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Village agrees to pay $180K to Grove family, law firm

by CJ Carnacchio

April 13, 2011

There are two things at the end of the litigation tunnel light and a toll booth.

Anybody got $180,323 in tokens?

Last week, the Oxford Village Council voted 5-0 to follow the terms of Oakland County Circuit Court Judge Martha Anderson's March 18 final order regarding the nine-year legal battle over a 0.51-acre piece in the heart of downtown's northeast parking lot, containing approximately 50 spaces.

The Groves did not file an appeal, meaning the saga has finally come to an end.

"I'm relieved that it's over," said village President Teri Stiles. "I just feel that it's unfortunate that it took so long to resolve that issue."

"I just want to settle it, put it behind us and move on because this thing has cost way too much money for that 0.51 acres," said Kevin Stephison, chairman of the Downtown Development Authority board.

Complying with this final order means the village must pay the land's former owner, Nathan Grove Family, LLC, the sum of $112,668. The village must also pay $67,655 to the law firm that represented the Groves, the Bloomfield Hills-based Adkison, Need & Allen.

All in all, the village spent a grand total of $528,872 to own and control this parking property, which includes a previous payment of $170,000 for it. That payment was split 50/50 between the village and Downtown Development Authority using monies they had set aside in an escrow account.

"That lengthy process ultimately cost the taxpayers more than it should have," Stiles said.

Of the $528,872 grand total, the village paid $187,785 in legal fees to its attorney, of which $20,000 was contributed by the DDA. The village was able to recoup $32,316 of its legal fees, so the net attorney bill was $155,468.

"I just think it's a travesty. I really do," Stiles said. "In the village trying to help the taxpayers, it ended up costing the taxpayers. I just think the whole thing was very unfortunate."

The legal battle began back in July 2002 when the village condemned the land in question, which was privately owned by the Grove family at the time, but had been leased by the municipality since 1974 to provide free public parking. The agreement had been the village would maintain, insure and use the property and in exchange, the Groves received $1 per year in rent and paid no property taxes on the land.

Nine years ago, the Groves approached the village about increasing the rent to $4,000 per month for 20 years with a 3 percent increase each year.

The village found this offer financially unacceptable. The village initially offered to buy the land for $170,000, but the Groves felt it was worth $1 million or more between the value of the land and the potential value of converting it into a pay-to-park business.

The village felt that price was also too steep, so the municipality condemned the property, claiming that free public parking was a necessity. This led to years of subsequent litigation. In September 2008, a jury determined the land was worth $267,830.

Even though the Grove family hasn't owned the property in question for years, the village must still pay $112,668 to them because Anderson ordered that Knauf Family Properties, LLC (the owner after the Groves) has "no standing with respect to any of the issues."

When the lawsuit began, the Grove family owned the property, but then purportedly sold it to the Knauf family in 2006 for more than $800,000.

It was later determined that the Knaufs couldn't be the new defendant in the case because the legal challenge to the village's necessity argument was upheld by the Michigan Supreme Court and subsequently, dropped by the Knaufs.

Under the law, when a challenge to the necessity for a condemnation is withdrawn or overturned, title to the property is presumed to date back to when it was condemned by the government.

Basically, the Groves could not sell the property to the Knaufs in 2006 because they technically hadn't owned it since 2002.

Personally, Stiles said she's "not a fan of condemnations."

Despite that, Stiles, who wasn't on council when this legal battle began, came to understand the "necessity" for the village taking this land given it's located in the very center of the public parking lot.

She said the fact that the previous private owners had expressed an interest in blocking the property off in order to either construct a building or convert it into a pay-to-park facility was unacceptable because it would have impeded emergency vehicle access and negatively impacted business owners in the northeast quadrant.

Of this last $180,323 the village must pay, Stiles believes the village and DDA should share the cost.

"It's in their district, so I can't imagine why anyone wouldn't feel they should contribute to that," she said. "How much they're willing to contribute, I have no idea.

"I think it would be equitable to all of us if it was a 50/50 split. It's for downtown . . . I think the village (took) on this case in the first place to benefit the business owners in the downtown area. (The village) took the hit and we went to battle for it, but it's certainly a downtown district benefit."

Although Stiles, who also sits on the DDA board, believes a 50/50 split is "the right thing to do," she understands the reality that if the DDA disagrees, "the village is just going to have to suck it up and somehow bear that burden."

Stephison said the DDA currently has a total of $55,000 set aside to put toward the Grove matter. The DDA board is expected to discuss its financial contribution at either its April or May meeting.

Speaking as one vote on the DDA board, Stephison said $55,000 is the maximum he's willing to spend here.

"Like everyone else, we're struggling with shrinking revenues, too" he said. "It's kind of time to put it to bed, but the DDA was never party to this. (The DDA) was approached by the village and (it) agreed to be helpful (with) some of the settlement, but I think a 50/50 split would be out of the question, at least in my opinion."