Milligan, City officials meet; Milligan claims transfer negates lawsuit

Updated, 6:37 a.m.: Copy edits, new headline; 6:51 a.m.: Copy edit

NORWALK, Conn. — Developer Jason Milligan discussed Wall Street redevelopment with City officials Friday, then requested that a lawsuit against him be withdrawn.

Milligan in an email said he met with Mayor Harry Rilling, Assistant to the Mayor Laoise King, Corporation Counsel Mario Coppola and Assistant Corporation Counsel Brian McCann Friday afternoon to discuss ideas for Wall Street redevelopment.  Milligan and City officials have been at odds since Milligan misled them regarding his plans to purchase parts of the stalled Wall Street Place development, with the City filing a lawsuit claiming damages and seeking to annul the purchase.

There was “some progress” during Friday’s meeting, “maybe a little healing,” Milligan said.  City officials declined to comment on Milligan’s characterization of the meeting.  Coppola in an e-mail said that “representatives from the Agency and City have been continuously listening with an open mind to Mr. Milligan’s many ideas.”

After the Friday afternoon meeting, Milligan informed the City and Redevelopment Agency that he has taken a legal action – a deed-in-lieu property transfer – that he said made their lawsuit against him irrelevant.

Milligan was served one week ago with a lawsuit seeking an injunction and damages related to his May 31 purchase of Wall Street Place Phase II and Phase III properties via Wall Street Opportunity Fund LLC, which he controls.  The lawsuit contends that Richard Olson of POKO Partners violated the Land Disposition Agreement (LDA) on the properties when he sold them to an entity controlled by Milligan, and seeks to have the sale annulled. It requests $5 million as a prejudgment remedy, to be attached to the five properties involved, three parcels on Isaac Street and two on Wall Street.

Milligan is managing member of Wall Street Opportunity Fund LLC. He has been requested to be in court Monday for the first conference in the case.

ISLR Owners LLC, controlled by Olson, took out a construction loan on the properties in 2015, when construction began on Wall Street Place Phase I. The $5.8 million note was issued by MC Credit, then transferred to CC Rivington, then to Komi Ventures.

Milligan is managing member of Komi Ventures, which was established in April 2017.  Therefore the property transfer announced Friday would be from an entity controlled by Milligan to another entity in which he is also involved.

On Friday, Milligan informed the Redevelopment Agency and the City that Komi has issued a notice of default on Wall Street Opportunity Fund and that a deed-in-lieu property transfer is in the works. Milligan requested that the Agency and City waive their 90-day period to issue an objection, and allow the title transfer to take place as soon as possible.

“Given the Deed-in-Lieu transfer would lead to your lawsuit against Wall St Opportunity Fund, LLC being irrelevant I respectfully ask that you to withdraw it prior to the status conference Monday, or at least remove Wall St Opportunity Fund, LLC as a defendant,” Milligan wrote in an email to officials.

The City waived the 90 days for Citibank when it executed a deed-in-lieu on POKO for Wall Street Place Phase I, Milligan wrote, asserting, “Given the precedent for a Poko ‘Lender’ completing a Deed-in-Lieu transfer we expect a similar and speedy process.”

Milligan, in a phone call to NancyOnNorwalk, said that the City could elect to pay the $5.8 million note and acquire the properties.

“Here I am, willing to discuss all the solutions, including selling parts of it, including working with them,” he said. “It’s getting harder and harder and less and less likely to work with {developers John and Todd} McClutchy and Citibank on some of the aspects of the transaction but the main point is why are they picking winners and losers? Why are they favoring one developer and one lender over another? Why are they treating them completely differently?”

Milligan said he shared some of his ideas for the Wall Street area during the discussion Friday in Mayor Harry Rilling’s office.  The meeting was the first time Milligan has spoken to Rilling since the May 31 meeting in which Milligan admits he made misleading statements. When asked if he would close on the properties the following day, he said no, but he had already closed on them, both sides agree.

Rilling did not reply to an email asking for his opinion of the meeting.

Coppola in an email wrote:

“The Agency and City had certain legal rights under the LDA which were violated by virtue of the recent transfer of the Phase II and Phase III properties to an entity controlled by Milligan.  Therefore, the Agency and City filed the subject litigation.  Over the past few weeks, Mr. Milligan keeps trying to argue his case in the press.  The City is not going to further comment in the press regarding the pending litigation, but rather allow these legal claims to be appropriately decided by a court of law.

“In the meantime, representatives from the Agency and City have been continuously listening with an open mind to Mr. Milligan’s many ideas regarding what he believes should be done with the future development of all 3 phases of the POKO project.”

