by Robin Kemp
The Morrow City Council tackles another lengthy to-do list on Tuesday, July 28. Work session discussions are likely to include what to do about $9,000 per month in common area maintenance (CAM) fees that Southlake Mall management charges the city for the Morrow Convention Center.
A confidential memo from attorney Lajuana Ransaw to City Manager Sylvia Redic offers legal advice on the issue and is included in the public agenda packet. The letter suggests that the current mayor and council are not legally responsible for upholding agreements by previous administrations, and that the city might be able to end the payments by condemning part of all of the Convention Center.
Redic said,”The memo is simply an overview from the attorney, for the council to understand. There are questions posed, but only for the council to consider and do not suggest a problem, per se.”
Ransaw indicates the city bought space from Federated Retail Holdings, Inc. at Southlake Mall on July 11, 2006, and “conveyed a portion” to the Downtown Development Authority. (The city, DDA, and URA own property there, according to the letter. Redic said the DDA used to own it but now the URA does.) The city did not pay common area management (CAM) fees, which are charges a commercial building’s owner assesses tenants for upkeep of elevators, lobbies, restrooms, and other shared areas.
In May 2013, the city sued the mall’s developer, saying there was nothing in the contract that required it to pay the fees. (The previous month, the developer had demanded the dispute go to arbitration.) Federated then sold the mall to VCG, who became the defendant. In December 2018, the parties settled, with the city agreeing to pay $450,000 for all past and future claims, plus $9,000 a month in CAM fees until such time that the developer sells. The city would not pay any CAM fees for HVAC maintenance.
The city, which has paid the fees since Mayor John Lampl and the new council took office in January, wants to know whether it might get out of paying the fees, which amount to $108,000 annually. At its July 14 work session, Morrow Center General Manager Warren Thomas told the council the facility has lost about $156,000 to date this year
Ransaw said that, although “previous Council” had agreed to the settlement, the agreement does not contain specific language to renew the fees each year. “(T)he law is clear that contracts entered into by prior Council cannot bind future Councils,” Ransaw wrote, “and that the obligation to make payments pursuant to a contract must not obligate the City beyond the calendar year.”
Also, if VCG had not accounted for specific expenditures of the CAM fees, Ransaw wrote, it could pose a problem under the Gratuities Clause, which prevents the city from paying for anything from which it gets no benefit or use. “If you contend that CAM fees do not benefit the Morrow Center, nor property owned at the mall by the City, this would violate the Gratuities Clause,” she wrote. “The City is essentially paying and receiving nothing in return for said payment.”
One way for the city to get out of the agreement, Ransaw advised, “would be to condemn the Morrow Center property, or a small portion thereof,” by exercising eminent domain. “We have several attorneys which may commence the condemnation action (on) behalf of the City should Mayor and Council wish to proceed with condemnation of the property to clear title and the covenant to pay CAM fees,” she wrote.
However, she warned, doing so “is a very technical process, and will likely spark litigation.” Because “prior Mayor and Council” had agreed to the new terms on the CAM fees when the city settled in 2018, a judge may not look favorably on the city should it file suit, Ransaw warned: “(T)he Court may deem that the City waived objections and claims of nonconformance with law by entering the settlement agreement in 2018 after several years of litigation and or negotiation of the same.”
The council also will consider a proposal for a private company, Danceando Promotions LLC, owned by Lizbeth Cardenas Olea, to hold the October 2020 Dia de los Muertos festival at Olde Towne Morrow at a cost of $27,500. In the proposal, the company says it will use at least two of the buildings for events and that “decorations will be posted on doors and windows to prevent access to the houses. Both houses will also have signs to indicate facepainting.”
The company also states that “in both houses, cleaning will be done before the event, check that the electricity connections are operable, the porch railings will be checked and fixed to prevent accidents.” The proposal does not say who will do the checking and repairs, how much those checks and repairs would cost, nor whether those repairs are included in the event cost. The proposal also notes, “A hole must be repaired in the middle of the fountain.”
Asked who would pay for these repairs, City Manager Sylvia Redic said, “Since the conversation just started, I don’t have the answers.”
Olde Towne Morrow has been a sore spot for the city for years. Mayor Lampl, who was city manager when the project was built, pleaded no contest to five counts of falsifying fire reports about sprinklers used in the melange of relocated historic houses and modern pedestrian strip-mall construction. In 2010, the site was shut down because none of the structures met fire code, according to the Clayton News-Daily’s Chelsea Prince. As part of the plea deal, Superior Court Chief Judge Albert Collier dismissed three other charges: lying under oath to a special-called grand jury, making false statements, and conspiracy in restraint of free and open competition. The indictment was thrown out on appeal but Lampl was re-indicted on eight charges, including perjury. In a plea deal, Lampl nolle prossed to the three more serious charges and paid restitution of $10,000 to the city and $1,479.28 to the Clayton County Board of Commissioners and completed 30 days’ probation on five counts of sprinkler installation violation The rest of his six-month probation was thrown out.
The area has fallen into disrepair, attracting vandals, stray dogs, and homeless people. Under former Mayor Jeff DeTar’s administration, the city tried to sell the property and was in talks with a zipline operator to use it as a staging area for a canopy park near I-75. Area residents opposed the plan.
The council also is considering a Juneteenth fest at the site. Lampl did not return a request for comment on his plans for Olde Towne Morrow by press time.
Other items on the work session agenda include an ethics policy and a shared leave proposal.
The Council is set to vote tonight on choosing a mobile app vendor, Skipli, which is run by John Ton and Thanh “Sheryl” Nguyen. Nine companies submitted proposals for the city’s new app and five other companies submitted proposals for “A La Carte” marketing services on July 26.
The council also will hold a first reading of on an ordinance to allow additional work session meeting times. In addition, $11,742 in contingency funds are set to be approved to replace a patrol car hit and totaled earlier this year. Chief Jimmy Callaway said the replacement cost is $47,541.07.
At the last work session, Lampl said the Morrow Fire Department had not submitted a proposed 10 percent budget cut and asked Chief Roger Swint to do so within two weeks.
Lampl also told the council that the Finance Committee, which consists of himself and Councilwoman Van Tran, “does not need rules and regulations and that all the same information was available to any Council Member who wanted to view it.”
Tuesday’s work session starts at 6:30 p.m. and the council meets at 7:30 p.m. Both meetings take place in the main meeting room to accommodate social distancing requirements. Since Lampl took office, the work session usually resumes immediately after the council meeting and could run a few hours into the night.
Read the 61-page agenda packet, which includes minutes from previous Council meetings and work sessions, at https://www.dropbox.com/s/5mhqcgu3snwbbga/July%2028%202020%20Council%20Packet.pdf?dl=0
