NOVI, MI-The city’s decision to give away park land to pay a debt stemming from a lawsuit has been rejected by Oakland County Circuit Court Judge John McDonald. The judge says the city was trying to sell park land, and that’s illegal.

To avoid a $69-million judgment against the city, the Novi City Council decided to settle a case with developers Sandstone Associates by giving awayup to 95 acres of North Novi Park. Mayor Richard Clark and members of the council said their hands are tied, and had hoped to resolve the situation without giving away public land.

However, the cost of the lawsuit, compounding at 12% interest, is too much. Residents would have to pay $237 more a year in taxes, on average, if the city charged them to pay the debt.

The case started six years ago, when Sandstone was developing 100,000 sf of housing, commercial and related retail uses along the new Novi Road, just south of 13 Mile. The company accused the city of not building the road intime, resulting in the project’s downfall.

Sandstone sued and won in Oakland County Circuit Court in January 1999, and a judgment of $40 million was rendered against the city. That award was later amended to about $33 million. However, in September of that year, the court issued an additional judgment awarding interest, attorney fees and costs of more than $20 million. With 12 percent interest, accruing since 1995, the cost of the judgment is now $70 million, the city attorney says.

The city is appealing the case, but doesn’t believe it has a chance to win. It’s possible even if a new trial is held, the court could award even more damages. As the appeal would be heard, the interest would still accumulate.

Novi has about $20 million in insurance through the Michigan Municipal League and the Michigan Municipal Risk Management Authority to cover such lawsuits, but the two companies dispute their responsibility.

The city’s Planning Commission may now erase the park from the master plan, and the deal could continue, or the matter could go to a public vote.

If the settlement is not concluded, the debt could be passed to the residents, who would then pay about $200 extra per year for 15 years in taxes.

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