Friday, October 21, 2005

Group will fight hospital site sale

Developers say state didn't follow bidding law when it sold ex-psychiatric facility in Northville Twp.

By Darren A. Nichols / The Detroit News

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NORTHVILLE TOWNSHIP -- The area's largest tract of available land may not be developed for another year, despite the state's agreement to sell it.

Representing a group of developers, attorney Mark Fox expects to ask a judge next week to reconsider an earlier decision, and block the sale of the shuttered Northville Psychiatric Hospital. The developers object to the way the property was sold.

If his motion is unsuccessful, plans already are being made to fight the issue in the Court of Appeals and possibly the Michigan Supreme Court, Fox said.

"We weren't a disappointed bidder. You can't be a disappointed bidder when you didn't make a bid," Fox said. "I am convinced we are right on the law. We didn't lose the case, we just lost the injunction. We're saying, 'Follow the rules. Do it again and do it according to the law.' "

On Oct. 11, an Ingham County Circuit Court judge denied a request for a preliminary injunction to stop the sale of the property to REI Group, a Bloomfield Hills-based developer. But the judge's bench ruling said preliminarily that Fox's clients were likely to prevail on the merits that the state violated the Michigan Constitution in the way it sold the land.

The land, at Seven Mile and Haggerty in Northville Township, is in one of the region's fast-growing areas. The cash-strapped state has tried to sell it for more than two years and earlier received bids of more than $75 million. But the sale dropped when developers discovered environmental problems, including buried medical waste and underground pipes that may be lined with asbestos.

In August, the property was to be sold at auction for a minimum bid of $33 million, but was recently sold for $31.5 million to REI Group.

Fox and his clients contended the state did not follow the law when it sold the 415-acre parcel. He adds Grand Sakwa would have bid on the property if it had known the state's minimum bid was flexible. Grand Sakwa is one of the developers Fox is representing in the lawsuit.

Northville Township Manager Chip Snider said he hasn't heard from REI, whose plans would have to secure township approval.

"It's mired down in legalities," Snider said. "My biggest concern is the safety for the property first. The sooner we begin on the site issue, the sooner we can begin demolishing the building and making sure that area is safe for this community."

A state House committee has launched an investigation into the sale.

You can reach Darren A. Nichols at (734) 462-2190 or dnichols@ detnews.com.