Investor’s meeting with officials ends in inaction

Times-Herald Newspapers

DEARBORN — The ongoing miscommunication between local businessman Hakim Fakhoury and city officials was front and center at a public meeting Thursday where both sides say they have had different understandings about why they were even there.

City officials said the meeting was called to discuss with the City Council various Fakhoury-proposed changes to a preferred developer’s agreement for a west downtown development project, while Fakhoury accused Mayor John O’Reilly Jr. of simply calling the meeting to berate him publicly — a charge O’Reilly denied.

Fakhoury is seeking the changes in the agreement in order to sell his company, Dearborn Village Partners Limited Liability Co., along with several other Michigan Avenue commercial properties, to an out-of-state development firm. The PDA holds the key to an eventual development agreement with the city on a city-owned parking lot, and with it more than $40 million in redevelopment tax credits.

Corporation Counsel Debra Walling laid out a synopsis of Fakhoury’s proposed contract changes for the council, which she said could expose the city to potential legal liability, and then opened up the meeting for questions from the council.

Fakhoury was unable to provide concrete answers for most of the questions that were posed. He said it was his understanding that the PDA is only a conceptual plan rather than a detailed agreement on specific aspects of the project. That is what the actual developer’s agreement is for, he said.

The changes to the PDA, he said, were suggested by the developer he is negotiating the sale of his properties with and reflect what the developer believes are “current market conditions.”

But when some council members asked him to identify the developer – something they say is necessary before an agreement is signed – he declined. Fakhoury said the developer wished to remain anonymous until a PDA was signed and the properties sold.

The assertion led to a contentious back-and-forth with O’Reilly.

Fakhoury explained that he had a developer that was interested in buying his commercial properties, as long as the PDA was extended under the terms he presented. O’Reilly countered that it was the city’s expectation that the developer would be present at the meeting to represent itself, to which Fakhoury replied “no.”
“How can we evaluate the credibility of the partner if the partner is not here?” O’Reilly asked.

“That will come in due time, mayor,” Fakhoury said.

“But we’ve had due time,” O’Reilly said.

“This is an extension of a preferred developers agreement,” Fakhoury said.

“No, it’s a complete aberration of the initial contract, which is really disturbing,” O’Reilly said in a raised voice. “The city gives up everything and gets nothing, and that’s not how contracts are negotiated.”

Fakhoury said Friday that the meeting was nothing more than a public spectacle meant to embarrass him. He said the contract changes should have been negotiated privately with the city administration and then sent to the council for either approval or a down vote.

Fakhoury also said he had explained in previous meetings with Walling and Economic and Community Development Director Barry Murray that he did not have many of the specific answers to the questions they had posed – many of which were the same as those asked by council members – and that issues with the language could be negotiated.

Walling said Friday that she told Fakhoury about the objections she had with his proposed contract changes and suggested to him that he be able to answer them at the council meeting. But she said Fakhoury did not present the council with the reasoning behind many of the changes, which made it difficult to reach an understanding.

As it stands, city attorneys are taking Fakhoury’s counterproposal and crafting their own in response. Walling said the city’s response should be completed “soon.”