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Stamford judge rules against Milligan: ‘POKO’ lawsuit to continue

Real estate broker Jason Milligan talks to his attorney in March in Stamford Superior Court.

NORWALK, Conn. — Jason Milligan’s request to have the lawsuit filed against him dismissed has been denied.

Judge Charles Lee on Tuesday ruled against the motion to dismiss filed by Milligan’s attorney, David Rubin, in the lawsuit filed by the Norwalk Redevelopment Agency and the City of Norwalk against Milligan and three of his legal entities. The plaintiffs allege that Milligan wrongfully obtained control of, and encumbered with debt, properties that were slated to become part of Wall Street Place phases II and III, violating the Land Disposition Agreement (LDA) for the properties, the 2004 Wall Street Redevelopment Plan and State Statutes. They are asking the court to nullify the property transfers, financings, and leases, and a temporary injunction to prevent Milligan from selling the properties.

“{M}y motion to dismiss was denied on a technicality today,” Milligan wrote Tuesday afternoon.

Milligan had argued that since the 2004 Redevelopment plan has expired and been replaced by a significantly different plan, the Wall Street-West Avenue Neighborhood Plan, in March, the lawsuit is invalid. The technical description of this is “the court lacks subject matter jurisdiction over the case.” The plaintiffs said Milligan’s actions took place while the 2004 plan was still valid and argued that the 2019 plan is an extension of the 2004 plan.

In their lengthy reply brief, the Milligan defendants did not address the contention that his actions took place while the 2004 plan was in effect, Lee wrote, calling the omission a violation of the legal practice book.

“The City and the Agency seek remedies for various violations that occurred prior to the amended expiration date of the 2004 Plan and any impact on the LDA,” Lee wrote. “Plaintiffs have a right to do so, and the court plainly has subject matter jurisdiction to hear their complaints. Consideration of the merits of the plaintiffs’ request for a temporary injunction must await the conclusion of proceedings relating to the request for injunctive relief.”

“In the denial, Judge Lee got a few things right, but the merits of our argument was ignored; ‘Mr. Sheehan testified on the stand that the 2004 Plan had been amended and had expired or was replaced as of June 2018…’” Milligan wrote. “Unfortunately the 2004 Plan expired a few days after I purchased the properties.”

A date for a status conference will be announced.

 

‘Taxpayer money wasted on legal fees’

The Redevelopment Agency’s legal bills for the lawsuit were $553,699.52 as of June 30. The Agency retained Shipman & Goodwin Attorney Joseph Williams to represent it in the case.

Milligan wrote:

“Judge Lee’s ruling is disappointing mostly because it might give Crony Joe false hope that he could somehow justify the $750,000 of taxpayer money wasted on legal fees based upon his bad advice. There is zero reason to continue enriching Crony Joe and his large Law Firm. There is absolutely no imminent or irreparable harm.

“From the beginning, the only way to a timely worthwhile solution to the POKO mess is through open, honest discussion and negotiation.

“Recently there has been ongoing conversation between all relevant parties. Hopefully that communication can continue. It cannot continue while enormous legal battles are simultaneously taking place.”

 

Corporation Counsel Mario Coppola replied:

“Mr. Milligan has engaged in a legal strategy aimed at delaying the case from getting adjudicated by the court and running up the cost of the litigation through continuous and well-timed motion practice challenging the court’s jurisdiction. The case was stopped to a grinding halt every time that Mr. Milligan filed a motion to dismiss challenging the court’s jurisdiction.

 “Today the court ruled in favor of the City and Agency, and denied Mr. Milligan’s most recent motion to dismiss the case. Today’s ruling was the second time so far in this case that the court denied a motion to dismiss filed by Mr. Milligan. Now the City and Agency will continue to learn a lot more about what has transpired through the discovery process, and will ask the court to enter appropriate relief based on the evidence that we present at the pending injunction hearing and then the trial.”

 

17 comments

Jason Milligan September 10, 2019 at 8:33 pm

The court most certainly did NOT rule in favor of the City and Agency today.

The judge latched onto a technicality to kick the can down the road.

There are at least two other motions to dismiss filed by other defendants in this frivolous lawsuit that have yet to be ruled on and there is likely at least one more coming all before the actual case even gets to trial.

Everyone should understand that this lawsuit was initiated by the City and Agency, NOT me. It is them that withdrew their 1st ridiculous lawsuit, and them that amended this most recent lawsuit multiple times. I have responded accordingly but I have always recommended against litigation.

