Collateral Competitive Advantage

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LETTER TO THE EDITOR, submitted by Mitchell Schneider
(An edited version of this letter appeared in the Chronicle - Telegram on 4-4-99.)


First Interstate's Schneider Files Counterclaims Against Phillips

Despite allegations by local attorney and Avon Commons' opponent Gerald Phillips, First Interstate Development Company ("First Interstate") has conformed with all requirements of federal and state law regarding "wetlands" at the 85 acre Avon Commons and Avon Business Park Development site.

In this regard, an Army Corps of Engineers Permit was issued to First Interstate on March 20, 1998. First Interstate's activities in the filling of 2.77 acres of wetlands at the Avon Commons site have conformed to the terms of that Army Corps Permit.

Under the Permit, the wetlands could be filled provided First Interstate acquired replacement acreage. First Interstate, in fact, obtained the replacement acreage required under its Army Corps Permit through the Sandy Ridge Wetlands Mitigation Bank in North Ridgeville. Indeed, the amount of replacement acreage purchased by First Interstate (consisting of seven acres) was more than twice the amount of the acreage it filled at the Avon Commons site.

In the past, First Interstate has received a number of awards pertaining to its projects, including the Environmental Improvement Award, presented to First Interstate in March 1999 for its environmental sensitivity in developing Creekside Commons Shopping Center in Mentor, Ohio.

At the crux of the misstatements of fact by Gerald Phillips is a fundamental misunderstanding of the difference between "jurisdictional waters" and "wetlands."

When First Interstate presented its initial delineation of wetlands for Avon Commons, it did not include a 0.11 acre pond, because it was not a wetland. After complaints by Attorney Phillips and local resident Linda Eadelis, the 0.11 acre pond on the Bennett Parcel of the Avon Business Park site was included in the jurisdiction of the Army Corps of Engineers as "jurisdictional waters." Such a designation, however, as a matter of law, was not a designation that the 0.11 acre pond was a "wetland."

Indeed, in a July 15, 1998 letter from the Army Corps of Engineers to First Interstate, it was stated that the 0.11 acre pond was to be included in the jurisdiction of the Army Corps as jurisdictional waters. In so stating the Army Corps did not, however, conclude that the pond was a "wetland." Accordingly, in contrast to Attorney Gerald Phillips' allegations, there were never "wetlands" on the Avon Business Park site.

Another area of misstatement by Attorney Gerald Phillips relates to the legal effectiveness of the Army Corps Permit issued to First Interstate to re-establish drainage and fill wetlands on the 85-acre Avon Commons property. Specifically, Attorney Phillips states that the Permit has expired.

In accordance with its Army Corps Permit and prior to December 13, 1998, First Interstate graded the 2.77 acres of wetlands originally permitted by the Army Corps of Engineers on the Avon Commons site to reestablish drainage on the parcel.

The 0.11 acre pond of jurisdictional waters on the Avon Business Park site was filled by First Interstate, with knowledge and approval of the Army Corps of Engineers, in early February, 1999, after the Avon Planning Commission approved the final site plan of Avon Business Park. First Interstate's conduct in this regard conformed to its Army Corps Permit in all respects.

The activity of First Interstate conducted in December, 1998 and February, 1999 were within its Permit conditions, as the Permit was extended by the Army Corps of Engineers until at least September 15, 1999. Moreover, First Interstate's commencement of work in December, 1998 extended the permit, by its own terms, for at least an additional one year.

In June of 1998, the City of Avon also issued a clearing and grading Permit to First Interstate with respect to these grading activities. The Permit remained effective for a period of not less than six months, or until December, 1998. Pursuant to the express terms of the Permit and the Codified Ordinances of the City of Avon, construction activity at the site would automatically extend the permit for an additional six month period, because "construction activity" would have taken place within the initial period.

First Interstate met this "construction activity" requirement by clearing several acres of the site in anticipation of its Family Fun Day event just prior to the November election, thus extending the Permit's effectiveness until at least May, 1999. Additional clearing and grading activity was conducted in February of 1999 pursuant to this Permit and after receiving approval for the Avon Business Park from the Avon Planning Commission.

Attorney Gerald Phillips, representing adjacent residents, as well as himself and his wife, together with Attorney Timothy Grendell, representing Gerald and Maureen Phillips only, filed a Complaint on February 23, 1999 in the Lorain County Commons Pleas Court pertaining to Avon Business Park only. This Complaint concludes WITHOUT factual support that First Interstate acted improperly.

First Interstate, via its attorneys, Richard D. Panza and Matthew W. Nakon of Lorain, responded to the Complaint on March 25, 1999 by denying many of the allegations made by Attorneys Phillips and Grendell. First Interstate also filed a motion seeking to remove Phillips and Grendell from representing the residents. The motion claimed that Gerald Phillips could not conform to the requirements of the Code of Professional Responsibility for Ohio attorneys in representing the adjacent residents because Attorney Phillips was acting as both an attorney and as a fact witness in the case.

In addition, the motion claimed that Timothy Grendell's firm could not represent Gerald Phillips because Mr. Grendell's partner, Steve Targove, had appeared as an expert witness on Phillips' behalf at the February 25, 1998 Board of Zoning Appeals meeting. Disciplinary Rule 5-101(B) of the Code of Professional Responsibility provides in part: "A lawyer shall not accept employment in contemplation of pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness."

In addition, First Interstate filed a four count counterclaim against Attorney Gerald Phillips:

In addition, First Interstate's Answer in the lawsuit includes a cross-claim against the City of Avon alleging that its wetlands ordinance is unenforceable. Prior to filing the cross-claim, First Interstate attorney Sheldon Berns had forwarded a March 8, 1999 letter to Attorney Daniel Stringer, the Law Director for the City of Avon, requesting the City to reconsider the wetlands ordinance.

The letter, while suggesting that First Interstate valued its relationship with the City of Avon, stated that First Interstate nonetheless believed Chapter 1228 (the wetlands ordinance) to be invalid and unenforceable because

First Interstate's cross-claim against the City of Avon similarly argues that the ordinance is unconstitutional and is overridden by the Ohio Revised Code plan for wetlands because wetlands are comprehensively regulated by the State of Ohio and the Federal Government.

In fact, on June 15, 1998, the Avon City Council discussed the current wetlands ordinance on the books in the City of Avon. The ordinance provides that any area containing wetlands within the City of Avon, no matter how large or small, can not be disturbed by any development under any circumstances.

At the June 15, 1998 meeting, Attorney Daniel Stringer, Law Director for the City of Avon, commented regarding the ordinance saying: "We're involved in a taking situation of wetlands that exists on some property somebody wants to develop. That's the problem with the present ordinance today as I see it." The June 15 meeting concluded with Council agreeing to study the ordinance further in order to find ways to correct its overreaching."



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