Warren City Council rejects mayor’s DDA board appointments

WARREN — The Warren City Council voted July 9 to table its vote on the reappointment of four current members of the Downtown Development Authority board and give Mayor Lori Stone time to find new members while maintaining a quorum.

DDA board members are appointed to a four-year-term. According to Warren City Council Secretary Mindy Moore, the reasons given for not approving the reappointments of Nick Lavdas, Gregory Jackson, Joe Vicari and Mike Wiegand were the board’s misappropriation of nearly $500,000, attendance, rarely asking questions and always voting “yes” to what the mayor wanted.

“I have to say that I’m a little more than disappointed that the mayor has simply reappointed people that have been on the DDA,” Moore said. “We were looking for change. This is not change, and this has been one of the most controversial boards, certainly in the last four years.”

The controversy included a Michigan Supreme Court ruling that former Warren Mayor James Fouts misappropriated nearly $500,000 through the DDA by spending it without the City Council’s approval. The court ruled it is the council’s budget.

When Fouts was previously interviewed about the case, he asserted that he believed it was the mayor’s budget.

Councilman Jonathan Lafferty said, “I am actually shocked that the new mayor sent these individuals to us knowing the malfeasance that occurred in this department.”

According to the mayor, she met with each of the members up for reappointment and talked to them as to their why and purpose for serving on the DDA board, their interest in serving under the new administration and her expectations.

“Indeed, that’s why I appointed them,” she said when asked about the reappointments, and their abilities to meet her expectations and attend meetings.

 

Misappropriation
City Council members addressed the misappropriation of funds through the DDA. They said the funds were misappropriated without the council’s permission to spend the money.

“There was a serious issue where the DDA misappropriated almost a half million dollars and the (Michigan) Supreme Court has ruled that that was in fact a misappropriation of funds,” Moore said at a recent City Council meeting. “I’m concerned that as many times as this council brought it up, lawyers brought the problem up, that no one on the DDA, none of the members questioned why those monies were spent without authority from this City Council. And I’m disturbed by that.”

“They absolutely attacked our character,” Lavdas said of the council’s claims. “If you were naive, you would think we embezzled $500,000 the way they made it look.”

The night council made the decision to table the vote, Lavdas was with a group of about 50 individuals that included businesspeople, judges and prosecutors at a barbeque where they were watching the City Council meeting.

“My phone started humming with attorneys that want to file suit,” Lavdas said. “Now do I want to do this? The jury’s out.”

Lavdas said he has known Moore “forever” and Lafferty for a few years.

“We’ve been friends. We’ve done business together. They could have come to me and talked to me,” Lavdas said. “Instead, they had to do this showboating.”

A member of Vicari’s public relation’s team stated on his behalf, “We’re planning to seek legal options regarding this situation.”

Vicari is the owner of Andiamo’s restaurant in Warren.

Mike Wiegand, owner of The Gazebo Banquet Center in Warren, was contacted about this story and later left a voicemail message stating he was returning the call. However, when subsequent efforts were made to contact him, he could not be reached.

A city attorney was present at every DDA meeting, according to Lavdas. If something was illegal, the lawyer should have made the DDA board members aware of it.

According to Jackson, owner of Prestige Cadillac in Warren, it is within the DDA’s purview to vote to approve or disapprove the spending of various amounts of money. However, if it is then required by the city charter to have that amount approved by City Council, he was unaware of it and contends that is not within the DDA’s purview.

The line items included in the misappropriation were landscape services, advertising promoting the city of Warren and, according to the council, advertising promoting the former mayor. It also included engineering services, DTE upgrades, and purchases from Lowe’s.

“I always thought that was within the DDA purview, to promote a healthy city environment,” Jackson said.  “And part of the healthy city environment was beautification of its avenues, its parks and its public structures.”

Moore contends that the DDA board members knew that they were expected to follow the council’s budget. It is the law and within the DDA guidelines.

“It wasn’t a mistake. They consciously did not follow the council’s budget. They did this with other items as well. We had a problem with them not following the council’s budget for the general fund,” Moore said. “Not only did they violate state law, they violated their own rules. The city has to follow the council’s budget.”

