Mayor sues City Council but will the city pay the legal costs?

Mayor Jerome Prince

Crusader Staff Report

Mayor Jerome Prince on Thursday, October 15, filed a lawsuit against the Common Council seeking to persuade a judge to invalidate the city’s community benefits ordinance. Prince says the ordinance violates his executive authority, but the council disagrees.

It’s the latest in deteriorating relations between the mayor and council that began months after Prince took office January 1. The clashes have now spilled into the court and the city’s coffers may take a hit as Prince makes the unprecedented move with a lawsuit.

The complaint was filed in Lake County Superior Court. As of Tuesday, the document had not been processed and made available online. However, questions remain whether Prince will use city funds to sue the city.

Many city departments have a legal budget that can be used at their discretion. These funds are usually allotted after the city approves its annual operating budget. Because Prince’s complaint is not available online as this story is being written, the Crusader is unable to report what law firm or outside counsel the mayor has retained to represent his case.

Michael Gonzalez, the city spokesperson, did not respond to an email asking whether city funds will be used to pay the legal costs of Prince’s suit.

According to several news reports, Prince in his lawsuit says that the CBA ordinance imposes mandatory terms of agreement on his negotiations with development partners. Prince said the ordinance also forces him to hire or contract a compliance officer who has detailed responsibilities and reports to the Gary Common Council. The suit also says the ordinance attempts to approve the city’s land transfers as well as establishing and appointing members to two newly council-created communities to advise and oversee the CBA requirements.

Prince argues the mandatory terms violate his executive authority. He says the CBA ordinance should be voided because he has no say in the appointments.

The issue came to a head earlier this year after delays of the Broadway Lofts development project. In June, Broadway Lofts’ developer MVAH Partners asked the city of Gary for a 10-year tax abatement on the site of the new housing in the 700 blocks of Broadway and Massachusetts. Instead of paying $911,000 in taxes over the 10 years, the tax bill for MVAH will be about $242,000, a $669,000 savings.

The CBA ordinance requires the hiring of Gary residents on construction projects and has a focus on training Gary residents to work on construction projects. It asks the developer to reinvest 15 percent of the tax savings in a community benefits agreement that would support schools, parks, health care, affordable/mixed income housing, African American/minority/female-owned businesses, access to supplier contracts, or environmental protection from industrial projects.

Prince and developers said it was unfair to apply the CBA to the project, which already included a community benefit component negotiated before former Mayor Karen Freeman-Wilson signed the ordinance into law two weeks before she left office.

In his suit, Prince reportedly argues that the legislative body of a city may not elect or appoint a person to any office or employment, except as provided by statute, the suit alleges. He reportedly says the CBA ordinance “violates the separation of powers of a second-class city government and is thus void.”

One day after filing a lawsuit, Prince discussed his complaint on WLTH after one caller, Carolyn McGrady said, “I think it’s terrible for an administration to take the side of developers and push aside the issues of local hiring, job development and community benefits in favor of these developers who want everything for themselves. What you’re doing is making sure the people of Gary will never have anything.”

Prince responded, “The action that we took wasn’t intended to be adversarial. This is simply to get an opinion or a decision of a court who’s charged with the responsibility of doing so. Clearly, we want people here to work in Gary also. It’s been no secret since the beginning of this administration, we’ve had some questions and concerns about it and to that extent expressed those publicly; and in addition to that [we] offered and suggested that we go back to the table and work on it from this administration’s perspective. Those offers and suggestions weren’t accepted. To this extent, we have to get beyond this and end all the tumultuous activity that has occurred and the only way it appears that we’re going to do that is to get a court decision and rendering and we hope to do that very soon.”

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