Updated, 9:12 a.m.: Copy edits, revised headline
NORWALK, Conn. – Jason Milligan has pounced on a statement made by Norwalk Redevelopment Agency Executive Director Tim Sheehan as the basis for a motion to throw out the lawsuit filed against him by the Norwalk Redevelopment Agency and the City of Norwalk.
Milligan was expected to testify Thursday in the case, but the hearing was postponed due to a motion to dismiss filed Wednesday by Milligan’s attorney, David Rubin. In response to the motion, lawyers for Norwalk and the Redevelopment Agency have argued that the statement made last week by Sheehan is incorrect.
Sheehan said that the 2004 Wall Street Redevelopment Plan expired in June.
According to Milligan and Rubin, the foundation of the lawsuit is now invalid because the Land Disposition Agreement (LDA) at issue is invalid, as it was predicated on the expired 2004 Wall Street Redevelopment Plan. Therefore the case should be dismissed, they say.
Attorney Joseph Williams, representing the Redevelopment Agency, and Norwalk Assistant Corporation Counsel Darin Callahan in papers filed Thursday replied that the redevelopment plan did not actually expire after 10 years — it’s good for 20 years.
The plan was formulated in 2014 under State Statute 8-127, which at the time authorized a 20-year time frame. The statute was revised in 2007 to provide that redevelopment plans expire after 10 years, they wrote. The plan itself says it’s good for 20 years, they noted.
The damages inflicted by Milligan are not dependent upon the LDA, they say.
Milligan’s Wall Street Opportunity Fund LLC is being sued because it bought five properties that were slated to be used for Wall Street Place phase II and III from Richard Olson of POKO Partners, without first getting Redevelopment Agency approval, as required by the LDA.
Milligan, under WSOF and two other LLCs, is accused of unfair trade practices, tortious interference and unjust enrichment. Olson, under POKO derivative ILSR Owners LLC, is also being sued. The plaintiffs seek to reverse the sale and a hearing is underway on their request for a temporary injunction to prevent Milligan from leasing the properties or altering them.
Thursday’s events marked the 11th day of court hearings on the case. Legal costs to the Redevelopment Agency through Dec. 31 were $108,725.31, Sheehan said on Feb. 26. The budget statement included in the Agency’s agenda packet for this month states that the Agency spent $199,300 on legal fees through Jan. 31.
“The Redevelopment Plan upon which the underlying Land Disposition and Development Agreement is predicated has expired,” Rubin wrote to the court Wednesday, arguing that the case should be thrown out. “…the underlying LDA is conditioned upon, intertwined with, or otherwise dependent upon an extant lawful Redevelopment Plan.
Rubin states that the plaintiffs claim irreparable harm to Wall Street area redevelopment, as contemplated in the redevelopment plan. He lists five LDA “whereas” clauses that refer to the redevelopment plan. The LDA defines project parcels, predicated on the lawfulness of the redevelopment plan, he states.
Sheehan testified on March 6-7 that the statutory powers of the redevelopment plan are vacated during the period that it is expired, and agreed with Rubin that the agency would have to start from scratch to form a new plan, predicated upon a proposed redevelopment area meeting the requirement that 20 percent of its properties are blighted.
Milligan has been arguing that the Agency’s determination of blighted properties is invalid.
“Applying the law to the facts at hand, it is clear that the LDA cannot be lawfully enforced without reference to the Redevelopment Plan, which has expired as a matter of law,” Rubin wrote in the motion to dismiss. “Accordingly, Plaintiffs’ causes of action have been rendered moot, and the instant Motion to Dismiss should be granted.”
“The Milligan Defendants are simply wrong. By its terms, the Redevelopment Plan is in effect for a period 20 years,” Callahan and Williams replied.
The “whereas” clauses are nonbinding and “there is no provision in the LDA that states that the LDA is unenforceable if the underlying Redevelopment Plan expires,” they wrote, arguing that the charges against the Milligan Defendants – unfair trade practices, tortious interference and unjust enrichment – are not dependent upon the LDA.
The state statute itself states that it’s applicable to redevelopment plans adopted after Oct. 1, 2007, they state, and the Redevelopment Plan in question dates to 2004.
“The LDA is a standalone document, enforceable on its own terms,” Williams and Callahan state. “Although the LDA references the Redevelopment Plan, the Redeveloper’s obligations under the LDA arise from the terms of the LDA itself and do not depend on the existence of the Redevelopment Plan. There is simply no basis for the Milligan Defendants’ assertion that the LDA would not be enforceable if the Redevelopment Plan had expired.”
Lee on Thursday morning cancelled the hearing that had been planned. Williams subsequently requested that it resume at 3 p.m.
Lawyers in court agreed to continue the case to March 26, so Rubin could reply to Williams’ reply, and then Williams could reply to that.
Rubin would be expected to argue any rebuttal in court, Lee said.
Callahan called it “very frustrating” that the hearing has “stalled out again” on what he feels is a “motion that should not have been filed,” with factors that “could have been identified by just reviewing the statute.”
“It took me, your honor, a half hour,” Callahan said.
“(The) Supreme Court has been very clear about this, this (hearing) is not an investigation into the full merits of our case,” he said. “We don’t have to go to the ends of the earth to prove the elements of injunctive relief and this is by far the longest injunction hearing I have ever been involved in.”