  

Attendance
After researching the DDA board’s meeting minutes from January 2019 to July 2024, Moore compiled the following attendance records:

Lavdas attended 14.3% of meetings; Jackson, 33.3%; Vicari, 35%; and Wiegand, 88.1%.

Although there is no attendance requirement for the DDA board, according to Moore, it shows the level of engagement.

“My attendance, I have no argument there,” Lavdas said. “Everybody on the board knows I said, ‘Hey, I’m doing an injustice, I’m not here. I can’t make the meetings because of the type of business (I have).’”

Lavdas has more than 40 businesses including Lavdas Jewelers, in Warren, which he describes as one of his main businesses.

“So, if I’m in the middle of selling an engagement ring, I can’t say, ‘Hey, sorry, got to leave right now to go to a DDA meeting,’” Lavdas said.

“Doing the job is not the issue but time is a major issue for me,” Lavdas said.

Jackson noted that many of the meetings were held through Zoom calls and that they may not have been included in Moore’s attendance calculations.

“I think my attendance rate has been significantly higher than that over my tenure. But I don’t have all the attendance records,” Jackson said. “But I guess at this point, it’s neither here nor there.”

Jackson was not aware that his reappointment had been tabled until he was contacted for this story.

“So this comes as new news to me,” he said.

 

Not asking questions
DDA members asserted they asked questions when questions were warranted.

“The mayor’s office has always done a very good job in having pre-information sent to all of the board members for our review,” Jackson said. “We reviewed those, and if we had any questions, a lot of times those questions were answered before we actually got to the meeting, which is what a quality board does in terms of saving time.

“So I think I asked an adequate amount of questions. And sometimes, I asked questions which were not for my benefit, but I thought would be a benefit for the rest of the group,” Jackson said.

Lavdas contends the matters that came before him on the DDA were not complicated but rather “basic 101 business.”

He told of an instance when a developer who was doing nonrecourse loans wanted to do business with the city, and he asked the questions that needed to be asked and the deal was not approved.

 

Voting with the mayor
At the July 9 meeting, Moore also expressed concern about the members up for reappointment voting consistently with the mayor and never voting “no.”

“The DDA does things for redevelopment. The things that came to me are not complicated,” Lavdas said. “So there’s not a lot of things I found that needed to be challenged.”

Lavdas said he and the other DDA members made their decisions based on business.

“It had nothing to do with the mayor. I definitely voiced my opinion several times. So that’s not true at all,” Lavdas said. “But there again, without sounding arrogant, these decisions that we’re making are 101 basic business. This is not a big multimillion-dollar business (deal) that we’re doing. It’s common sense.”

He said how interest rates go, so goes business.

“When interest rates were 2%, and Mayor Fouts, love him, hate him, it doesn’t matter, this is once again, it’s a business decision. You’ll have developers, which we did, standing in line to do development,” Lavdas said. “But because they (the City Council) did not want to give in to Mayor Fouts, all they did was kill (business) and hurt the people of the city.”

With today’s increased interest rates near 8%, developers aren’t as interested in doing deals, according to Lavdas.

 

October
The mayor was asked to find new members to appoint, and a new vote will be taken in October. This is to maintain a quorum, which is a minimum number of members for a vote to be taken and approved. It is necessary to continue the business of the DDA, which includes buying buildings and advancing the business development of the city.

How will the board’s current members serve until then when they know they will not be reappointed?

“I won’t be attending any of the meetings,” Lavdas said. “I’ll most likely step down.”

According to Jackson, he will work diligently to continue to serve the DDA, but there is a lot of work to be done to continue the progress in Warren.

“It is my intention, yes,” Jackson said when asked if he will attend all the meetings.

“Warren is one of America’s great cities. I wish the existing, and the ongoing, and the new board that’s seated great success,” Jackson said.

The mayor has about six weeks left of the three months she was given to find replacements for these DDA board members.

“I will do my best,” said Stone, when asked if she will be able to find replacements in time.