Slew of developments trigger identity crisis in Royal Oak
Royal Oak – Construction cranes are in the air, orange barrels and fences are up and controversy is brewing as this Oakland County suburb reinvents its downtown and more this summer.
Millions of dollars in public and private dollars are being sunk into new parking structures, office buildings, a hotel and a city park in Royal Oak. In recent years, the city of 59,000 people has become a magnet for trendy bars, restaurants and lofts. Now plans call for $67 million in public improvements, including tearing down an aging city hall and police department and rebuilding them a block away.
City funds and private dollars estimated in the millions will also go toward construction of a private office building on a former city-owned parking lot bordered by Third Street on the south, an alley on the west and Second Street on the north. The space occupied by the current city hall, facing Williams Street, and the police station, facing Third at Troy, will become part of a two-acre city park.
Some downtown businesses and property owners have sued the city and residents have formed a “Take Back Royal Oak” coalition.
A longtime downtown restaurant, Andiamo, closed last month, with owner Joe Vicari citing the loss of hundreds of city-owned parking spaces his customers relied on, taken for the city project. Vicari expected no relief from a yet-to-be built parking structure, since 300 of its 581 spaces have been promised to tenants of a planned office building of 700 workers.
Mayor Michael Fournier dismisses objections as a “manufactured controversy.”
Longtime residents, including businesswoman and former city commissioner Laura Harrison, are dismayed at the transformation of their once-sleepy downtown.
“I hate to say it but I prefer shopping in Clawson or Berkley – places which have maintained their small-town charm,” she said. “Things going up here are too tall – maybe they would be fine in Detroit, but I think they’re out of character for Royal Oak."
Resentment of City Hall extends into neighborhoods, too. Mary Bogush, whose family has lived near 14 Mile and Campbell for nearly 60 years, joined neighbors who demonstrated at the Mark Twain Park Aug. 8 after workers with power saws and earth movers started clearing the site to make way for a development of 186 low-cost homes.
The city is pursuing development “too much, too fast and without any consideration of taxpayers,” she said.
She added: “It isn’t right how they’re doing this and we want to have our voices heard,” she said. “This was once the City of Trees. Now they’re destroying them.”
“In general, the electorate doesn’t pay attention until something starts to hurt,” said Greg Stanalajczo, owner of Trillium Teamologies, which specializes in software, computer animation and graphics. “And they are starting to see how it is negatively affecting their city … higher taxes, no parking spaces, ignoring seniors’ needs, no high-level planning."
Stanalajczo, a member of Take Back Royal Oak, added: “Overall, people are getting upset at a condescending attitude being presented from the top down.”
Stanalajczo points to what happened after he posted on social media parts of a 2015 traffic study he obtained from the city through a Freedom of Information Act request.
The report, done by Plante & Moran CRESA, said that despite two new parking structures, the city center area would still have a shortage of nearly 300 parking spaces.
“I wrote about parts of the report with details of the numbers and how ‘more bullets would follow,’” Stanalajczo said. “A few days later, two Royal Oak police detectives show up at my business and frightened off some potential customers.
“They wanted to talk to me about the ‘bullets,’ which someone interpreted as a threat and reported to police,” he said. “I was speaking of ‘bulleted’ points or facts pulled out of the report. Their faces went pale, they apologized and they left."
Tale of two cities
Fournier bristles at the suggestion he or others have acted improperly and denies the city failed to do due diligence before awarding contracts.
“The Civic Center Project is the result of four years of thoughtful negotiations and strategic planning,” Fournier said in an emailed statement to The News. “Throughout this open process, the city commission, planning commission, DDA, and staff spent hundreds of hours working with economic development and planning professionals, legal experts, our business community, and residents to ensure we made the best possible decision for our community.
“The project will generate over $200 million in economic activity, bring more than 700 new jobs, increase available parking during peak hours and produce millions in new tax revenue, all while facilitating the building of our new police station, new city hall, and a new downtown park for families to enjoy,” Fournier said.
Charles Semchena, a former city attorney and city commissioner, said Royal Oak has ignored or been slow to respond to critics of its development initiatives.
Those plans have included providing free city-owned land for one office project and selling developer Ronald Boji, who is building a six-story office tower, a slice of prime city-owned property – a parking lot bordering Third Street near Williams Street -- for $1. The city is also giving him $5.5 million and a promise to build a city park and parking structure for tenants.
“While the separate components of the City Center project appear to be non-offensive, when looked at as a whole, the site plan is a disaster due to the parking deficit, horrific traffic and safety issues, reduction of accessible parking for seniors and those with disabilities, and the destruction of nearby businesses, including the Farmers Market,” Semchena said.
