Plaintiffs,

Defendants.

There is no other civil action arising out of the same transaction or

occurrence as alleged in the Complaint pending in the court nor has there

been previously filed and dismissed after having been assigned to a judge.

COMPLAINT AND DEMAND FOR JURY TRIAL

NOW COME Plaintiffs, Anban, Inc., d/b/a Loyal Order of Moose Hall,

Historic Saint Andrews Hall, Inc., a Michigan corporation d/b/a Saint Andrews Hall, Dan

Kachadourian, Blair J. Mc Gowan, and the Lower Woodward Housing Coalition, a

Michigan non profit corporation, by and through their Attorneys, Steven W. Reifman of

Reifman & Glass, P.C., and Lawrence Kestenbaum, and do hereby file their Complaint

against Defendants City of Detroit, a Michigan municipal corporation, and the City of

Detroit Downtown Development Authority, a public body corporate, and hereby file their

Complaint and request for Temporary Restraining Order, Preliminary Injunctive Relief,

Injunctive Relief and other relief as follows:

COMMON ALLEGATIONS

1. That Plaintiffs Anban, Inc., d/b/a Loyal Order of Moose Hall,

Historic Saint Andrews Hall Inc., a Michigan corporation d/b/a Saint Andrews Hall, and

Dan Kachadourian, are owners of certain real property located at 2115 Cass, Detroit,

Ml, 48226, 431 East Congress, Detroit, Ml 48226, and 119 West Montcalm, Detroit, Ml

48226, respectively, in an area of the City of Detroit, County of Wayne, State of

Michigan who are taxpayers of certain real property taxes (herein after known as

"Plaintiff Taxpayers") which are included in a Tax Increment Finance Plan area which

was designated by an ordinance of the Defendant City of Detroit and is under the

jurisdiction of a body corporate known as the Defendant City of Detroit Downtown Authroity.

2. That Plaintiff BLAIR J. MC GOWAN is a person having an interest in property located

within a certain downtown district and further owns and operates

businesses in said district all located within the City of Detroit, County of Wayne, State

of Michigan, and more particularly is a person who operates businesses and owns

personal property located within the area of the Tax Increment Finance Plan under the

jurisdiction of a body corporate known as the City of Detroit Downtown Development

Authority, Defendant herein, such that he is subject to taxation by the Defendant

Authority for his property held within the subject tax increment finance plan district

pursuant to M.C.L. 125.1665 (1) and is otherwise interested in the potential demolition

of the J.L. Hudson's Building as being done, if at all, according to law and the process

required in the Act and otherwise.

3. That Plaintiff Lower Woodward Housing Coalition is a Michigan

non-profit corporation which is made up of members who are concerned that the area of

the City of Detroit, County of Wayne, State of Michigan, along Woodward Avenue in

the downtown area be considered as a site for housing and multiple use projects as

well being dedicated to an open, democratic and participatory planning process

generally and as specifically required by law.

4. That Defendant City of Detroit is a Michigan Municipal corporation

with offices in the City of Detroit, County of Wayne, State of Michigan, which through its

governing body, the Detroit City Council, amongst other things did establish pursuant to

Michigan State Statute, Public Act 1975, No. 197 ( MCL 121.1651 et seq) (herein after

sometimes referred to as "DDA Act") the Defendant City of Detroit Downtown Detroit

Development Authority by Ordinance No. 11 9-H.

5. That Defendant Downtown Detroit Development Authority

(herein after sometimes referred to as "Defendant DDA" ) is a public body corporate

created under the Downtown Development Authority Act pursuant to ordinance by the

Defendant City of Detroit.

6. That the first Tax Increment Financing Plan and Development Plan

for Development Area No. 1 was created by Ordinance 248-H and approved May 17,

1978 which was periodically amended.