This lawsuit has barely gotten started and it has cost the tax payers $750,000.

I am very interested to find solutions to the POKO mess through cooperation and dialogue.

Litigation should be the last resort.

I truly hope that the City and Agency can take a pause.

Let’s continue talking and see what happens. What is the danger of talking?

Everybody loses with litigation except the attorneys!!

Lisa Brinton September 11, 2019 at 8:01 am

While spending millions suing one developer (with our money) continues, the mayor gets ready to line the pocket of another.

What’s happening with JHMs $6m developer fee, 15 year tax credits and tearing down the Garden Cinema? It’s all gone quiet. We were due an update at the Common Council yesterday? Buried until after the election?

Will the mayor be discussing the other eyesore in town, the looming $1b Boondoggle Walk Bridge at his fundraiser on Sunday with the Governor? In return for years of disruption, Lockwood Mathews gets AC!!! Then there is the Mall. The trifecta of poor leadership, horrendous negotiations on behalf of the residents of Norwalk and bad land-use in the center of our great city.

john flynn September 11, 2019 at 8:14 am

You need a thorough understanding of the many other cases the City has mishandled to know that the contracts written were flawed from the get go and had no contingencies for the death of the first partner. Then you need to understand how the discovery and depositions are you used to keep out the evidence on the past of the Judges appointed by Malloy to keep the DNC flush with cash for upcoming elections. There is no constitution in the constitution state. No rule of law, only lawyers collecting fees for partners in law firms making campaign contributions to control the making of the laws, the interpretation, and the enforcement of the laws.

The Fix is in.

Bobby Lamb September 11, 2019 at 9:38 am

I guess Lisa would drop drop the suit against Milligan? I really don’t get her or where she’s trying to go with this argument. She would ignore the fact that he basically stole land owned by the tax payers, took away the parking for POKO thereby forcing Citibank to use the garden cinema site and taking away a landmark? Oh – and by the way the developer in question is her biggest donor? Just ignore that and move on? The Mall? Where would she have come up with someone else willing to invest HALF A BILLION dollars in Norwalk? She would have chased them away? Left a dirt pile for another 20 years? She loves to criticize but I shudder to think what this town would be like with someone like her in charge. And don’t get me started on her crew. Can you imagine a City Hall staffed by her supporters?

Lisa Brinton September 11, 2019 at 9:44 am

One word Bobby – Citibank. I said it two years ago and I’ll say it again. Why is the mayor making residents bail out a bank?

Michael McGuire September 11, 2019 at 12:26 pm

Bobby Lamb, please review the past to understand what is happening and how it will impact our future. For instance POKO

Past –

RDA uses a viable technique of levering existing City assets, like the Isaacs Street Parking lots, to create a nearly market rate (35 percent affordable) development which all in all was an OK/good thing.

However, through significant bungling/ineptitude and poor choices on the part of the RDA we end up with POKO/Olsen which while approved by CHFA (the gate keeper of Tax Credits) seemed to be lacking in follow up and oversite to protect the public’s interest. This as we all know resulted in what we have now.

Present –

Based on City/RDA’s (ineptitude, selfishness, corruption, mistakes, ignorance, misunderstanding, etc. call it what you will) We have:

1. A systematic takeover of the Wall-West Avenue Neighborhood area by RDA based on a falsified and highly inaccurate claim of blight in this area. The takeover was necessary to legitimize the LIHTC funding stack for the new POKO/McClutchey deal (but we all did not know this at the time).

This was so poorly handled that members of the public weighed in with facts and figures that were then roundly ignored by the City/RDA and the Plan passed to a collective jaw-dropping.

That began the law suits- 3 against the City/RDA.

2. POKO/McClutchey – A new 100 percent affordable project (wait Bobby – how and why did we go from 40% to 100%?) which RDA claims reflects the “public’s interest” however, the public was never invited to weigh in on this ‘behind closed doors’ deal. Didn’t Mario Cappola say they were not in negotiations only to role out the nearly completed plan a n=month or so later? Again, we the public, were screaming from the bleachers but it all feel on deaf ears at City Hall – seems like it still is.

There are many better solutions to this vexing POKO problem but the City choose to never address them or research them. Lord knows RDA had no interest in pursuing any other project type since that would not be in RDA’s best interest.

3. The law suites – one against Milligan and three others against the City/RDA for their heavy-handed, incompetent handling of this most public of projects. $750,000 to date and we are still in the first inning on this one law suite!!!! Nancy Chapman, what is the cost on the other three suites?

