Open Agenda TV S3 E53 City Lawsuits and City Taxpayers

You're watching Open Agenda.

Welcome to Open Agenda.

I'm your host, Trish Melvin.

Today in the studio we have Dr. Joe Venosa and Mr. Joe Scafino.

Thanks for joining us today.

Thank you.

We're going to talk today about the last City Council meeting, which was September 14th,

for the City of Salisbury to vote down a request to obtain outside legal counsel to take on

the workload of these lawsuits that the City is involved in.

Resolution number 3489.

This is a resolution of the Council of the City to appoint Lindsay J. Ryan Esquire and

the attorneys of Booth, Cropper, and Mariner as Special Litigation Counsel for the City

of Salisbury with respect to the litigation currently pending before the Circuit Court

for Icomico County in caption as the Worthington Asset Protection between my role as City Solicitor

and the demands of the litigation that's pending in the Circuit Court for Icomico County.

The volume is too much.

I've selected or recommended the selection of Lindsay Ryan, who is a seasoned municipal

attorney.

She has the capacity to take on all three cases.

I think in doing that, it streamlines the lawsuit costs are going to be incurred regardless

of whether it's my firm or Ms. Ryan's firm, but she has the resources to attend to these

matters and this would allow me to devote the time that I would need to for my regular

duties as City Solicitor.

I think it's my understanding it's perfectly normal to outsource this type of condition

or situation that we're in.

Is that correct?

Yes.

And you have somebody who can devote their time to it.

As far as the money piece, it may end up being a wash because when Ashley has taken many

hours to, as you're saying, juggle and handle these lawsuits, someone else would take less

time so therefore the hourly billing may not be that big of an issue and it's a consolidation

to do what's best for the taxpayers and by doing so, we are hiring somebody who this

is their specialty and it can be done more effectively and more efficiently.

We say we don't have money for this, that, or the other, but we have all this money for

lawsuits that we're not going to win.

That's the sad part of it.

We're not going to win these lawsuits.

And why?

Because of parking or because of the amount of money they were sold for?

It's done and everything is legal.

I'm going to vote it down and I'm going to tell you why.

I think the council has every right and every obligation to push back on the administration.

Based on what we have seen over the last three years, I would guess we're going to be going

round and round in circles just like we have been.

Obviously, I'm going to be voting no on this, but because this is the only way we can send

a message to the mayor.

If he wants a new attorney, he can pay for it himself.

I don't look at this, and I'll say it again, it's not about the mayor to me, while I don't

agree with this and have said it, I also know that our city solicitor is important.

The great attorney, she has work to do for the city.

And to be clear, this, again, is my request, not administration's request, and I'm doing

it.

We understand.

And trying to act in the best city.

We understand.

I do understand.

Yes.

I wholeheartedly understand.

I do understand.

I wholeheartedly understand.

He's got to get the point.

He's got to get the point.

All in favor signify by saying aye.

>> Aye.

>> Aye.

>> All opposed?

>> Nay.

>> Nay.

>> Nay.

>> Nay.

>> And the chair votes nay.

This was hard.

Y'all just don't understand what we have been going through as a council.

I know some people may not have felt it.

This is, I'm going to be perfectly honest, this is the worst four years I've ever had

on a council.

We want to talk about the ramifications of that vote.

But before we do that, we want to just give you some historical context of how did we

get to this point and what any possible recourse may be.

So stay tuned.

Welcome back to "Open Agenda."

We're going to continue our discussion today with Dr. Joe Venosa and Joe Scafino about

the issues facing the city regarding the lawsuits that have been, have come up recently related

to development.

Joe, can you tell me a little bit about the historical context that got us to this point?

>> It goes back to the Jake Day administration where they declared certain parking lots in

the city as surplus and then sold them to developers.

Now the process was questionable, but at the time, nobody realized what we, it pretty much

got rammed through.

So it turns out that these properties were sold for pennies on the dollar, and these

are properties that the city paid hundreds of thousands, in some cases over a million

dollars for back in the 1980s.

So that's what's gotten us to this point.

Now these developers are submitting plans that are, have deficient parking, and developers

claiming, well, there's no parking requirement, and the city code clearly has a requirement.