7. That Defendant City of Detroit Downtown Development Authority,

as will be set forth in greater detail herein, did, amongst other things act unlawfully by:

a) creating a Tax Increment Financing Plan and Development

Plan pursuant to the DDA Act which included a “Land

Assemblage Program" that failed to specifically designate

any particulars as to the land and/ or buildings it would

assemble;

b) taking action toward the demolition of a certain building

known as the "J.L. Hudson Building" located at 1216

Woodward Avenue in the City of Detroit, County of

Michigan, State of Michigan which is located within the

"Development Area" designated by the defendants pursuant

to MCL 125.1651(1)(e), but as to which there is no specific

reference in the Tax Increment Finance Plan and

Development Plan as required by MCL 125.1667 (2)(c) and,

c) failing to include the proposed demolition of the J. L.

Hudson Building in any of the required public notices such

that it was not the particular subject of any notice for

proposed action as a building slated for demolition or for

any other action in any of the Downtown Development

Authority's Tax Increment Finance Plans and Development

Plans as required by M.C.L.125.1668; .

8. That the Defendants City of Detroit and the City of Detroit

Downtown Development Authority are attempting, without notice and hearing and

without including statutorily required information in the subject plans, to demolish or

otherwise destroy the J.L. Hudson Building by using Tax Increment Finance Plan

monies unlawfully collected in violation of the requirements of the DDA Act.

9. That the J. L. Hudson Building is a large and prominent former

department store building located at 1206 Woodward, Detroit, Michigan with a legal

description as follows:

Lot 33 through 39, both inclusive and Lots 72 though 78,

both inclusive, including all the adjoining vacated public

alleys describe in Journal of Common Council Proceedings,

906. Page 1415; 1906. page 1048. 1906. Page 1093, and

Liber 915. Pages 447 and 448. Wayne County Records,

except alley as opened in Liber 686, Page 237, Wayne

County Records Section 7 of the Governor and Judges Plan

of Section 7, of the City of Detroit, Wayne County, Michigan

according to the plat thereof as recorded in Liber 34, Page 544 of Deeds, Wayne County Records.

10. Plaintiffs advocate the evaluation of the J.L. Hudson Building for

rehabilitation into housing or mixed use, and further advocate that proposals

from developers be solicited for that purpose and otherwise complain that the

process which was designed to fully evaluate the use of the building and the

spending of monies collected pursuant to the Act be followed in order to spend

the significant monies so collected pursuant to law.

11. That Defendants have not identified any specific alternative use for the site of the J.L.

Hudson Building once the planned demolition is accomplished.

12. That the City of Detroit Downtown Development Authority Tax

Increment Financing Plan and Development Plan for Development Area No. 1" (the

"Plan") is a "tax increment financing plan" and "development plan" as defined under,

M.C.L. 125.1664, et seq. and must comply with the requirements of the Act.

13. On December 4, 1995, the Detroit City Council amended the Tax

Increment Finance Plan and Development Plan by ordinance, (see Exhibit A) and

thereby adopted by reference the "Land Assemblage Fund" which is now included at

pages 227-228 with section number '407.9.2 and is incorporated into a published Tax

Increment Financing Plan and Development Plan dated September 10, 1996. (See

Exhibit B).

14. Although a public hearing, as required by MCL 125.1668(1), was

held on November 27, 1995 prior to the City Council approval of the Tax Increment

Finance Plan, the notice required by MCL 125.1668(2) and published to the public and

other interested parties failed to include any specific reference to the demolition of the

J.L. Hudson Building as being part of the Development Plan, and failed to include any

specific reference to said building in the Development Plan as required by the

Downtown Development Authority Act. Thus approval of the demolition and allocation

of funds for said demolition of this significant structure in downtown Detroit were made

by the Detroit City Council without actual notice and hearing as required by the DDA

Act. Accordingly, the spending of funds raised pursuant to the DDA Act for this

demolition is illegal.

15. The "Land Assemblage" Program contained in the Development

Plan as approved by the City of Detroit City Council included the allocation of

$30,000,000 for such assemblage providing further that "(P)rior to expending any

portion of the $30 million on demolition/clearance costs, the Authority shall present to

the City Council for the City of Detroit, for their review and approval, the Land

Assemblage Plan which identifies the real property to be demolished".