4. Then we get RDA’s attempt to push through, this past winter, a specialized tax incentive program for Wall-West Ave Neighborhood which only benefited big developers. This program almost exclusively required the assemblage of smaller buildings then demo them to create parking over which a project could be built – nothing else seemed to work – but RDA claimed it was in the Public’s best interest. This was more of the “business as usual in Norwalk” format. That took considerable efforts on the part of the WSNA and other public members to shoot down. But down it went.

5. Next up is POKO/McClutchy at 100% affordable yet at a cost that was $30 million more than what POKO McClutchy was gong to cost. Question Bobby – how does this one defunct project rack up $30 Million in added costs over a three year period? And more importantly, what are those added costs attributed too? Inquiring minds want to know. But again, we are not allowed to know.

‘Shut up and sit down, your betters have this all figured out’ is virtually the message I get from the City/RDA.

Not until the City/RDA/McClutcheyy were going to pull the plug on the Garden Cinema does the broader Norwalk taxpayer base finally take notice. I think the petition to stop the POKO/McClutchey/RDA plan regarding the GC is up to 14,500 signatures. That finally gave the City/RDA pause.

Background gathered:

Did you know that RDA/POKO/McClutchy has not even had this revised deal blessed by CHFA (the gatekeeper for tax credits)? That like getting pre-approved by the bank before you buy a house….so you don’t make a colossal mistake. Without the tax credits Citibank won’t “finance’ this project. So what RDA and the City Advisors have been telling us all along “no worries, the financing is all lined up” is false. Bobby….why would they do that?

The only people who will benefit from this project are Citibank and McClutchy who will make millions, and the City Advisors/Politico who will gain in political clout. Sadly, we the taxpayer will foot the bill for this.

Future prediction based on past performance-

City/RDA is successful in ceding control to McClutchey who then can not get CHFA tax credit approvals due to the staggering costs AND the on-going law suits. But this process takes 2+ years. So McClutchy moves to federal funding which will require a much higher level of tenant subsidies.

This of course will result in a huge drag on the economics of downtown since these tenants will not have the resources to patronize the local business establishments.

This all will play out over the next 10-20 years and who benefits? Citibank and Mcclutchey have made their money, so in the long run the benefactor is RDA – since they can continue to claim “blight”.

Bobby Lamb – ask questions and look for answers through the lens of “follow the money/power” it might just impact how you vote this November.

Final point – I could be completely wrong on any and all of the points I make above. But we won’t know that because the City won’t include us as part of the solution.

And for all you very few noisy folks that want to call me a “naysayer” please note I/we have a lot of solutions.

Jason Milligan September 11, 2019 at 12:29 pm

Here is the final line in the judge’s ruling:

“The court will schedule a status conference shortly to discuss a schedule for resumption of the hearings relating to the temporary injunction, IF NECESSARY.” (emphasis added)

The judge is an extremely intelligent and thoughtful guy. That is why he presides over “Complex Litigation” cases. He has extensive experience and knowledge of working with Redevelopment projects. He knows that POKO is a complicated trainwreck! He wisely took a long time to rule on this motion to dismiss, (to give the parties opportunity to settle…?)

He twice references the expiration of the 2004 plan.

He says we will only schedule hearings if necessary… Let’s take the hint.

Let’s continue the discussions. We are making progress and saving tax payer legal expense.

It is impossible for me to fight a complicated all consuming legal battle with one half of my brain while simultaneously be expected to be cordial & cooperative with the other half of my brain.

Right now I am using my whole brain to be cooperative. Although the Norwalk legal team is starting to make demands and file motions, which requires my time, attention and money to respond to.

This ruling is a minor detail in the grand scheme of things. The people in charge need to decide if they want to fight or cooperate.

I want to cooperate! But I will also viciously defend myself.

Nicholas September 11, 2019 at 12:46 pm

Lisa Brinton – enough. No one wants a negative attitude defining our city. Lead by example.

And once again, another bad headline for Wall Street.

Seems the only thing Jason Milligan has done for Wall Street was unleash a flood of bad press about the state of our street and of water into the businesses of hardworking individuals through illegal renovation work. Those businesses are still shuttered.