John Truscott, a spokesman for Boji, said the incentives involved with the project are "not unusual" and that developers receive tax breaks, grants and other aid for projects in Detroit and elsewhere.
“You can call it an in-front loan, whatever you want,” Truscott said. “The only thing that is unusual is the guaranteed tax revenue stream Boji is giving the city – that’s nothing I have ever seen or heard of before -- about $12.8 million over the next 20 years.”
Two new city commissioners, Randy LeVasseur and Kim Gibbs, sent an open letter in July to Royal Oak businesses and taxpayers lamenting the “ill advised decisions of the mayor and the commission majority” in approving no-bid contracts over $25,000, in violation of the city charter, which requires competitive bids.
In an Aug. 23, 2017, memo to Fournier and the city commission, Royal Oak City Manager Don Johnson voiced support for the City Center project and defended the city’s strategy of shunning any open bid process.
“Planning put together a package identifying and providing details of each of the sites, circulated it to potential developers and invited them to submit proposals," Johnson wrote. "This approach was used rather than simply taking bids because we’ve found, through bitter experience, that developers will not respond to an open bid process if it requires making details of their plans public.”
More than nine no-bid contracts related to the City Center project, totaling nearly $9 million, have been approved since 2014, according to city records.
“We were told the land was given to Boji along with a $5.5 million incentive because ‘nobody else was interested in doing the project,” Gibbs said. “I suspect if you put out an ad that you were giving away property valued at around $1 million that would attract 10 to 15 developers.”
Former City Commissioner James Rasor said all elements of the City Center plan have been vetted by the city’s development department and legal advisers and “incentives are comparable to those granted to other developments.”
Tom Hallock, a former city commissioner and member of the Planning Commission, has a different view of how the project came together.
“It was all run through the planning and city commissions piecemeal, instead of a whole as it should have been, without necessary parking and traffic studies, not to mention a study on the effects the changes would have on downtown businesses and the Farmers Market,” Hallock said.
What state law says
Officials with the Michigan Association of Planning and the Michigan Municipal League stressed there are no state laws requiring competitive bidding on contracts. Or forbidding officials from accepting campaign contributions from developers. Or requiring cities to do traffic, safety or economic studies. Or for training citizens who are thrust into making important decisions involving taxpayer funds or proposed land use.
But they also said that doesn’t mean those safeguards aren’t needed.
“Many municipalities have conflict of interest provisions in their bylaws or charter,” said Andrea Brown, director of the Michigan Association of Planning.
Chris Johnson, general counsel for the Michigan Municipal League, said “a number of Michigan communities have specific bidding policies because it is good government policy.”
A lawsuit filed by Royal Oak property owners against the city alleged a lack of proper oversight and raised other concerns, but those issues were never aired in court.
The lawsuit was dismissed, first by Oakland County Circuit Judge Cheryl Matthews, and later by the Michigan Court of Appeals.
Matthews and the appeals court both found that the businesses who objected to the project “lacked standing” because they did not suffer damages different than or beyond those of the public, such as the loss of parking spaces.
“We thought we had shown the court everything it needed,” said attorney Ethan Holtz. “We even had discovery from the city that found two reports regarding problems regarding parking had been buried – never showed to either the council or the Planning Commission, before they made their decision to approve."
Among those who sued the city was Shep Spencer, owner of Little Tree Sushi and Dixie Moon Saloon, two Main Street businesses next to the planned parking structure
“I was never against development and never dreamed I would be suing the city of Royal Oak,” he said. “But this, especially the loss of parking spaces behind my businesses, has cut deep; we’re down 35 to 40 percent." .
He also questions whether city leaders have been influenced by campaign contributions from developers. ”
Critics point to a December 2016 fundraiser that architect Jason Krieger held in his home for Fournier. Six weeks later, according to city documents, Krieger received a $585,000 contract to do schematic drawings for the new city hall. Several city commissioners have received campaign contributions from developers or their employees.
Fournier said all donations went to the Royal Oak Animal Shelter. Rasor, who co-hosted the event, agreed all donations went to a local charity and said Fournier or his campaign “didn’t get a dime.”
“Your other questions, which come from a small band of discredited critics, are nothing more than manufactured controversy,” Fournier said in response to written questions from The News. “Just as the courts saw through and rejected their baseless legal challenges, our residents see through their political nonsense, too.”
Brown said, “As a rule, elected officials should be above reproach and even the appearance of conflict of interest should be avoided."
“If I were a council person, I would not want to take contributions from a developer,” she said.