Detroit Councilwoman requests investigation into top Detroit attorney's action in bridge land sale

By the way things shook out last week, most likely thought spirits were high in Detroit City Hall: Under a resolution approved by Detroit City Council, Emergency Manager Kevyn Orr will be removed from office once the city's bankruptcy concludes. And, the controversy surrounding a $1.4 million land sale to facilitate a new public bridge to Canada appeared to end on a rather quiet note. 

But as it turns out, the land deal has generated a number of issues. Following the state Emergency Loan Board's vote last week to approve the $1.4 million deal, Detroit City Councilwoman Raquel Castaneda-Lopez has asked the city's inspector general to investigate Detroit Corporation Counsel Melvin "Butch" Hollowell's decision to withdraw the council's alternative to the land sale. Castaneda-Lopez said the board never authorized Hollowell to make that call. 

Last month, Orr asked the council to approve the sale of 301 city-owned parcels located where the new span, called the New International Trade Crossing, would end in Detroit. Council rejected that offer, citing concerns on whether the sale price was too low, and if the Delray community, which will be impacted the most by the bridge, would be adequately protected in the process.

Under the state's emergency manager law, the decision by council to reject Orr's proposal requires the board to then craft an alternative plan, which would go before the state Emergency Loan Board (ELB) — a three-member panel of state officials appointed by Republican Gov. Rick Snyder.

At that point, the ELB has to weigh the decision on which proposal to choose. It's unheard of the ELB voting against a proposal put forth by a state-appointed emergency manager. 

So, last Friday, the ELB held a meeting to consider the $1.4 million land transfer. As it was reported by the Detroit Free Press and News, Corporation Counsel Hollowell gave a statement to Detroit Finance Director John Naglick to read to the ELB before it considered the land deal. 

Reading Hollowell's statement, Naglick told the ELB: "The Detroit City Council understands that it has not submitted a viable alternative proposal to the land transfer that was submitted by Detroit Emergency Manager Kevyn Orr." 

If you ask Castaneda-Lopez, it doesn't make any sense why Hollowell asked for that statement to be read.

"There was never a final conclusion," the councilwoman says of Hollowell's decision to withdraw the proposal. "That conversation never happened. We didn't authorize anything."

Hollowell responded in a statement, saying Castaneda-Lopez has "raised some questions about this process."

"However, the Law Department, in consultation with the City Council's Legislative Policy Division, jointly concluded that the city's submission to the Emergency Management Board was not a direct alternative to the Emergency Manager's proposal," Hollowell says. "City Council's alternative to ensure that residents most impacted by the new bridge be treated fairly is now being worked out cooperatively between the Mayor and Council." 

(The "alternative" Hollowell mentioned is the council's alternative to the Neighborhood Development Agreement it previously rejected, which sought to provide financial benefits for the Delray community — instead of a legally-binding Community Benefits Agreement (CBA). But one official told Metro Times a CBA with some of the requested guarantees would likely require the approval of the Canadian government; therefore, it's too early to ratify such a deal.)

Exactly why Hollowell unilaterally decided "not a direct alternative" to Orr's deal remains unclear. The director of council's Legislative Policy Division told the Freep that he did in fact discuss the offers with Hollowell on Thursday. But, "There was no discussion about withdrawing council's argument," David Whitaker told the Freep. "[I]t was a discussion about how [council's] argument was positioned." 

Set aside the fact that City Council's alternative to the $1.4 million land sale may not have been viable to the ELB (and, for that matter, that the ELB only consists of Snyder appointees.) Is Hollowell, as the city's lawyer, in a position to represent the board in that capacity — without any direction through a vote by City Council? Is that the "process"?

Councilwoman Saunteel Jenkins told the Freep, "That's why we speak through written resolutions, so there is no room for misinterpretations."