16. That the provision of the “Land Assemblage” Program referenced

in paragraph 15 above is in violation of the Act, M. C. L. 125.1667(2)(c) which requires

that any such act of demolition be included specifically in the Development Plan, and

that it be subject to the notice and hearing requirements of the Act.

17. On February 5, 1997, the Detroit City Council adopted a

“Resolution Authorizing the Demolition/Clearance Costs for the J.L. Hudson Building”,

attached hereto as Exhibit C.

18. That although the resolution attached hereto as Exhibit B

amounted to a modification of the Tax Increment Financing Plan and Development

Plan, the City Council failed to provide any notice or public hearing as required by the

DDA Act, MCL 125.1664(5) and 125.1669(2).

19. That spending in furtherance of the City Council resolution, see

Exhibit B, is illegal because the City Council has illegally and invalidly modified the Tax

Increment Financing Plan under MCL 125.1664(5) and the development plan.

20. That these Plaintiffs have suffered and will continue to suffer harm

as a result of these acts by being deprived of their right to due process under law, by

being deprived of their right to participate in a democratic process as allowed by law,

by being required to pay higher taxes, by having their tax monies used unlawfully, by

the possible loss of real property values, and by being deprived of their right to

participate meaningfully in the process concerning said J.L. Hudson Building and the

expenditures under the Land Assemblage Fund.

21. That the issue before the court is one of public interest, qualifies as

a taxpayer suit, is a violation of State Law and the matter at issue has a value in excess

of the sum of Twenty Five Thousand ($25,000.00) Dollars.

22. That Plaintiff taxpayers have been harmed and will be harmed by

this illegal allocation of funds since as taxpayers within the area of the Tax Increment

Finance Plan District they are a source of and contribute to tax increment revenues

which the DDA proposes to use for illegal purposes.

23. That taxes will be increased or are otherwise being dissipated as a

result of the proposed expenditure such that the money to be used for this expenditure

would otherwise be available for the general purposes of the DDA, or said taxes could

be used to improve or enhance the properties owned by the taxpayer plaintiffs and

other Downtown property owners, thereby generating additional property tax revenues,

rather than having the money expended on the demolition of the J.L. Hudson's Building

which will create a vacant unimproved site that will generate nominal or zero property

tax revenues.

24. That the expenditures made towards the demolition of the J.L.

Hudson's Building were unlawful as stated above and below, and the proposed

additional expenditures would also be unlawful.

25. That the Board of the City of Detroit Downtown Development

Authority is unlawfully constituted in that the Act, particularly M.C.L. 125.1654(1)

requires that “not less than 1 of the members shall be a resident of the downtown

district” and that the Board contain "not less than a majority of the members shall be

persons who have an interest in property located in the downtown district." Such

requirements have not been met such that all acts of the Downtown Development

Authority of the City of Detroit are illegal and void.

COUNT I

VIOLATION OF THE DDA ACT/TAXPAYERS' SUIT FOR WASTE

26. Plaintiffs adopt and reassert paragraphs 1 to 25 of the common

allegations of this complaint.

27. That the demolition of the J.L. Hudson's Building and the illegal

spending of Tax Increment Finance Plan funds is imminent with the defendants acting

to take bids and let various contracts of demolition as this complaint is being written.

See Exhibit D. August 22, 1997 Inter Office Memo from Michael Van Antwerp to the

Board of Directors, Downtown Development Authority. Moreover, a fence to enclose

the J.L. Hudson Building is being constructed as of the date of the filing of this

Complaint.

28. That the illegal spending of Tax Increment Finance Plan Funds for

the demolition of the J. L. Hudson building, which is unique, historic and has great

cultural and practical value for housing, rehabilitation and the future of Downtown

Detroit, required a full hearing with notice in compliance with the Act, as set forth

above, before any funds could be allocated or spent.

29. The demolition of the J.L. Hudson Building would constitute

irreparable harm since once this unique historical and cultural building is destroyed, it

cannot be recreated. Further, once illegally allocated funds are spent on that

demolition, they cannot be retrieved. Additionally, Plaintiffs will have been irretrievably

denied their due process and statutory rights to a full and fair hearing before such

funds are allocated and spent.

