear the case, or sides with Grand/Sawka, the city would have to make a good-faith offer on the property backed by an assessment.
If the company rejects that offer, Troy can take Grand/Sakwa to court and seek a judge’s order taking back possession of the center.
The Supreme Court could consider Troy’s request to appeal as early as Sept. 17.