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Machinery Row lawsuit

The Machinery Row development site along the Root River is shown in a 2016 photo. Racine faces two lawsuits seeking compensation from people who were displaced in relation to the project.

RACINE — The City of Racine seeks to dismiss one lawsuit and elements of another it faces related to the former development project called Machinery Row.

The lawsuits were filed in June, asking for funds from the city tied to various parties’ displacement from buildings that were associated with the project. Machinery Row would have been a $65 million mixed-use development in the 20-acre area north of Water Street and east of Marquette Street. The city has since abandoned those plans and moved in a new direction at the location; last week, the Redevelopment Authority approved contracts for some of the work.

First lawsuit

Patrick Fagan, who was a business tenant at 615 S. Marquette St., filed the first case. He originally filed a lawsuit in December, alleging the city owed him more than $659,000 tied to his relocating out of the project area.

A county judge dismissed the claim in May after determining that the defendants were not properly served summonses in the case. It was dismissed without prejudice, allowing Fagan to refile.

He did so in June, asking for $594,948.95 tied to three moves he has made since leaving the site, plus the costs of two other claims that had not been tabulated at the time the case was filed. Fagan has so far been paid about $65,000 related to relocation claims, according to the complaint.

He asked for judgment in an amount to be determined for his relocation expenses, plus damages and litigation costs.

Fagan is represented by attorney Todd A. Terry of Guttormsen & Terry law firm.

In a response filed this month, the defendants requested dismissal of the action, along with reimbursement of their expenses. The defendants admitted to Fagan’s claim that they did not offer or process his relocation benefits prior to last June but denied that, that rose to a “cognizable claim” under the law.

The response describes the funds paid to Fagan as “all actual and reasonable costs for all moves for which he has properly submitted claims.”

Fagan filed his claim against two defendants: the City of Racine and its Redevelopment Authority. In the defendants’ response, the City Attorney’s Office alleged that the city is not a proper party to the claim and that portions of Fagan’s claims are not ripe for the court’s consideration. The city attorney further responded that some of the claims were frivolous, and that he “failed to exhaust his administrative remedies as required by law” for some claims.

Among a variety of other defenses, the city attorney responded that Fagan failed to mitigate his damages and that he failed to state claims upon which relief could be granted.

Second lawsuit

In the second lawsuit, a group of nine plaintiffs filed a federal claim in December against the city, the RDA and some city officials seeking relocation compensation. The case was dismissed in March based on a stipulated agreement between the parties.

In June, the case was refiled in Circuit Court with fewer plaintiffs and only the city and its RDA as defendants. In the new version of the lawsuit, the plaintiffs claimed that the businesses had to cease their operations because they did not receive financial assistance. They alleged that they did not receive full payment on their relocation claims and asked for about $1.07 million as relief, plus funds to re-establish businesses and some litigation expenses.

In a response filed this month, City Attorney Scott Letteney characterized the claims as “a simple dispute over the scope of RDA’s obligation to pay expenses” related to property acquisition. The issue, Letteney’s response states, boils down to the fact that the plaintiffs don’t like the amount of relocation benefits some of them received.

He asked for the complaint to be dismissed in part. The plaintiffs failed to state a claim upon which relief could be granted, he wrote. Although state law entitles a person who was displaced from real property upon acquisition by a governmental entity to payment for certain relocation expenses, Letteney says the scope is limited in kind and duration.

Some of the plaintiffs in the case did not file any claims; other claims were filed too late to be paid, the response states.

He further claims that nothing in the lawsuit accuses the city itself of being involved in the acquisition of the properties at issue and requested that the city be dismissed from the action.

Letteney also responded that payments are permitted only “for expenses actually incurred in relocating and re-establishing at a replacement site.” Ceasing business operations, he wrote, does not satisfy the requirements to re-establish elsewhere or incur expenses.

He additionally requested that four of the six plaintiffs be dismissed, along with a portion of the complaint.

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Reporter

Sari Lesk covers the City of Racine, Gateway and UW-Parkside. She is new to the community and moonlights as an amateur baker.

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