30. That the facts and the various violations set forth in the Common

Allegations require this Court to act by issuing a temporary restraining order, ordering a

show cause hearing, and granting a preliminary injunction, and upon conclusion of this

case granting a permanent injunction, then permanently enjoin the expenditure of funds

and the demolition of the JL Hudson Building unless or until the Defendants act in

compliance with the law.

WHEREFORE, Plaintiffs pray that the Court grant the following

declaratory and injunctive relief:

a) declare the Land Assemblage Program void because it fails

to comply with the requirements of notice, hearing and

specificity mandated by the Downtown Development

Authority Act, MCL 125.1651 et seq.

b) declare the "Resolution Authorizing the Demolition/

Clearance Costs for the J.L. Hudson Building" ineffective,

null and void as an unlawful amendment to the tax

increment financing and development plan;

c) issue a Temporary Restraining Order, order a hearing on

the issuance of preliminary and permanent injunctive relief,

and issue an injunction to prohibit Defendants from taking

any action to demolish the J.L. Hudson Building unless and

until a legally adopted Tax Increment Financing and Development

Plan including such demolition is in place pursuant to the various

requirements of the Downtown Development Authority Act, MCL 125.1651 et seq.

COUNT II

UNLAWFUL CONVEYANCE

31. Plaintiffs adopt and reassert paragraphs 1 to 25 of the common

allegations of this complaint and paragraphs 26 to 30 of Count I as if they have been

fully restated herein.

32. That the Defendant City of Detroit did purchase and then did

convey title to said J. L. Hudson building to Defendant City of Detroit Downtown

Development Authority pursuant to City Council's resolution. See Exhibit E attached

hereto.

33. That sale of the J. L. Hudson Building was not included in the

Development Plan or any of its amendments.

34. That such conveyance of title was illegal and constituted a violation

of the Defendant City of Detroit Downtown Development Authority's powers since the

ability and power to purchase and own any property requires specific inclusion in the

Development Plan. MCL 125.1667(9).

WHEREFORE the title to the J.L. Hudson Building should be ordered

returned to the Defendant City of Detroit.

COUNT III

Violation of Requirements of Worlcing with the Citizens District Council

35. Plaintiffs adopt and reassert paragraphs 1 to 25 of the common

allegations and paragraphs 26 to 30 of Count I and paragraphs 31 to 34 of Count ll of

this Complaint as if they have been fully restated herein

36. The Downtown Development Authority Act, M.C.L.. 125.1669(a)

requires that the “governing body”, (the City Council for the Defendant City of Detroit)

consider "the findings and recommendations of a development area citizens district

council" which in this case is the City of Detroit Downtown Citizens District Council.

37. That the Downtown Detroit Citizens District Council is an offficially

authorized Citizens District Council by Statute of the State of Michigan and is so

designated by the Defendant City of Detroit to operate as such in the area of the Tax

Increment Finance Plan under the jurisdiction of an Authority known as the City of

Detroit Downtown Development Authority, Defendant herein.

38. That the Defendant City of Detroit failed or has otherwise refused

to include the Downtown Detroit Citizens District Council in its consideration of the

various acts complained of above concerning the Land Assemblage Program and the

J.L. Hudson Building demolition or other actions as required by the Act.

39. That the failure to consider the findings and recommendations of

the duly constituted Downtown Detroit Citizen's District Council makes all actions taken

by Defendants in regard to the the Land Assemblage Program and the J.L. Hudson

Building, including but not limited to actions taken towards it demolition, unlawful and

therefore void.

40. That the Downtown Development Authority of the City of Detroit

and the City of Detroit City Council are obligated under M.C.L.125.1672 to work with

the City of Detroit Downtown Citizen's District Council as an advisory body.

41. That although so obligated Defendant City of Detroit Downtown

Development Authority and the City of Detroit through its City Council have failed or

otherwise refused to allow said City of Detroit Downtown Citizen's District Council to act

as an advisory body.

