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City withdraws court action against Milligan, announces new one

Norwalk real estate broker Jason Milligan, owner of POKO Phase II and III properties, speaks to Common Council members Sept. 4 in City Hall.

Correction, 1:22 p.m.: Story amended to reflect clarification from Jason Milligan regarding a Sept. 7 email exchange. Updated, 6:44 a.m.: Information added; 6:16 a.m.: Copy edits

NORWALK, Conn. — A court action against POKO property owner Jason Milligan and former owner Richard Olson has been withdrawn, and a new one filed, according to Norwalk Corporation Counsel Mario Coppola.

The new lawsuit “alleges that the parties, among other things, breached the LDA by conveying Phase II and Phase III properties in the project at 21, 23 and 31 Isaacs Street and 83 and 97 Wall Street without the consent of the Agency,” according to a press release sent by Norwalk Communications Manager Joshua Morgan late Monday.

The press release said:

“The Agency and City contend in the lawsuit that the recent actions of the defendants thwart the letter and spirit of the LDA, unjustly enrich the defendants, and constitute unfair trade practices. The public parties to the agreement, invested a substantial amount of thought, time, effort and expense in designing a development plan with the Approved Redeveloper for this site. The LDA sets forth the duties and responsibilities of the parties in realizing that objective.  This legal action intends to uphold the integrity and the contractual validity of the LDA, by invalidating the defendants’ actions. The defendants’ action sought to willfully undermine both the City and the Agency’s ability under the LDA to protect the public’s significant investment and interests in this project. The Agency and City believe that enforcing the LDA is of great public importance and is crucial to ensuring that the ultimate site development realizes the intended public benefits that were agreed to by the parties.”

“It’s because I’m winning,” Milligan said.  “Mario is scared,” he alleged.

“They were violating my civil rights. We spoke up very loudly about it,” Milligan said. “We were preparing to bring a civil rights complaint against Mario, the City, Darin (Callahan), others and we are not surprised that they withdrew the fraudulent transfer portion of this. They may bring other stuff. We are prepared to defend it. It’s a big waste of everybody’s time and money.”

Coppola in an evening email called Milligan’s comments completely untrue.

Milligan in August claimed Callahan, Assistant Corporation Counsel, told Assistant Building Official Leo Guerrero to void Milligan’s demolition permit for 21 Isaacs St.

Callahan has not replied to an Aug. 17 email from NancyOnNorwalk seeking a response to the allegation.

The City and the Norwalk Redevelopment Agency on June 18 filed an application for a prejudgement remedy and hearing.  The filing alleged that Milligan’s Wall Street Opportunity Fund LLC and Olson’s ISLR Owners LLC had violated the Land Disposition Agreement for 21, 23 and 31 Isaac St., and 83 and 97 Wall Street, by transferring ownership from ISLR to WSOF without Redevelopment Agency approval.  The LDA is an agreement between the City and the developer governing how the properties must be developed.

The properties were all slated to be part of “POKO” Phase II and III.  Phase I has been stalled since mid-2016 and  Milligan recently dubbed it “the Tyvek temple” because it’s wrapped in Tyvek.

The joint City/RDA legal maneuver asked that the Stamford Superior Court garnish WSOF’s POKO property for $5 million.

“They brought a frivolous lawsuit,” Milligan said late Monday. “They claimed fraudulent transfer. On its face, that is bogus, completely bogus. Mario was personally liable for that one. That coupled with his other actions was building a very nice civil rights action. So Joe Williams got involved, spoke to my attorney, and sternly suggested that they withdraw that fraudulent transfer, and then a few days later it’s withdrawn.”

Milligan and his attorney for the case, David Rubin, on Sept. 7 requested a meeting with Attorney Joseph Williams, a partner at Shipman & Goodwin LLP who was retained to represent the Redevelopment Agency, and Sheehan, Milligan said. That didn’t happen, but Rubin told them the fraudulent transfer claim was bogus and “they’d better be careful,” basically saying, “I don’t want it to escalate but it will escalate very soon if you don’t withdraw that,” according to Milligan.

The Common Council and the Redevelopment Agency each held an executive session about the lawsuit last Tuesday, Sept. 11.

A trial was scheduled for Sept. 25. Milligan on Friday filed a motion asking that the matter be moved to the complex legal docket, given the complexity of the LDA. The action was withdrawn Monday.

Coppola, speaking to NancyOnNorwalk late Monday afternoon, said that wasn’t a lawsuit but an action seeking a remedy. That was being withdrawn and a lawsuit was filed, with the input of Williams, he said.