Paul September 11, 2019 at 1:55 pm

The likelihood of the judge granting Mulligan’s motion was remote because judges rarely dismiss cases, especially those that involve a municipality. The judge wants to avoid a protracted appeal process. So it is not surprising or a “big win”.It’s apparent he wants both parties to resolve the issue out of court. Milligan said numerous times that he was willing to discuss and negotiate. The city has never publicly said that they wanted to resolve the issue out of court. Instead the city choose to complete an ill conceived project without phase II and III and put a huge burden on the taxpayer. The financial viability of phase-I was probably predicated on the completion of Phase-II and III. Instead the taxpayers will bare the burden. The common sense approach would have been to resolve out of court the issue with Milligan and create a new financially viable plan with neighborhood feedback. Instead the city elects to go to court and spend legal fees. McClutchy won lotto because he gets millions dollars of fees with no “skin in the game”. Why?

Lisa Brinton September 11, 2019 at 2:03 pm

Nicholas: This is not about Milligan – although the city is using a lot of taxpayer money to blur the lines. I’m sorry you’ve been blinded.

The ‘growth’ supposedly putting Norwalk on the map is funded on the backs of single family homeowners.

I haven’t been fantasizing about being mayor since I was in high school however, as a concerned and active citizen, with a business and infrastructure background, I can read a balance sheet. Growth without revenue is called ‘debt’ and local taxpayers are paying for it! Actually, it’s called operating costs, because municipalities must balance budgets each year. We’re adding density and don’t have enough annual revenue to pay for it.

I represent residents – not the local political establishment. This administration allowed Norwalk to be ‘undefended’ and taken advantage of by the state and developers. Business growth = minimum wage jobs at the mall, new housing = ugly, monolithic structures that will look tired and dated in 5-10 years, and the cherry on top is an OTT Walk Bridge that will disrupt E. Norwalk and SoNo for years, change the skyline forever -and likely saddled taxpayers with an overage balance on the IMAX theater.

You want vision: have a mayor that promotes our schools nationally – get grants for the amazing stuff we’re doing despite getting stiffed by the state. Implement the third transportation system with cross channel shipping from Manresa. Put in scaled development, without tax credits and more in keeping with our New England, maritime character. Building a mall that looks like a container ship on turbulent seas doesn’t cut it! I could go on – but Harry will just ‘steal’ my ideas 😆

The city’s focus on Milligan as a source of our downtown woes is a distraction. Redevelopment took 20 years with 95/7. Wall Street ‘s problem pre-date his birth. Lastly, big picture in the current mayor’s office is a photo op printed above the fold of our local paper. I just think Norwalk deserves much better.

Michael McGuire September 11, 2019 at 2:15 pm

@ Nicholas,

Actually Jason has done more to spruce up and change the Wall Street area for the better than anyone else in my 2 decades here. That includes the RDA which, truth be told, did virtually nothing but maintained the blighted state of the properties under RDA control for a decade while those around them upgraded/renovated their properties.

Based on what I see, the bad press for Milligan was unleashed by the City/RDA. Have you ever sat down and spoken at length to Jason on substantive topics? My guess is you haven’t. If you had I don’t think you would make those comments.

Interesting point on the flooding. I’ve been involved with contracting for over 40 years and things like that happen. But it was cleared up ASAP. Unlike the RDA/City which burdened us with POKO these past 15 years with a ‘Duleep on top’ for the past 7 years. But hey it took RDA only 3 decades to get 95/7 to where it is today!

Regarding Lisa – to provide a solution you first have to define the problem. Not sure how else to do it.

Isabelle Hargrove September 11, 2019 at 2:32 pm

Nicholas, I agree, enough negative attitude towards our city.

Enough of a mayor and common council who believe that no developer would want to build anything in this city without huge tax abatements homeowner are expected to subsidize for the privilege of getting another fortress to look at and traffic to suffer through daily.

Enough negative attitude that Norwalk doesn’t deserve fair treatment in funding from the state.

Enough negative attitude that it’s ok to deface our coastline with a behemoth fortress bridge and get air conditioning for a museum for it.

Enough negative attitude that our residents don’t deserve to enjoy their beach before New Yorkers do.

Enough negative attitude that our entire Wall Street area is no more than a huge blighted area in the eyes of our RDA.

Mimi September 11, 2019 at 3:13 pm

Lots of stories deflecting from the real issues in the press lately. Meanwhile, Norwalk has an inspirational story not being covered – we have an Unaffiliated female mayoral candidate growing a coalition of D’s, U’s and R’s. She was recently interviewed on The Lisa Wexler Show, where Lisa W. said the good word was getting around about her. Why aren’t the Norwalk outlets finding her some air time?

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