So that's --

>> Is the parking sufficiency decided or determined, or is it spelled out anywhere?

>> In the code, there's a section on apartments, and it tells you you have to have like 1.5

spaces per unit.

Now that for the central business district was changed, and what they actually said is

that projects for proposed developments within the central business district will be evaluated

on a project-by-project basis with a recommendation from the planning and zoning commission to

the mayor and city council.

That's what's in there for the central business district now.

That never happened.

I've read all the meeting minutes.

There was never a recommendation by the planning commission on these parking requirements for

these districts and these lots.

>> So the process itself hasn't been followed, and now we're at a point where litigation

is engulfing the city government.

Is that fair to say?

>> Yeah.

And actually, the first litigation was the Holly Worthington lawsuit, and that suit has

laid out clearly that the procedures that were required and that they were not followed.

That lawsuit is devastating and will affect all the sales downtown.

>> At what point did these issues arise and really rise to the level of litigation?

>> When the developers submitted plans, and the current mayor was trying to negotiate

the parking, saying, "Look, there's a requirement for parking.

We need to meet it."

And the developers are insisting that they have no requirement, and they can do what

they want.

And I know the mayor has worked with Marina Landing, a developer, and they refuse to budge.

So the same thing with the Lot 30 developer.

He's got a little over 100 units between apartments and the retail, the requirement, and he's

only providing like 20 or 30 spaces.

It's like, where are these people going to park?

And if you know where that Lot 30 is, it's an island.

It's surrounded by 50.

>> So there's four lawsuits.

Are they all about parking?

Or is there other concerns besides parking?

>> Two of them are about parking.

It's Lot 30 and Marina Landing.

The Lot 10, which is on Route 13, where the flea market used to be, that's Mentis Capital.

That lawsuit is over a grant money that was given toward the project.

I believe it was $4 million, and it's supposed to be earmarked for infrastructure development.

In other words, water and sewer, electric, any road improvements.

The Mentis people want that $4 million to go for their design and engineering instead.

And the mayor, again, has said that's not what it's earmarked for.

This is what it needs to be.

And because they disagreed, they sued the city.

>> Who are the plaintiffs specifically in the four lawsuits?

>> Well, my understanding, obviously, from what you just said, Joe, is that one of them

for Lot 10 is Mentis Capital.

The one for --

>> Lot 30 is Market Street.

>> Market Street, which is Dave Layfield and Green Street Housing.

>> Right.

The Holly Worthington suit is actually against the Salisbury Town Center Apartment LLC --

>> Which is Gillis Gilkerson.

>> What triggered these plaintiffs to proceed with filing these formal lawsuits?

I think the developers reached a point where they realized they couldn't roll -- will get

the city government to roll over as easily as previous administrations.

>> That's a good way of putting it.

>> That's what I'm seeing from my vantage point.

That's not to say that they don't have allies on the council.

And there is a factional political system in the city regarding these lawsuits.

It generally seems to be this developer and certain local officials who are kind of all

in the development frenzy, and then those that are maybe not anti-development but are

certainly more fiscally concerned and also concerned about the logistics of it.

But it seems to take on very, very vicious political -- not even undertones, just outright

acrimony.

>> If you've been to the last couple of council meetings, I mean, the mayor has been personally

attacked for the stance he's taken.

Public comment, for the most part, supports the mayor's position.

In fact, the main reason I voted for the guy was because he was going to address this.

I realized the city taxpayers got screwed, and he was looking to correct that.

And again, nobody is anti-development.

It just has to be done properly.

I mean, they're going to develop downtown, as long as you provide the parking.

And that's what led to the lawsuits.

The developers have filed applications for permits for their projects, all right?

Marina Landing did, and Lot 30.

And they were not approved because of the parking.

They are claiming there's no parking requirement, and they're demanding the permit should be

issued.

So that's where those two lawsuits came from.

>> Does any of this fit into the larger discussion of affordable housing in general?

>> I've heard the term bantered about, but in reality, no.

I mean, I don't think the issue of affordable housing should be the political football that

it's become, because as I understand it and have seen, it's largely an empty slogan used

to further some developers' agendas.

