By Joel Hall
Earlier this month, Riverdale Ward 1 Councilman Rick Scoggins filed notice stating that he intends to sue the mayor and city council for giving money to the city's Downtown Development Authority (DDA).
The notice was filed on Feb. 5, on behalf of Scoggins, by Stockbridge-based attorney, Robert Mack, Jr., whose law firm, Mack & Harris, P.C., represents the City of Forest Park.
According to the notice, Scoggins retained Mack to represent him in a potential lawsuit against the city for "mismanagement of funds," by advancing $735,750 to the Riverdale DDA.
Deana Johnson, Riverdale city attorney, said the development authority was created two years ago to purchase land and attract new businesses on behalf of the City of Riverdale. She said the DDA recently used money lent by the city to purchase land to be used for a new regional park on Wilson Street.
In March of 2008 -- for about $500,000 -- the authority purchased 16.6 acres of land around Wilson Street, with the intention of combining it with previously-owned green space to create a 60-acre public park.
The purpose of the park was to compensate citizens for the lack of park services expected during the construction phase of the city's Town Center development, a mixed-use, commercial and residential community.
"Riverdale's point with the Town Center is to attract new businesses to the area, so that's been the focus of our DDA," said Johnson. "It is an arm of the city. To treat it like some rogue agency, I don't understand, because all the members are appointed by the council, and they take direction from the council as to what to do."
The ante litem notice, a prerequisite for a lawsuit, asserts that: "Continuing to this present day, the city has continued to donate money to the authority for purposes other than acquiring property, with no means or methods for having all such monies paid back to the city by the authority, in violation of the state's constitution."
When asked to clarify his accusations, Scoggins said, "At this point in time, I cannot make any statements." A telephone call was made to Mack's office on Friday, but a receptionist who answered the phone said he was "out sick" that day, and would be given the message.
Johnson said that since the DDA's creation, the city has lent $200,000 to the authority to cover operating expenses; $50,000 in 2007 shortly after the authority's establishment, and $150,000 in February of this year. She said the $735,750 was lent to the authority, specifically, to purchase the Wilson Street property, and that all left-over money was returned to the city shortly after the purchase.
"Our DDA is only two years old, but once they get established, they can do fund-raisers, and they can repay loans like any other business, but it takes time for them to be profitable," said Johnson. "They are loaning money to the DDA, so they can operate. That is the way that all DDA's operate."
"They [Scoggins and his lawyer] are characterizing the intergovernmental agreements between the city and DDA as donations, when the paperwork shows they are clearly loans," she said.
Johnson said she questioned Mack motives in the lawsuit. She said that in 2004, the city council voted against Mack becoming the city's attorney.
"When Phaedra Graham was mayor, she proposed making Robert Mack the city attorney," she said. "That proposal was voted down by the council."
Councilman Kenny Ruffin, whom Scoggins is suing in a separate case, for alleged defamation of character, also questioned the merit of the suit. He said Travelers Insurance, the company insuring the City against litigation, recently said it will deny coverage to the city, if Scoggins were to sue.
"It is suspicious that [Mack] once applied for city attorney here, and now he wants to sue us," said Ruffin. "The money used to defend this lawsuit comes from the general fund. It creates a situation where the council is using taxpayer money to defend themselves from a council member. I'm at a loss of how this lawsuit helps the citizens or improves the quality of life."
Roland Downing, chairman of the Riverdale DDA, said the money lent to the authority will help it operate until it can sell bonds and "stand on it's own two feet.
"I don't know what Mr. Scoggins is trying to prove," said Downing. "He has been at those meetings when every piece of information was disclosed. There is noting about the DDA that Mr. Scoggins doesn't know and isn't fully aware of."