After a four-year legal battle, Pontiac Mayor Deirdre Waterman plans to request next week that the demolition order on the Phoenix Center parking garage and amphitheater be lifted.
The demolition is mandated by the final order left behind by former Emergency Manager Lou Schimmel. Modifying the order requires the approval of the Receivership Transition Advisory Board appointed by Gov. Rick Snyder after Schimmel’s August 2013 resignation.
The requirement that the Phoenix Center be leveled “is an albatross I need to have removed if we’re going to have any kind of sensible solution,” Waterman said during an interview at City Hall.
The city’s attorney will present the request at a transition advisory board meeting scheduled for 1 p.m. on Thursday, Dec. 15, Waterman said. If the board OK’s a modification of Schimmel’s final order, the decision would then need a sign-off from state Treasurer Nick Khouri before taking effect.
Pontiac — which has built a $14 million rainy day fund after years of restructuring — could be dragged into bankruptcy if a multimillion-dollar judgment is awarded to Ottawa Towers, Waterman said.
“It feels like we’ve accomplished a huge milestone getting that far,” Waterman said of Pontiac’s budget surplus.
A reversal of the city’s demolition plans would also mean a freeing up of $2 million the city has held in escrow to pay for the cost of leveling the Phoenix Center, Waterman said.
“I’m at last challenging the state to take this out.”
Oversight of the Phoenix Center litigation was handed to Waterman in a power-sharing deal with the state in 2014. Further control was returned to the mayor and council earlier this year with the departure of City Administrator Joseph Sobota and a reduction of the scope of the transition advisory board’s oversight.
The Michigan Supreme Court declined in October to hear the city’s appeal of its condemnation lawsuit against Ottawa Towers.
The owner of the two downtown office buildings, which are adjacent to the Phoenix Center, sued the city in 2012 when Schimmel announced demolition plans for the structure. The former emergency manager cited $8.1 million in needed repairs and maintenance work and the Phoenix Center’s $175,000-a-year deficit as rationale for the move.
The Ottawa Towers’ lawsuit argued that a demolition would take away parking, violate easement rights and damage the office towers, and asked for $9 million in damages in the event of a teardown.
Future plans for the Phoenix Center aren’t yet clear, Waterman said, adding that studies she’s read “say there is still very useful life in the garage.”
A Congress for New Urbanism study of downtown completed in the spring recommended “a phased demolition of the Phoenix Center over two or three decades,” according to the group, and called the structure, which bisects Saginaw Street, “a large obstacle preventing people and cars moving through the [city] center.”
At the same time, the CNU recommended the city maintain the Phoenix Center in the short term and place “civic and recreational facilities” on its roof.
During the years-long court fight between the city and Ottawa Towers, the north side of the garage has sat dark, while the office buildings have used the south side for parking after making repairs on that portion of the structure.
Waterman said she was “totally perturbed” to find that the original development agreement for the Phoenix Center could have allowed the city to receive help in paying for repairs on the 874,000-square-foot building. The agreement dates to the opening of the Phoenix Center in the early 1980s, when the neighboring Ottawa Towers were occupied by General Motors.
The mayor said she’s unsure whether the clause was used by the city decades ago, but that it has not been used in the last decade.
“In all these years, it probably would have paid for all these repairs that needed to be done, and therefore the argument could not have been made that the city could not afford to maintain it. That’s the argument that started the lawsuit in the first place.”