Before the end of 2014, all of the lawsuits regarding the construction of The Palladium were settled. That meant around $5.5 million for the budget of the Carmel Redevelopment Commission, which Carmel Mayor Jim Brainard characterized as a huge plus for the city.
But now, members of the Carmel City Council are asking how much was spent in legal fees to obtain these settlements. Tough critics of the CRC on the council claim they feel the city is, “taking a loss.”
Some councilors, along with Clerk-Treasurer Diana Cordray who serves as treasurer of the CRC, asked for the numbers behind these deals and were recently told in a letter that some information couldn’t be released because it was attorney-client privilege.
When asked about that letter, Brainard said that was a mistake and he provided a complete breakdown to Current in Carmel the next day.
There are several lawsuits involving many different companies going back several years, some before The Palladium even opened, but they all generally deal with faulty design. In some cases, the city was suing to get money for repairs and in other cases the city was being sued because the city felt it was wrong to pay the full amount for what it felt was faulty work.
Brainard claims that the city recovered $6,826,560, but that includes $1,463,360 in “claim negotiated savings” which means they settled a lawsuit for less than they were being sued for.
Expenditures were $7,443,717 in total, which includes $4,802,224 in construction costs and $2,641,493 in litigation costs. In the line item marked, “legal,” it listed $1,899,390 in costs.
As a result, Brainard is claiming 92 percent in total recovery in litigation expenses to date.
“This was a tremendous settlement,” he said. “It could have gone to court and the court could have said zero and we spent two million on legal fees already. They could have said fifty percent. Ninety two cents on the dollar is absolutely off the charts in terms of complicated litigation. We had to have expert witnesses to testify. There were thousands of pages of complicated factual questions. Normally you don’t get attorney fees in a contract case. We think this was huge.”
City Councilor Rick Sharp, who is running against Brainard for mayor, said he questions why “claim negotiated savings” was included in the recovery total. He suspects that it is, “simply an effort to pad and make the decision to pursue the litigation as having a better pay off than it actually did.”
City Councilor Eric Seidensticker was very upset at the initial response and any time that taxpayer money is spent it should be explained in full and in public.
“I think they were trying to claim something was attorney-client privilege that they knew damn well was public money,” he said.
Brainard said the attorney considered it work product, but that doesn’t mean the city couldn’t release it.
“I would consider this public information and it should be released,” he said.
City Councilor Luci Snyder, who was openly critical of certain members of the CRC and past leader Les Olds, said she didn’t see it as a lack of transparency.
“I understand that sometimes it takes time to release things,” she said. “I generally feel that the current relationship with the CRC has been pretty good.”