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Houghton to consult lawyer, ethicist over potential conflict

Virginia Cole

HOUGHTON — The Houghton City Council voted 6-0 to seek opinions from the city attorney and an ethicist about any issues posed by Councilor Virginia Cole’s presence on the council, and other potential conflicts of interest..

Cole is the sister of Hall Building owner Edward Cole, who has multiple lawsuits against the city connected to a planned mixed-use development at the former Hellman Transportation Center building at 326 Shelden Ave.

That development, directly east of the Hall Building, would have five stories on the Shelden Avenue level and one on Lakeshore Drive. Plans call for 16 units of long-term housing along with retail space at street level on Shelden. Edward Cole has said Braveworks’ planned development would block much of the eastern facade of his building, and also damage the historic character of downtown.

Virginia Cole also serves as a registered agent for the Hall Building and other limited-liability companies associated with her brother.

“I think I’ve been very clear in my actions that I haven’t created any sort of situation, but I think it’s worth exploring so we can be on the same page,” she said after the meeting. “And we’ll see where it goes from there.”

At the council’s previous meeting, Councilor Mike Needham asked the council to consider seeking an opinion from the city attorney regarding any potential conflict of interest or any other ethical concerns regarding Cole continuing to serve on the city council. He stressed Wednesday that his motion was to give the city a sense of what legal issues the city may face, and was not a vote on if Cole should remain on the council.

“What I’m asking for is some guidance from the city attorney, not only looking at our rules, but also the rules that would govern government,” he said. “And I think that asking the city attorney for an opinion, as I’ve asked, it seems reasonable.”

Needham’s motion came before the council first. It failed on a 3-3 vote, with Cole abstaining. Needham and Councilors Bob Backon and Robert Megowen voted for it. “We definitely need a legal opinion of this, find out legally if she will stay on this council or if she will be asked to resign,” said Megowen, who seconded the motion.

Mayor Brian Irizarry, Mayor Pro Tem Joan Suits and Council Craig Waddell voted against.

Suits and Irizarry said with Cole recusing herself from votes on the Hall Building issue, they didn’t see ethical issues with her conduct.

“She has recused herself from discussion and voting on the recent discussions regarding the Hall Building … I don’t see that she has profited off or (has) potential to make a profit off anything,” Suits said.

The idea of an ethicist came from Waddell. He said he would not support a motion that singled out one council member.

Waddell suggested consulting a lawyer and an ethicist to review and recommend updates and revisions to the council’s conflict-of-interest policy.

In reading on conflicts of interest, he frequently encountered the concept of “bounded ethicality.”

“All of us probably have times when we think we’re doing the right thing, and in retrospect or form someone else’s perspective, we’re not,” he said.

Speaking during public comment, Jennifer Julien, co-owner of Braveworks and a member of the Houghton Planning Commission, brought up the Michigan State University Extension guidelines regarding conflict of interest used by the planning commission. Those list finances, relatives and proximity as it affects property value.

Julien noted that in situations where she had a potential conflict of interest as a Planning Commission member, she abstained not only from the vote, but also from the deliberation, sitting in the audience for that part of the meeting. She pointed to multiple instances where she thought Cole should have asked to be recused. Those included the Nov. 9 council discussion in which Cole asked the planning commission for a timeline on addressing the issue of downtown building heights, and her January vote against the removal of the parking deck.

Julien said Cole’s previous description of working as an independent contractor for the Hall Building minimized the level of business ties with her brother. Julien pointed to results from the state’s licensing directory showing more than 20 instances of Cole serving as a registered agent for limited-liability corporations, many of them headquartered in the Hall Building and associated with her brother.

“My purpose behind all of this is just asking, ‘What can we trust? And how do we know what we’re being told is the truth?'” she said.

Waddell asked to amend Suits’ motion to instead consult the city attorney and an ethicist to help create a coherent conflict of interest policy for the city. He said he had identified four places in city documents where conflict of interest comes up, some of which conflict.

Suits stuck with her original motion, which she said was necessary to confront the issue.

“I want this council to move forward with other stuff,” she said. “I don’t want this cloud hanging over us, and I think until this particular issue is resolved, we’re going to keep talking about this. It’s going to come up every meeting.”

Also at Wednesday’s meeting, city manager Eric Waara told the council the Hall Building had filed an additional lawsuit against the city on Nov. 28 in Houghton County Circuit Court. The suit asks the court to void the abandonment of an easement along the sidewalk leading to the parking deck next to the Hellman building. The council approved the abandonment by a 4-2 vote; Cole abstained.

The complaint said the abandonment also violated city ordinance requiring the city to get an appraisal and obtain fair market value.

“The city abandoned the sidewalk easement purely for the benefit of the private developer seeking to construct a six-story complex … The abandonment occurred with no appraisal of the easement’s value, and no compensation to the city,” the complaint stated.

The complaint said Hall Building’s owner and tenants would take away convenient access to and from the parking structure. After the city council meeting where the easement was abandoned, BraveWorks co-owner Jon Julien said public access would be maintained as long as possible until construction. He also said that work would likely occur after the demolition of the deck, which the city has tentatively planned for this spring.

Cole previously sued the city after the planning commission’s September approval of the proposed development’s site plan. He cited items omitted from the original submission, and also said his property would be harmed by the additions, which would block much of the existing eastern facade of the Hall building.

Judge Charles Goodman issued a stay on the site plan, including construction. Earlier this month, he partially lifted the stay, allowing construction to continue as long as it doesn’t exceed the height of the existing building.

The two sides will meet for a hearing on the original suit in January. There is also a hearing scheduled for Monday on Cole’s motion to exclude an amended record the city submitted earlier this month.

That second submission included a resolution the planning commission approved Oct. 25, after its initial filing with the court. In the resolution, the planning commission accepted supplemental information regarding the site plan, including specifying the collection for stormwater runoff. It also reaffirmed that the site plan continued to meet applicable requirements for approval.

Cole’s motion referenced other cases where parties were barred from introducing new information after the suit had moved on to a higher appeals court.

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