| Detroit Free Press
Warren Mayor Jim Fouts issued a veto Friday afternoon of a vote by the City Council this week that had blocked a tentative legal settlement with marijuana investors.
Fouts, in effect, seeks to unblock the block, hoping the deal can get approval in a future City Council vote. The council likely will discuss the veto and vote on whether to override it at its next meeting, on Dec. 8, according to group’s customary procedures.
Fouts’ veto sends the city back into debate, and likely back to court, over a subject that has caused wrangling in countless Michigan cities and townships: whether to allow marijuana businesses and, if allowed, how many.
Warren council members voted 5-2 Tuesday night to block a proposed settlement with investors who sought to overturn the city’s marijuana ordinance. It puts a limit of 15 on the number of licenses allowed for marijuana sales outlets, called dispensaries. The tentative settlement would’ve allowed 28 outlets.
At the same time, the proposed deal would’ve dismissed a lawsuit involving 31 marijuana business applicants, who have sought millions of dollars in damages from the city over the way officials handled their application process last year. But the City Council can override Fouts’ veto by the same 5-2 margin it used to block the settlement, Councilman Ron Papandrea said.
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“He’s keeping the issue alive (and) giving people a chance to lobby the council and try to change the vote,” said Papandrea, who said he strongly opposed the deal. He predicted that councilmembers would again vote 5-2 to override Fouts’ veto. A simple majority of 4-3, however, would not be enough.
The complex deal, which Fouts had said he supported reluctantly as the best way to extricate the city from a potentially costly lawsuit, would have reaped several financial benefits for Warren. They include a signing bonus of $1 million that was to be paid to the city, pledged by whichever of the 28 license applicants ultimately gained licenses for dispensaries; an estimated $70 million in investment to city buildings that would become the dispensaries; and 300 jobs at a minimum of $15 per hour, with hiring priority given to Warren residents, according to the proposal.
The settlement was a consent agreement, drawn up following months of negotiations led by Macomb Circuit Judge Carl Marlinga.
Fouts could not be reached Friday night. But in a letter to Warren City Clerk Sonja Buffa, notifying her of his veto, Fouts said the city should accept the settlement to avoid paying as much as $100 million in damages to the marijuana investors.
That hypothetical outcome “would affect the city’s fund balance, credit rating, bond payments, and worst-case scenario, bankrupt the City of Warren,” Fouts said in the letter dated Friday.
Yet, the City Council’s majority this week argued that the deal is flawed, as is the judge’s ruling that spawned the deal. And the city is likely to prevail if it returns to court and again takes on the dispensary investors, said Papandrea, who was a Warren assistant city attorney for 28 years.
“We turned this down because we wanted to send a message — this is not a good settlement for the city of Warren,” he said.
“I support the mayor wanting jobs and new businesses. I think marijuana can be good for the city. These investors have fixed up a lot of properties. We put in our ordinance that they have to be away from residential areas and schools and churches.
“And marijuana does help some people,” Papandrea said. But the City Council already had compromised with marijuana investors, raising its initial limit on licenses from 10 to 15, he said. Going to 28 was “just too many,” Papandrea said.
Before overseeing negotiations for the consent agreement, Marlinga heard testimony in a consolidated lawsuit that 31 license applicants filed against the city, ruling against the city on several grounds, among them that the city had violated the Michigan Open Meetings Act because license applicants were interviewed behind closed doors. If the City Council overrides Fouts’ veto, Warren’s attorneys would almost surely appeal the case to the state Court of Appeals, where three judges would rule on whether Marlinga erred in issuing his ruling that was adverse to Warren.
“Once we go to the Court of Appeals and show these people we mean business, I’d be willing to reopen the negotiations and try to reach a reasonable settlement,” Papandrea said.
Contact Bill Laitner: [email protected]