“I don’t want to fight a legal battle.… What do I win?” Milligan said.  He added that a successful civil rights action would be lucrative but, “I don’t want to do that, I don’t want to punish the City, I want to do business here.”

Coppola in a late evening email wrote:

“There is absolutely no truth whatsoever to Mr. Milligan’s assertions.  Today the Agency and City served Mr. Milligan and other defendants with a lawsuit for knowingly violating the 2007 Land Disposition Agreement, and other agreements, concerning the POKO project.  The lawsuit that was served today replaced the application for prejudgment remedy that was previously pending against the defendants.

“Just to be clear, an application for prejudgment remedy is a pre-commencement proceeding, meaning an action that is filed for the purpose of freezing a defendant’s assets in anticipation of filing a lawsuit.  After discovering additional information and evidence, the public parties decided to just go forward immediately with serving the full lawsuit today.  The lawsuit effectively seeks the same relief as the application for prejudgment remedy, but adds additional claims for relief and defendants.

“It seems as if Mr. Milligan is trying to spin the story regarding this lawsuit in order to avoid any focus on the actions of the defendants as alleged in the lawsuit.  We are not going to engage in a pointless back and forth with Mr. Milligan.  The lawsuit speaks for itself.”

“I’d love to have a discussion,” Milligan said late Monday. “We get so stuck in little legal wrangling and the positioning, and we lose sight of the bigger picture. We never get to talk about the big picture.”

The City could have withdrawn the legal action and discussed the issues with him before filing a new lawsuit, he said.

Milligan was previously sued for a Norwalk real estate action, when the Norwalk Public Library Foundation appealing a Norwalk Zoning Commission approval for apartments he planned for Mott Avenue. That lawsuit was settled in January.

“They insist on keeping me under lawsuit so that they don’t have to be exposed for being completely useless and incompetent,” Milligan said. “I’m winning at their stupid game, I don’t want to play lawsuits. I am winning this stupid battle, they are choosing to have this stupid battle here. I would much rather have a battle of ideas. I welcome anybody, and I’ll take 10 of them, put their ideas over.”

Citibank owns POKO Phase I after foreclosing on the original developer.  City officials are working with Citibank to try to restart the project. A deadline looms.  Sheehan said in emails obtained through a Freedom of Information Act request that Citibank’s preferred developer JHM wanted to get changes approved while Gov. Dannel Malloy was in office. There’s also an issue of tax credits expiring in November.

Milligan in June asked to be considered as the redeveloper for POKO Phase II, which was approved in 2007 under then-Mayor Alex Knopp.

“If their idea is still to have that tired, 20-year-old shitty plan, then fine, I don’t have a problem discussing that,” Milligan said Monday. “It’s got a pretty good track record so far. Four Mayors, millions of dollars, no parking, white Tyvek building sitting there, bankrupt, foreclosed on and no end in sight. Awesome. What’s the excuses? They want to hide, they want to crawl under a freaking rock, and that rock is the court system. They can hide, they can be quiet, they can say, ‘We can’t talk, it’s in the court system.’”

Milligan and City officials have been at odds since the purchase.  A source told NancyOnNorwalk in June that Mayor Harry Rilling was unlikely to speak with Milligan again after being assured by the developer on May 31 that he wasn’t going to close on “POKO Phase II” the next day, only to find out that Milligan had already bought the properties when the comment was made.  When the City filed its original court action, Milligan’s early response included insults directed at Rilling.

18 comments

Sid Welker September 18, 2018 at 5:17 am

Milligans name calling and choice of wording should indicate to City officials that an alternative form of negotiations would be more suitable. Put him in a time out or take away his favorite toy, a.k.a social media.

Lisa Brinton Thomson September 18, 2018 at 6:54 am

Mr. Welker, This is where we disagree: The ‘spinning’ is being done by the city. Does City Hall think residents have amnesia? I’m sure they are hoping. Consider the following:

1. The mayor and Common Council grant ‘extensions’ in 2014 to Olson on what was widely viewed as a financially ‘ill conceived project’ from day 1.
2. The city looks to Hartford ‘aka’ the Democrat Party machine for a ‘nice’ developer and generous campaign donor, who they can ‘hand’ the project over to – along with more Norwalk taxpayer money to ‘salvage’ the project.
3. The city sues a local developer (who has not donated campaign funds and wants no taxpayer money, just updated P&Z regs) and who is already fixing up those buildings which are salvageable in Poko, has found tenants – a dentist, but told by P&Z that dentists offices aren’t allowed on Wall Street – but (apparently longstanding burnt out buildings are.)
4. Residential neighborhoods continue to be assaulted – the latest being West Norwalk and the nursing home – not to mention what South Norwalk repeatedly endures in their ‘light industrial zone’ while illegal, untaxed apartments abound…

You can’t make this stuff up. We are facing a budget crisis with the schools (again) and City Hall’s political machine continues to squander P&Z revenue in lawsuits while wanting to give away $15m in tax credits to more friends, instead of promoting core city growth.