42. That the failures to work with the City of Detroit Downtown Citizen's

District Council as an advisory body throughout the various years of activity makes all

such actions void ab initio such that all of its actions including the spending of monies

on the J.L. Hudson Building and all other expenditures should be held illegal and this

court should assume superintending control over the City of Detroit Downtown

Development Authority or should declare it void, thus making its very existence illegal.

COUNT IV

Violation of Requirements of the Board's Makeup

43. Plaintiffs adopt and reassert paragraphs 1 to 25 of the common

allegations and paragraphs 26 to 30 of Count 1, paragraphs 31 to 34 of Count ll,

paragraphs 33 to 42 of Count lll of this Complaint as if they have been fully restated

herein.

44. That the failures of Defendants to satisfy the requirements

enumerated in paragraph 25 of the Common Allegations required by M.C.L. 125.1654(1) make all actions of the Defendants as it relates to the J.L. Hudson Building

illegal as well as all other acts illegal such that the court should assume superintending

control over the City of Detroit Downtown Development Authority or should declare it

void thus making its actions under unduly constituted Boards illegal and void.

COUNT V

Violation of Reporting Requirements

45. Plaintiffs adopt and reassert paragraphs 1 to 25 of the common

allegations and paragraphs 26 to 30 of Count 1, paragraphs 31 to 34 of Count ll,

paragraphs 35 to 42 of Count lll and paragraphs 43 to 44 of Count IV of this Complaint

as if they have been fully restated herein.

46. That pursuant to M.C.L. 125.1665(3) the Defendant City of Detroit

Downtown Development Authority is obligated to annually "submit to the governing

body of the municipality (City of Detroit's City Council) and the state tax commission a

report on the status of the tax increment financing account" which shall include various

detailed information enumerated in the Act.

47. That Defendant City of Detroit Downtown Development Authority

has failed on an annual basis to file the annual report enumerated in M.C.L.

125.1665(3).

48. That the requirements of M.C.L. 125.1665(3) are critical to the

sound operation of Defendant City of Detroit Downtown Development Authority and are fundamental to good government and due process such that all acts of the Defendant

City of Detroit Downtown Development Authority are illegal as they relate to the

demolition of the J.L. Hudson Building and the Land Assemblage Program and the

Defendants should be compelled to comply with these requirements.

WHEREFORE Plaintiffs pray this Honorable Court issue an order voiding

all acts of Defendants in violation of the Downtown Development Authority Act, MCL.

125.1651 et seq and providing injunctive relief that requires Defendants to act in good

faith to consider the findings and recommendations of the Downtown Detroit Citizens

District Council. Further Plaintiffs respecffully request that this court maintain

supervisory control of said process to insure that the requirements of the Act are

fulfilled as well as causing the immediate cessation of any acts to demolish, harm or

otherwise diminish the value of the J.L. Hudson Building.

Respecffully submitted,

REIFMAN & GLASS, P.C.
Steven W. Reifman (P25208)
Attorney for Plaintiff
30300 Northwestern Hwy., Suite 301
Farmington Hills, Ml 48334
(248) 9324000
LAWRENCE KESTENBAUM (P34957)
Co Counsel for Plaintiffs
303 S. Kedzie Hall East
Lansing, Ml 48824
(517) 3534441

Dated: October 28, 1997

DEMAND FOR JURY TRIAL

NOW COMES Steven W. Reifman of Reifman & Glass, P.C., and

Lawrence Kestenbaum, for and on behalf of Plaintiffs, and requests that this matter

be tried before a jury.

Respectfully submitted,
Steven W. Reifman (P25208)
Attorney for Plaintiff
30300 Northwestern Hwy., Suite 301
Farmington Hills, Ml 48334
(248) 932-4000
 
LAWRENCE KESTENBAUM (P34957)
Co Counsel for Plaintiffs
303 S. Kedzie Hall
East Lansing, Ml 48824
(517) 353-4441

Dated: October 28, 1997

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