There was a really vicious debate a couple of years ago about the density in the city.

And it was, again, connected to the -- I believe it was the lot --

>> 111 and 15.

>> And 15 project.

>> The town center project.

>> The town center project.

And the argument that people were making then was that it would be for -- first it was affordable

housing, then attainable, and then it was all of the above.

So they were using these terms simultaneously.

And again, I'm sorry, but that's not affordable housing.

>> The Green Street housing, their shtick is affordable housing.

So what they're proposing for lot 30 would be affordable housing.

So I think it would be income-based.

>> Well, and this is the thing.

I don't think anybody disputes that we need all kinds of housing.

I think this comes down to, okay, what does the city -- is the city code and process being

correctly followed?

And are the taxpayers and the regular citizens getting hosed or not?

>> And if you look around, outside of the Central Business District, there's a lot of

construction going on in Salisbury limits.

I mean, Snow Hill Road, there's that huge townhouse development.

Pemberton, Pemberton Road, there's a huge development.

There's a lot of construction going on.

It's just not occurring in the Central Business District.

So for people to say that nothing is happening in Salisbury, that's not true.

>> Joe, there was a vote at the city council meeting on September 14th taken as to whether

the city should expend the funds to hire outside legal counsel to handle this additional litigation

workload.

How did that go?

>> There was contentious debate leading up to that vote, and ultimately came down to

a three-to-two vote.

So against.

So Blake, Gregory, and Jackson voted against hiring outside counsel.

Councilwoman Holland and DeShiel voted for it, but it lost three-to-two.

So as of right now, Ashley Boucher has the load still.

>> We're going to go to break right now and come back and discuss how these issues came

up recently at the city council meeting of September 14th.

Welcome back to Open Agenda.

Let's talk a little bit more about the vote that was taken at the city council on the

14th of September.

Now the vote failed, Jackson, Gregory, and Blake voted against spending the funds for

outside counsel.

Now were any of these council members in place initially when the plans went forward for

these development projects?

>> Yes.

That's the irony of the whole vote.

First of all, the taxpayers are not paying for any of the legal fees.

Our insurance carrier is covering all the lawsuits.

So this is not costing the taxpayers a dime.

Number two, these council members are feigning concern for the taxpayer, but where were they

when these properties were given away for pennies on the dollar?

For example, in 2023, when lots 111 and 15 were sold, all right, that was a 4 to 1 vote.

Council members Blake, Gregory, Muir Boda, and Megan Oughton voted to give away these

properties, pennies on the dollar.

At that time, Councilwoman Jackson voted against it.

The City Council met in closed session to obtain legal advice on a legal matter, had

a discussion with legal to get some answers on some items on this particular topic.

All right.

So after we've had some discussion, any other questions or comments on the resolution?

Do we have consensus to move this forward to the special meeting?

>> Yes.

>> Yes.

>> So we have four to move forward this time.

We will move to public comments.

>> My name is Carolyn Waldman.

I'm concerned about the urgency of this meeting, a special meeting that was called on a Thursday

afternoon on a city Facebook website, citing that there would be an agenda attached.

When you click the link, there was no agenda, that Article 5 provided that the city pay

all costs for construction of the garage to the tune of $10 million.

That's our city tax dollars.

How exactly is spending $10 million of taxpayer money to build a garage for the developer,

for the use of his tenants, not for the citizens of Salisbury, and written into the resolution

is it's "in the best interest of the citizens of the city."

So I urge all of you on the city council to immediately stop the sale of all city-owned

parking lots.

>> Hi.

I'm Holly Burlington, and I'm a local business center in downtown.

A couple years ago, I purchased the synagogue building, which is across the street is parking

lot 15.

I have tenants, which are over there.

We have no street parking for my residents, nor for the agents that work for my office.

Lot 15, I was told when I purchased the building, was going to be our lot to utilize for our

parking.

We had permanent parking.

They have since relocated my tenants and myself over to lot 1, which eventually is going to

be sold for development.

>> I'm Michael Weisner, and I'm here in opposition to the proposed sale of lots 1, 11, and 15.