They do this while simultaneously destroying local property owners home values, neighborhood by neighborhood – thus diminishing the grand list, while a few take the money and run.

… but it’s Milligan who is spinning to avoid focus. I’d say he and NON are making the situation crystal clear.

cc-rider September 18, 2018 at 7:19 am

“If their idea is still to have that tired, 20-year-old shitty plan, then fine, I don’t have a problem discussing that,” Milligan said Monday.

What more needs to be said???

Jason M. September 18, 2018 at 7:39 am

Slight clarification. My attorney did 2 things:
1st he explained how dangerous the fraudulent transfer claim was-He explained that it would be the 1st piece of evidence in the multi million dollar civil rights lawsuit we are building. He strongly suggested they withdraw that claim. He spoke to Darin, Mario & Joe. Incidentally, public immunity is gone in a civil rights lawsuit-Darin and Mario could be personally liable for their actions. Treating me differently than others. Enforcing rules differently. Blocking my ability to do business…
2nd He requested a meeting with Joe Williams and Tim Sheehan to talk about solutions without Mario’s interference. {…} They ignored the meeting request. Held 2 secretive executive sessions. Then abruptly withdrew their bogus lawsuit.

Now they have filed a magical lawsuit where they get to make up new rules that they wish they had written in the original LDA.

The “public documents” LDA, LDA amendment, LRA, LRA amendment blah blah blah. I read those documents very carefully before I bought the properties. They are long and unnecessarily complex. What is absolutely clear are the 5 pages that describe what the city & RDA should do in case of an unauthorized transfer. They are supposed to follow the protocol in the documents. The problem is they don’t like what the documents compel them to do, so they are inventing other remedies and distracting with long-winded lawsuits. One of the remedies is the city can buy the parking lot back from me for my cost. If they want it just buy it back.

In other words the documents they are accusing me of not following–they are refusing to follow. Ironically, they are in breach of the agreement! Not me.

Edited to remove speculation regarding the identity of an anonymous commenter, a violation of the comments policy. https://www.nancyonnorwalk.com/comment-guidelines/

Jason M. September 18, 2018 at 7:50 am

Newsflash The city has NO plan for POKO!

Their ideas have been proven terrible for almost 20 years. It is okay to admit failure. Then we can move forward.

Failure does not have to be permanent.

Success for Wall st is very possible. It also does not have to be complicated or expensive, and it doesn’t need tax payer subsidy!

It will happen easiest if the government gets out of the way.

I am not looking to do anything crazy or out of step with the desire of the people. It is amazing how hard the city is fighting to keep the status quo. The status quo got us the Tyvek Temple!

Patrick Cooper September 18, 2018 at 8:14 am

Just peeking out for a sec.

Even the low information voters in Norwalk, the dimmest of bulbs, know the authentic nature of a paid-for lawyer, especially one with skin in the game. So, we gullible citizens should surely take Mario for his word, I mean – what reasons might he have for bending reality to fit the desirable city-hall narrative? Try to keep it concise, like under 20 issues. Like Lisa did.

POKO will surprise all those angry advocates – including me – with how this project will shape the dynamic of Norwalk’s future. Because for all the volcanic disaster this testament to gross city-hall incompetence has bestowed onto Wall Street denizens, and all the Norwalk taxpayers and residents alike – it has afforded the opportunity by the 4th estate (primarily NoN) to shine an uncomfortable level of light on their shenanigans. Mr. Milligan is right – this lawsuit isn’t about anything except the proverbial nature of cockroaches when you turn on the lights. I mean two “executive” sessions? That transparency, information and insight can be helpful to the voters when deciding how to change management in 2019 – and by doing so – the fortunes of this city.

Yea yea Harry didn’t create POKO – but what exactly has he done to lead any remedy? 5 years and counting. Don’t give me weak mayor – strong council – every action by the current 14 party-affiliates (save a vote here or there) has been abject capitulation to the machinations of this man and his true consiglieri – Ed Camacho. It’s been instant thumbs up to every shady deal and ready-fire-aim proposal, and know this – that innovation district is going to be force-fed to the electorate because his developer donors expect that quid-pro-quo. Hello Norwalk – this isn’t about right/wrong – this is about party. Don’t think so? Drive Wall Street today – seriously – and look at the Duleep building (I saw it this morning) – 100% boarded up still – with that August finish another empty promise in our 1-week news cycle town.

