City/RDA approve legal settlement with Milligan

‘Pall of purgatory’ to lift

NORWALK, Conn. — The Common Council has unanimously approved a settlement with real estate broker Jason Milligan, ending the “POKO” lawsuit saga begun in 2018.

The settlement terms:

• Milligan is paying the plaintiffs $600,000
• Milligan has agreed to permanently provide 88 parking public spaces on the former Leonard Street municipal lot
• Chubb Insurance Co. is paying the plaintiffs $425,000
• Chubb is paying a Milligan legal entity $25,000

Milligan was sued by the City and the Norwalk Redevelopment Agency, accused of unfair trade practices and “sham” real estate transfers in his 2018 purchase of properties slated to become parts of Wall Street Place phases II and III, often referred to as “POKO.” Richard Olson of POKO Partners was also sued, and other defendants were added as the case progressed.

Milligan was the last defendant. The settlement was developed through two day-long mediation sessions with Judge Elain Gordon. A third mediation session was recently held to work out details in the complicated legal case.

The Redevelopment Agency met remotely Wednesday for an executive session concerning the settlement. The Agency’s YouTube video does not show what happened after the executive session.

Thursday’s hybrid Council meeting was attended by 11 members. The ensuing executive session lasted nearly two hours.

“The plaintiffs in this case, the City and the Redevelopment Agency, will receive $1,350,000 in cash proceeds,” Corporation Counsel Mario Coppola said before the Council vote. “Today, the plaintiffs have received a total of $325,000 from other defendants; the public parties previously received $200,000 from CC Rivington and $125,000 from Richard Olson and the POKO defendants. The plaintiffs will receive an additional $1,025,000 from the Milligan defendants, which includes a contribution on behalf of the Milligan parties from Chubb insurance company.”

Settlement documents indicate that Chubb is the Redevelopment Agency’s insurer.

A detailed easement agreement spells out the terms of the 88 public parking spaces.

“Notably, these 88 public parking spaces have a value totaling $1,936,000, based on the value set forth in the underlying Land Disposition Agreement as well as the liquidated damages clause that set forth in the easement agreement,” Coppola said.

The spaces are valued at $22,000 each and their value will increase 2% per year, Coppola said. Milligan has agreed to additional terms, including that the public will not be charged more for the spaces than the Norwalk Parking Authority charges elsewhere in the city.

Settlement documents indicate that the $25,000 Chubb will pay Milligan’s IJ Group LLC settles his lawsuit challenging the 2019 Redevelopment Plan.

Judge Sheila Ozalis dismissed that Milligan lawsuit a year ago. Milligan filed an appeal, which is still pending.

Milligan turned down an offer in compromise to settle the “POKO” lawsuit for $1.9 million in March 2020.

Milligan did not reply to a Thursday email from NancyOnNorwalk, giving him the chance to comment on the settlement.

After the Council vote, Norwalk Director of Communications Michelle Woods Matthews released a joint statement from Milligan, the City and the Redevelopment Agency. It said, in part:

“As part of the settlements, the parties agreed to withdraw all pending lawsuits and move forward on their shared commitment to creating a vibrant and modern Wall Street corridor that creates real and sustained growth for the business community and residents.

“The City acknowledges that Mr. Milligan has made a positive impact over the years in the Wall Street neighborhood, from renovating numerous buildings, to bringing new residents and dozens of new businesses into the area, including a college, boutique manufacturers, and restaurants.

“The City has committed local funds towards this effort of revitalizing the Wall Street neighborhood and received State and Federal investments to core components that will help this project come to fruition.

“All parties look forward to how this resolution will help bring Norwalk one step closer to revitalizing the Wall Street corridor.”

Milligan owns about 40 properties in the Wall Street area.

Council member Tom Livingston (D-District E) said the City is “receiving more than the legal fees expended in this lawsuit.” Without the settlement, the lawsuit “could have gone on another five years. We all know that. But despite the time that the City has spent on this and the money we’ve spent on it, the City did the right thing. I think the City enforced the terms of the LDA. It took a long time.”

“We’re so glad to get this behind us,” Mayor Harry Rilling said. “It’ll now help us move forward, to make a vibrant and modern Wall Street, which has been a commitment of my administration from the very beginning.”

Roadblocks holding up the Head of the Harbor South development cleared in 2014, during Rilling’s first year in office, and the long-delayed Wall Street Place, commonly called “POKO,” struggled through approvals and work began. Construction on POKO stopped in 2016 and as the parties worked to restart it, Milligan bought the related properties, throwing a monkey wrench into the parking plans for the development.

“Unfortunately, we had a stumbling block,” Rilling said Thursday. “There were many times when people were trying to get us to walk away from this, but we never wavered, we kept moving forward in spite of a lot of people criticizing us. We continued to move forward, because we knew that we were right. This should send a very strong message to any current and future developers, that when they enter into an agreement with the City of Norwalk, they will be held accountable, we will make sure that they live up to that agreement.”

Multiple Council members thanked Coppola for his work.

Council President Greg Burnett (D-At Large) called the settlement vote a “great moment” and thanked residents for their patience.

Josh Goldstein (D-At Large) said there has been a “sort of pall of purgatory over the development of Wall Street due to pending litigation.” That an agreement had been reached without a trial is good, and the “resolution may not be one that every single person is happy with. However, that’s the nature of settlement.”

Settlement Agreement with the Milligan Defendants (B&W) 4-20-23

The joint statement also said:

“Throughout 2022, the City worked closely with residents, business owners, and community leaders to reimagine the Wall Street area’s streets, intersections, sidewalks, and public spaces.

“The timing of this agreement aligns well with the Wall Street revitalization efforts that will begin to emerge this year, starting with phase one, the section of Wall Street between Brooks St and Main St and the façade improvement plans for the Yankee Doodle Garage.

“All parties remain committed to making the Wall Street corridor the vibrant location it once was by investing in its future.”

Attending were Greg Burnett (D-At Large), Ed Camacho (D-At Large), Josh Goldstein (D-At Large), Nora Niedzielski-Eichner (D-At Large), Barbara Smyth (D-At Large), Nicol Ayers (D-District A), David Heuvelman (D-District A), Darlene Young (D-District B), Jenn McMurrer (D-District C), Tom Livingston (D-District E) and Lisa Shanahan (D-District E). Absent were Diana Révolus (D-District B), John Kydes (D-District C), Heidi Alterman (D-District D) and Bryan Meek (R-District D).

Reminder:

NancyOnNorwalk requires full names from commenters.

For more information, go here.