I have previously sent the mayor and council a lengthy email about my concerns about the

project and the negative impact it will have on the finances of the city to remove all

357 conveniently located parking spaces and replacing them with a multimillion-dollar

garage paid for and owned by the city, but designed to benefit the developer.

Mr. Freeman gives the developer a hand, all 226 tenants the right to purchase parking

permits ahead of the public, so much so that it pretty much fills up the garage without

providing much, if any, parking to the general public.

>> Next is Randy Taylor.

>> I've had the unique distinction of buying lots from the city.

When I went through the process, it was like a three-year process, and I not only had to

provide an overlay drawing, I had to provide, you know, a list of what I was going to sell

and how we were going to sell it.

We didn't just make an offer and they accepted it.

We had not just one, but two appraisals.

I ended up paying twice what I initially made an offer to the city because it was all done

in public -- in the public way.

I'm a former banker, and I'm not for anti-development, but at the end of the day, we got one time

to do this right, and I think we're pointed in the direction of doing it absolutely wrong.

>> Miss Alton.

>> Salisbury is at a pivotal moment.

We're not the only municipality to be facing this.

Our entire nation is facing a housing crisis.

We talk about how these projects aren't just going to benefit -- what communities these

projects are going to benefit, and I do hear a lot of the concerns coming from this room.

This housing opportunity, the work that this council, that this administration, and the

developers are only ever working to benefit this community.

>> Housing was one of the main things that I spoke about, and was one of the main issues

that has always driven me.

It's always been about changing policies such as parking density is critical in an area.

It'll be positive for local businesses, and I have always been supportive of this.

For the question, all those in favor of approving Resolution Number 3263, please signify by

saying aye.

>> Aye.

>> Any opposed?

>> Aye.

>> Me.

>> Me.

And the chair votes aye.

Motion passes 4-1.

>> If we look at the meeting minutes, and we look at the city code requirements, proper

procedures were not followed, and what concerns me is as council members, they abdicated their

fiduciary duty to the taxpayers.

They should have known what the code requirements were, and if they didn't, shame on them.

>> So you think that given the seeming hypocrisy of their recent vote, and now feigning being

fiscally responsible and concerned, do you think that that's a reflection of external

pressure?

Do you think that's a genuine concern?

I mean, how do we explain this any other way other than cynical politics, unless that's

what it is?

>> Well, you know, in the case of Blake and Gregory, it's become personal with the mayor.

Okay, number one.

Number two, look at who contributed to their campaigns.

Developers were their contributors.

So as a cynic on the outside, I'm going to say, well, you know, they're doing the bidding

of their contributors.

>> And one of the things that I'm still sort of wracking my brain about is, okay, you said

yourself, right, that our insurance carrier will be actually paying for the costs, but

the city has to essentially vote to unlock that.

Is that -- like, by taking that vote to appropriate those funds, that gets the ball rolling on

the process?

Is that --

>> You know, I -- no matter what, the request for the outside counsel was made by Ashley

Bushe.

>> Right.

>> Because she said, you know, it's just too much.

>> So it's not the mayor that's requesting it?

>> No, no.

It was actually the counsel.

And again, the fact that the insurance carrier is paying for it, it should be a moot point.

It should be a no-brainer.

>> Yeah.

>> Absolutely.

>> So I would prefer to have an outside counsel that's going to, you know, not have any other

distractions.

>> Yeah.

>> And --

>> Well --

>> Defend the city.

>> Well, the thing is that the litigation is going to go forward regardless, right?

So --

>> Exactly.

>> So could you make the argument that by denying those funds, the -- some of the city

council members are effectively trying to get the city to lose the lawsuits against

the developers?

Is that --

>> It almost seems that way.

In fact, Councilwoman Jackson stated, "Why are we doing this?

The city can't win these lawsuits.

We're going to lose."

And I'm --

>> Is that an accurate assessment?

>> Absolutely not.

And, you know, I don't believe Councilwoman Jackson has a legal background at all.

There are people in the public that do, including myself.

And I can tell you the facts support the city.

I mean, there is no doubt there is a parking requirement for those downtown districts.

There's no doubt.

And I would challenge any of those council members to point out why they believe it does

not apply.