Milligan described the Friday afternoon meeting in an e-mail to NancyOnNorwalk:

“Laoise & Brian were measured and results oriented. … The meeting was scheduled by Mario ‘to explain the steps I needed to take to become approved as Redeveloper for Phase II’. Nobody was present from the Redevelopment Agency. Page 75 of the LDA states ‘The granting or withholding of such consent (of development rights) shall be within the Agency’s sole discretion, except that the Agency may not act arbitrarily, capriciously, in a discriminatory manner, or otherwise in contravention of law.’”

He called it “ironic” that all parties weren’t present, referring to a statement made last month by Rilling:

“We have always been and continue to be willing to sit down and discuss this development with him, but Mr. Milligan needs to agree to that meeting with all parties present. Instead, he insists on having multiple side conversations with city employees, which is counterproductive to moving this project forward.”

The Connecticut Secretary of State’s website lists Milligan as managing member of Komi Ventures, but OpenCorporates.com, ctcompanygo.com and Bizopedia.com list Marc J. Grenier as the agent. Cross references indicate that this is the same Marc Grenier who serves as an attorney to the Redevelopment Agency.

Grenier did not reply to an email asking about his involvement. Coppola did not reply to a follow-up email asking about Grenier.

“It is no secret that Marc has been my attorney in past matters. Unfortunately, he is not my attorney currently because he is a good attorney,” Milligan wrote in an email. “He is also not agent for Komi. CT Secretary of State has up to date info.”

Redevelopment responds to Milligan

The Redevelopment Agency on Friday formally requested information from Milligan, in response to his offer to build “POKO Phase II.”

Milligan’s firm must show it has the “necessary development experience and financial capacity to complete the development as intended,” Sheehan wrote, further explaining that “the public parties are particularly concerned with the qualifications and identity of the Redeveloper, including its members, shareholders and/or investors, with whom the public parties contemplate doing business with and upon whom they will ultimately rely on to undertake the development obligations.”

That and other information is requested to be provided in 90 days.

“He is asking for 90 days to review that, I am thinking this seems really complicated,” Milligan said in a phone call to NancyOnNorwalk. “Eventually they will see that but in the meantime it’s going to slow us down. Let’s talk about the end result, what we want to end up with and then we can work through some of that other stuff.”

Sheehan’s letter was delivered to Milligan in a 4:57 p.m. email. Milligan is expected in court at 9 a.m. Monday.

“The Agency, when considering the transfer of development rights is required to consider the LDA and the approved CMSP {Conceptual Master Site Plan},” Sheehan wrote, explaining that scrutiny about credentials “is expected in any public/private transaction.”

The Agency has a third party consultant to “take into account the good character and reputation” of Wall Street Opportunity Fund, “ensuring that no individual involved with Wall Street or the entity have any felony convictions or are legally prohibited from contracting with any municipality.”

Milligan speaks of buying Phase II but has properties that are in Phase III. Sheehan’s letter details the expectations:

Phase II Improvements

• Parking Garage: 276 spaces of which 88 are dedicated to public parking
• Residential Units: 96 Units of which 20% are deemed affordable by the City of Norwalk
• Retail: 7,276 square feet of ground floor retail with the principal facade facing the street
• Live/ Work Space: 9,445 square feet of live / work space or other allowable zoning use
• Recreational Space: Occupant accessible roof top garden

Phase III Improvements

• Parking Garage: 337 parking spaces of which 60 are dedicated to public parking assuming the other phases achieved the intended number of public parking spaces
• Residential Units: 173 units of which 20% are deemed affordable by the City of Norwalk
• Retail: 14,607 square feet of ground floor retail with principal facade facing the street
• Live/ Work Space: 12,957 square feet of live / work space or other allowable zoning use
• Recreational Space: Occupant accessible roof top garden

Wall Street Opportunity Fund will need show its “experience related to other public/private development projects” and in providing housing, and its ability to meet the 20 percent affordable housing requirement, Sheehan wrote, further explaining that Milligan’s company will need to provide parking plans prepared by a consultant.

Milligan said he’d provide the financial details requested, when the time comes.

He continued, “When the time comes I plan to go through the necessary approval and vetting process that everyone else would.”

In an email, Milligan said, “​I have been involved in building quite a few things. That is not what I want to discuss at this point in time though. Building is not my favorite thing to do and there are people that are better at it than me. Smaller stuff and renovations I can handle in house. Bigger I prefer to hire or partner with an expert builder.”

“McClutchy might be building both of these. Maybe, I don’t know. I doubt it,” he said.

There’s no viable plans for any of the phases and he doesn’t think city residents want them, he said, asserting that a complicated process delays a healthy discussion.

“I think everyone agrees Phase I should get solved first. Especially since you might need parts of Phase II to solve Phase I,” Milligan said. “Let’s not limit our options for Phase I by running fast forward on Phase II.”

The processes will run parallel, with the deed-in-lieu working forward and then a response to Sheehan’s letter and the vetting process, he said.