TRAVERSE CITY — A federal judge tossed much of a developer’s lawsuit challenging Traverse City’s tall buildings vote requirement.
Judge Paul Maloney of the U.S. District Court of Western Michigan sided with the city’s arguments that 326 Land Company doesn’t have a vested right to a building taller than 60 feet.
The developer challenged the city’s November 2021 stop-work order on its condominium project on State Street with rooftop attachments and insulation putting it more than 60 feet, as well as the legality of the vote requirement itself.
City officials issued the stop-work order following a ruling from then-13th Circuit Court Judge Thomas Power.
Power found a separate project planned by Innovo Development Group violated the city’s charter amendment that requires a public vote for any new construction taller than 60 feet, and ordered the city to block any other projects that would be affected.
The city appealed, and state Court of Appeals judges determined rooftop structures, such as stairwells and parapets, don’t count toward a building’s height. But they agreed with Power that rooftop insulation — planned for both Innovo’s and 326 Land Company’s respective projects — do count.
Maloney tossed the company’s argument that the charter amendment is unconstitutional, writing the issue was already settled in 2018 when the company previously sued to challenge its validity. The state Court of Appeals decision in October 2022 on Innovo’s project didn’t impact that finding.
While 326 Land Company argued its work on the building’s foundation was enough to give the developer a vested right to the building, Maloney ruled the work fell far short. Not only did contractors dig only a portion of the holes for the building foundation’s pier caps, but those structures could just as easily support a building 60 feet or shorter.
That’s similar to what Maloney told the developer and city in May 2023 when he threw out their proposed settlement agreement that would have let 326 Land Company go ahead with the project. He said the agreement wasn’t in city voters’ best interests, and also smacked of collusion between plaintiff and defendant — a claim both repeatedly denied.
In the latest orders, Maloney also rejected the developer’s contentions that state Court of Appeals judges invalidated the charter amendment. While the developer’s attorneys argued that the ruling found the charter amendment conflicted with the city’s zoning ordinance, Maloney wrote that assertion misinterprets what the court ruled.
“First, the Michigan Court of Appeals affirmed the circuit court’s decision to grant city summary judgment because the proposed building exceeded 60 feet and, therefore, violated Section 28 because the city approved the project without first submitting the proposal to the voters,” Maloney wrote. “Plaintiff’s interpretation of the opinion cannot be reconciled with this holding. Second, plaintiff has misrepresented the state court’s conclusion.”
The judge was also unconvinced that a state Court of Appeals decision in Farmington vs. Farmington Survey Committee concerning whether individuals can adopt local marijuana regulations through a petition-initiated charter amendment had any bearing on Traverse City’s voter-adopted charter amendment. The two cases deal with two different laws, and the state appeals court’s opinion for the Innovo project deals directly with Traverse City’s charter and ordinances.
Maloney’s trio of rulings, issued Wednesday and March 31, dismissed all but one count of the developer’s complaint. The company argued the charter amendment violates its equal protection rights by treating its project differently from other tall buildings.
Peter Worden, an attorney representing the city, said he’ll have to ask city leaders how to respond to what’s left of the lawsuit. But he didn’t think 326 Land Company stands much chance of convincing Maloney that the city violated the developer’s equal protection rights.
For one, Maloney already told the plaintiff it can’t argue that its building got treated differently because voters adopted the charter amendment, Worden said. That’s an issue the developer should have raised in its first lawsuit. Instead, the judge said the developer can argue it was treated differently than the builder of other, 60-foot-tall buildings with rooftop appurtenances.
“There are no other similarly situated 60-foot buildings with rooftop appurtenances, apart from Innovo’s building, and Innovo was treated exactly identically,” Worden said.
Jay Zelenock also said he saw little chance the developer could succeed on the remaining claim. He’s an attorney who represented Save Our Downtown when the citizens’ group challenged Innovo’s project.
The group tried but failed to intervene in 326 Land Company’s current suit against the city.
“To argue that the city acted in an arbitrary or random and unprincipled manner when they were complying with Section 28 (the charter amendment) and a judge’s order, meaning Judge Power’s order at the time, that seems like an incredibly tall hill to climb,” he said.
Messages for Tom McIntyre, 326 Development Company’s managing partner, and Ross Leisman, an attorney for the company, weren’t returned by Friday.