(https://www.nancyonnorwalk.com/2018/07/norwalk-roundup-snail-set-to-reach-finish-line/)

I guess you must be a democratic party operative to receive that kind of ordinance myopia, the very best city-hall can manage. In the district where our ordinance chair calls home {…} Compare & contrast: the one who takes active steps to develop we take to court; the one who does nothing – we look the other way. Ask yourself, why? You know why.

No – the key to the future of this city is for a committed, competent, experienced and supported leader across all spectrums and neighborhoods of this city – to lead us in a new direction. Professional management, and the political will to break the decades of cronyism that has baked this hole in the county. But we have a major challenge, we surely do. We need a whole new council. We need to say bye-bye Harry, and with him – take deputy mayor King and Mario with you. But where among Norwalk’s best and brightest (who don’t also happen to be part of the insider’s gang) will we find these competent, hero volunteers? That is the question that needs to be answered in the next 6 months.

Edited to remove an apparent allusion to an alleged personal relationship, a violation of the comments policy. https://www.nancyonnorwalk.com/comment-guidelines/

Sid Welker September 18, 2018 at 8:18 am

100 percent of Norwalkers would agree that we’d like to see something done with Poko. It’s been long enough BUT blaming the current administration for striking that deal when they weren’t in office during that process is getting lost in the shuffle. For the record that was Moccia and his staff. This isn’t a cut and dry situation with owners going bankrupt and passing away. Then others step in and purchase an essential piece of the puzzle and screw things up even more. That action also hinders another developer from finishing Poko if they wanted to. So the saga continues…..

Jason M. September 18, 2018 at 8:50 am

Super Mario points out that temporary parking must be provided during Poko construction! That never happened. Citibank has owned POKO I for well over a year. They are in are in breach all over the place!

No temporary parking.
No valid zoning permit.
No plan to move forward.
Never met the required timelines.
They have half of Isaacs st closed down.
Nothing but blight!

Why isn’t Super Mario recommending that the city sue the Citibank?

I bought the properties in May. I already have 2 lawsuits!

I was not bound by the public documents until I became owner. There was clearly a default by the old owner. He committed an unauthorized transfer. The city has very remedies that they must pursue.

I am bound by the agreements on the land records. I am in compliance with the agreements and I have been since I have owned the properties.

I am required to provide 88 public parking spaces on the Leonard St lot. I am providing 120!

Did anyone notice the 1st thing I did was to reopen 80 spaces on my lot? Spaces that had been blocked for years!

Piberman September 18, 2018 at 9:28 am

Norwalk will never secure a major business sector without demonstrated “competence” at City Hall. Putting the burden of financing City outlays virtually entirely on homeowners. Forever. It may come as a surprise to City Hall Administrators but major business interests really do pay attention to how City Hall operates. And the City’s reputation is not encouraging. Not by a long shot.

Nancy September 18, 2018 at 10:26 am

…Meanwhile, Stamford thrives – new units under construction. Parks renovated and in full use. Garbage appropriately picked up. Why so much extraneous spending on law suits? These will help our city’s downtown: 1)add more trees along Wall and River Streets, 2)One way street with angled parking (like every other town in Fairfield County). There is room. 3)Hang holiday lights. 4) Water the tree basins for heavens sake. They are filled with garbage most of the summer while odd planters in back alleys are taken care of by the City. 5)Install an ordinance that requires garbage pickup from the backs of buildings, not the front. 6) Re-open the train station. There is certainly enough density in this neighborhood to support a stop on the Danbury line.

Gypsy September 18, 2018 at 10:50 am

Since when are dentist’s offices “not allowed” on Wall Street? When I was a kid, I went to Dr. Gross, whose office was on the second floor of the building at the corner of Wall & Isacc, opposite the Merchants Bank. He had been there for DECADES.

Jason M. September 18, 2018 at 11:44 am

Dentists are not allowed on the 1st floor currently. RDA & Zoning agree it should change but will change in time for the dentist that wants to open now?

EnoPride September 18, 2018 at 1:38 pm

I wish the City Hall gang would focus their energies on more worthwhile projects than ensnaring Mr. Milligan. It is so obvious that this shady, secretively crafted situation has become a witch hunt. The sad reality here is that the time dedicated to this witch hunt is counterproductive to the City of Norwalk’s progress. City Hall is deflecting from the true mismanagement problems which have hampered the Wall Street area over decades, which are: selling out to developers at the expense of the residents, lack of proper planning and zoning enforcement, lack of economic development, and seriously unacceptable blight deserving of a mass public protest. The Common Council could step up here, find a voice, and better represent Norwalk residents.