>> So is it really a question then, not so much of the facts being pertinent right now,

but the battle for PR and the rhetoric over?

Because what I see a lot -- and maybe it's skewed because I see it on social media, but

I see a lot of people basically saying the city is doing great financial damage to itself

because of the lawsuits, and yet putting aside all the financial facts that you've laid out,

it's more complicated than that because, again, it seems that the city is actually, according

to your argument, on quite solid legal footing.

As we said earlier, there's development going all over outside the city of Salisbury, all

right?

It's just the central business district where we have this impasse.

So to say that developers aren't going to come to Salisbury because it's litigious is

bunk.

You know, just look around.

>> In all fairness to the previous council members, I mean, is there any possibility

that these votes were taken just in a mood of optimism?

>> I can't speak to everybody, but I will say there is, generally speaking, an ideology

among some people who believe that any development is good development, and whatever it costs

the public, it will come back in more economic activity, more hiring, which will lead to

more payroll taxes.

I don't always subscribe to that, and I think our latest conversation across the country

and across the county about data centers kind of proves it, is that that optimism about

what things could be has to exist in a reality.

And the reality is that not every development project is going to lead to this perfect setup.

And unfortunately, I feel like some people are letting an ideology of optimism and maybe

influence of contributors run the show.

There seems to be people that take the issue and make it partisan, which I find troubling

because I don't look at the city's development impasse as a left-right Republican-Democrat

thing, although it sometimes comes across that way for certain people, and I think it's

part of the danger in this whole discussion is we're not actually having a discussion

about city procedure and economics.

We're basically saying people will say, "Well, the mayor's a Republican, so of course he's

going to do this."

And then people on the other side will say, "Well, they're Democrats, so of course they're

going to back the posh developers and they want to gentrify things."

I don't think it's that black and white, right?

I think you talk to a lot of people on the ground.

They don't look at it as a political issue in the sense of partisanship, or at least

people that I speak with who are maybe not as terminally online.

And I think it's important because one of the things that in the community of any issue

we have to keep in mind is if we're going to put ourselves in a partisan echo chamber,

we're not going to give ourselves the full picture to understand a problem, and then

you can just dismiss it out of hand.

And I think that's something that in this current environment and issue, we have to

be on guard against, is the tendency to just fall back into political tribalism rather

than look at a municipal issue for what it is.

I think that's a great explanation of the situation right now.

That's how I see it, at least from my vantage point.

I agree with you.

I agree.

It's entirely counterproductive to inject partisan politics into local matters.

So given that there's questions about the charter and planning and zoning's involvement

in these decisions, is there any recourse for when the process is not followed as spelled

out?

Another thing that Councilwoman Jackson said is a contract is a contract.

It was done, and it was done legal.

It was done legal.

I don't care what anybody says.

A contract is a contract.

Am I right or am I wrong?

A contract is a contract, and it's legal.

So where do we come from trying to break something that's already done?

But again, with no legal background, you can't make a statement like that because if a contract

is procured through fraud or by ignoring, not following proper procedures, that contract

can be voidable or can be declared void from the beginning.

And again, when the city procurement officer declares surplus property, the code specifies

from time to time, recommend to the mayor and council the sale or other disposition

of surplus, obsolete, or unused city property and obtain expert appraisal thereof or estimate

its value using his or her best information and judgment.

Again, I went back to meeting minutes.

There was never an appraisal done of any of these lots that were sold.

The Marina Landing that the city bought, it was approximately three acres.

They paid $1.2 million in 1988.

They sold two-thirds of it for a dollar.

There is no way that that procurement officer recommended to the council and the mayor,

"Hey, let's sell that for a dollar."

That could not possibly have happened.

That had to come down from Mayor Jake Day with the council's acquiescence.

Right there, procedure wasn't followed.

And that's part of what's in the Worthington lawsuit.

And this, just something like that can blow up the sales of all those lots.

So stay tuned.

We will follow up as these events progress with the city of Salisbury and the lawsuits

that it's involved in.

Join us again for Open Agenda.

In other words, kids, go to law school because there's no shortage of work opportunities.

I apologize.

I'm feeling a little overheated, as you guys can tell.

It's a bit hot in here.

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