The exchange of letters between the State of Michigan and the attorney representing Joe Nederlander is getting increasingly testy. Last week in this space we broke the news that the state was balking at plans to sell Nederlander about 35 acres of property adjacent to the Michigan State Fairgrounds in Detroit.
That message came in a May 31 letter from the Michigan Attorney General’s Office to Nederlander’s attorney, J. Leonard Hyman. Hyman wrote back a few days later, saying he couldn’t understand what has the state in such a tizzy. He seemed particularly mystified that the AG’s office was tossing around the word “fraud.”
The original plan was to sell the property to Nederlander for $6.1 million so he could build hotels there, a use the state thought would benefit the fair. Nederlander, who has a long-term lease to manage the fairgrounds during the 50 weeks a year the fair itself is not in session, also had plans to build an auto racetrack on fairgrounds property. But public opposition killed that idea, which, in turn, made the hotels less viable. So Nederlander then entered into a deal to sell the property to a limited liability corporation called Tartan Organization, which turned around and struck a $17 million deal to sell the same property to Detroit Public Schools.
The state’s position is that the high school DPS intends to build won’t complement the fair, and wants Nederlander to come back to the bargaining table.
On June 4, Hyman informed the state that a purchase agreement has already been signed, and that there is nothing in the agreement limiting what his client can do with the property once he gains control.
As to the allegation that there may have been some “fraudulent misrepresentations” going on, Hyman could only assume the accusations were made as a result of some sort of “pique.”
“The development of the entire parcel has always been disclosed. …” asserted Hyman.
You could almost see the steam coming out of the ears of lawyers over at the AG’s office at that one.
The first time anyone at the state knew about the school deal “was when it was splashed across the front page of the newspapers,” wrote assistant AG Matthew H. Rick. Then he added, “For you to assert that ‘we have informed the State of every one of our moves’ is simply not true.”
Rick goes on to make an observation that should be of interest to those who think $17 million is too much for the school district to pay for the property. Saying that DPS is buying the land “for more money than what the State would have sold it to them (for) if it knew the school district was interested,” Rick goes on to point out that during negotiations between the state and Nederlander, “your client indicated that … the property was not worth the $6.1 million ultimately agreed upon by the parties.”
From the perverse perspective of the cynics here at News Hits, this just keeps getting better and better.
And it’s far from over. For one thing, although the purchase agreement between the state and Nederlander doesn’t specify what can be built on the property, it does say he can’t assign interest in the land to anyone else without first receiving permission. That, according to the state, was never done. So how did DPS end up putting a million-dollar deposit on the land?
That’s one of the questions we hope will be answered in the lawsuit brought by taxpayers seeking to halt the sale. Which brings to mind an old saw that maintains “the enemy of my enemy is my friend.” Maybe so. But while it’s true that the state and Joe Nederlander are both on the same side as co-defendants in court at this point, it sounds an awful lot like they may be squaring off against each other in a legal battle of their own real soon.
News Hits is edited by Curt Guyette, the Metro Times news editor. Call 313-202-8004 or e-mail [email protected]