POKO I, aka the Tyvek Temple, is the blinkin’ beacon of City Hall mismanagement. None of this mismanagement and flat out neglect has been at the hands of Mr. Milligan… How ironic. I drove by the area the other day to see how POKO I and it’s surrounding landscape was looking and aside from being seriously concerned about the physical condition of that unfinished structure and it’s repercussions to surrounding businesses’ progress (Rat spottings, anyone?), I was appalled and saddened overall by how there seems to be no proactive plan (at least no plan shared publicly), no accountability and no sense of urgency to address this neglect.

Meanwhile, POKO I’s footprint has swallowed up what could have been a well planned out enclave of commerce and creativity and culture with thriving businesses flanking either side of Pontos Taverna and Garden Cinemas (Don’t those businesses deserve smart city planning, aka an “Innovation District”? Can we have a vision here instead of a giant box building?) if we had a more progressive minded group in place all these years which actually PLANNED in a style more befitting of the locale. There is already an apartment complex by Garden Cinemas and there are the Head of the Harbor apartments, so why did we need more apartments at that location, when we could have had great businesses and a nice outdoor public space incentivized to go in there?

One could argue that City Hall in how it is pro blight (if you ain’t aggressively addressing blight over decades, then you are pro blight), pro no economic commerce/development in Wall Street (if you don’t have a defined PLAN visually mapped out methodically with prospective (catalyzing placemaking) placeholder companies/zones/clusters allocated (actually turned a great business called City Windmills away) after a year of so called planning of Innovation District, then how are you pro economic commerce/development?) and pro selling out to big development and favored developers to the detriment of taxpayers, school systems, etc., is more deserving of being sued than Mr. Milligan is.

See interesting article below:

http://www.smdp.com/residents-sue-city-hall-over-development/132905

Can we drop the pettiness of suing Mr. Milligan and move on? Nobody’s perfect. The public stakeholders want to get back to planning an “Innovation District”, which only recently evolved into less of an “in theory” concept ordinance talked about for a year, and more of a work in progress, going in the right direction with strong residents’ input at a public hearing with the Common Council and the public’s passionate suggestions being thrown around here on NON. I am glad Mr. Livingston finally heard us and acknowledged us for some great ideas. I think (I hope) he realizes the tremendous value of the residents’ input. Let’s keep moving in the right direction, together. Norwalk deserves Excellence. Let’s play nice and get back to work.

David McCarthy September 18, 2018 at 2:52 pm

I need to note that Attorney Williams was also heavily involved with the trashing of the city’s case against the baseless claims of religious discrimination with respect to the zoning commission’s denial of the mosque application.

Rather than representing the people of the city, as the expert in RLUIPA tried to do, Atty Williams, in my opinion, railroaded the zoning commission into an ill-advised settlement that lead to the city, via the council, having to buy out the mosque group and pay more on top.

Norwalk went from having the strongest case the RLUIPA attorney had ever see to one that she recommended we settle immediately or we would lose because of the perceived mishandling of the case by Mario and Williams. So, I wouldn’t bet on a great outcome here.

Mitch Adis September 18, 2018 at 8:46 pm

Its abundantly clear, this is a personal vendetta against Jason Milligan. City Hall is never this fast to act against anyone! A developer tore down a historic building right across from City Hall back in 2005 (124 East Ave). City Hall did nothing! There are so many examples it will make you vomit.

EnoPride September 19, 2018 at 10:45 am

I agree, Mitch Adis. City Hall’s hyperaggressive approach on going after Mr. Milligan is in stark contrast to their passive inaction or flat out oblivion (dangerous oblivion which hurts neighborhoods) in many other more pressing scenarios. The irony is, the more time City Hall takes on stewing over and crafting this lawsuit against Mr. Milligan, the more crystal clear this becomes. Perception is reality and many’s perception is that City Hall is unable to admit accountability for the failure of POKO I, so rather than cutting their losses, focusing their energies on moving forward and properly, comprehensively planning an Innovation District, they are expending time and our money on meticulously crafting a scapegoat in Mr. Milligan. Doesn’t look good.

john flynn September 22, 2018 at 9:02 am

The City got it wrong the first time. I urged Jason to countersue and have Povodator recuse himself. So the City went and re-filed the second writ which is substantially worse than the first writ. When Citibank took over, it changed the tri-party agreement.

The City clearly drafted a document that was not properly perceived and provided no protections for itself.
That is not Jason’s problem. So to save embarrassment and save face from the bad decision they made two more bad decisions.

Jason you should have opened a proctology office not a dentist office to adequately service the law department.

Johnny Best of luck. I can help. I will help in other ways.

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