Civil lawsuit opens with testimony by opponents of Northampton Business Improvement District

Last modified: Friday, October 10, 2014
NORTHAMPTON — Nearly two months after the Northampton Business Improvement District re-upped through 2019, a long-anticipated civil lawsuit in Hampshire Superior Court began Monday that could have major implications for the BID’s immediate future.

The lawsuit was filed more than five years ago by Alan Scheinman and several property entities owned by Eric Suher. The suit alleges that the city used a flawed process that did not follow state law when it created the BID in late 2008. The city countered that the plaintiffs had an obligation to exhaust other solutions while the BID was being created and did not do so, rendering the lawsuit invalid.

Both sides gave opening arguments Monday in the trial, which is expected to last through this week. Judge John Agostini said he expects to issue a ruling in October, adding that he has already started drafting a decision on the case.

The trial is expected to feature testimony from many of the city’s well-known commercial property owners, municipal leaders and others. Among those on an exhaustive witness list include former Mayor Clare Higgins and several key city leaders including Assessor Joan Sarafin, City Clerk Wendy Mazza and Planning Director Wayne Feiden. Business leaders on the list include Dan Yacuzzo, who served as the BID’s first executive director, and BID supporters Joseph Blumenthal and Richard Madowitz, among others. Suzanne Beck, executive director of the Greater Northampton Chamber of Commerce, may also testify.

In her opening arguments, lawyer Alexandra Glover, representing Scheinman and Suher, argued that supporters of the BID were so determined to see it created they cut several corners governing how BIDs can be created according to state law.

“They wanted the district so badly that they violated virtually every provision in the checklist to have a BID,” Glover said.

Among those alleged violations she said she would prove during the course of this week’s testimony is that BID petitioners failed to gather enough signatures to represent 51 percent of the assessed value within the district’s boundaries and 61 percent of the property owners. She also contends that more than 200 of the 305 signatures gathered are invalid because people signed before the petition was created or before the description of the district’s boundaries were set. Another flaw, she maintains, is that notices for public hearings were improperly posted.

Harry L. Miles, the lawyer representing BID, argued that Scheinman and Suher had an obligation to air these alleged faults about the BID’s creation with the City Council and other city officials while the BID was being considered in 2008 and early 2009 — not after the fact. Miles said they did not act in the appropriate time to stop the process, nor did they attempt alternatives to a lawsuit to get what they wanted.

Among those would have been taking action to dissolve the BID, as is allowed under state law. They also have an obligation to at least attempt to dissolve the BID on a second renewal vote, if indeed a vast majority of downtown property owners do not want the organization, according to Miles.

“The plaintiffs knew about the BID, knew about the effects, knew about the problems well before the City Council approved the BID,” said Miles. He added later that BID opponents could have taken action along the way to correct the mistakes before going to court and they did not.

Miles also argued that the council, as the city’s legislative body, ruled that “all of those defects” were not enough to invalidate the BID petition five years ago and that decision should stand unless the plaintiffs could prove the process was corrupt.

“Evidence about what preceded the City Council vote is essentially irrelevant,” Miles said.

A judge’s task

Agostini must determine whether the plaintiffs’ critiques are valid, in which case the BID could be deemed invalid and supporters would have to start the process anew. He could also rule that the city followed the law correctly, in which case the BID will continue as it has for the last five years or until a decision is reached in a separate, federal lawsuit.

Scheinman, Suher and W. Michael Ryan are involved in a federal lawsuit filed in March 2013 against the city and the Northampton Business Improvement District, saying that a new state law that forced them to join the BID and pay its required fees violated their constitutional rights. That case has not come to trial yet.

Meantime, Scheinman took the stand as the first witness for the civil trial in state court for the majority of its first day. He said he sees no benefits from the BID. He described the organization as “another level of bureaucracy” with many drawbacks. He said downtown has gone through many up-and-down cycles over the years, yet the value of properties he has owned have increased over time.

“From the very beginning, I saw no real need for a BID,” Scheinman said.

On several occasions, Agostini questioned the relevancy of Scheinman’s testimony regarding whether the city followed the state statute in creating the BID. Arguments about whether it was a good decision were not germane, he said.

Scheinman also testified that many of the signatures on the BID petition actually predated the creation of the district boundaries. And he maintains many of those signatures on the petition are questionable while others are illegible. He also alleges that the city did not properly compare the names on the petition to a list of property owners within the district.

Under cross-examination from Miles and Nancy Pelletier, who represents the city, Scheinman said that he did not make an effort to determine the authenticity of the signatures.

“I called no one to determine whether or not they have signed,” Scheinman said.

Pelletier pointed out the plaintiffs’ very public efforts to oppose the BID, both in the form of mailings and at city council hearings.

“Despite that, not a single person came forward to support your theory that their signature was not on the document?” she asked. Other than two people, Scheinman agreed.

Suher, who owns 19 properties in the BID, also took the stand Monday afternoon. Like Scheinman, he argued that Northampton did not need a BID and has done a good job weathering the downs and ups of the business cycle.

“I’ve never thought of Northampton as a city that was in need of a BID,” Suher said.

He also testified that his businesses spend time, effort and money marketing their entertainment and cultural facilities, which by default markets downtown. He shared concerns with having a board dictate advertising policy for downtown that might be contrary to what his group might do.

“That the minority would make the decisions for the majority of property owners was a very real concern,” Suher said.

The trial is scheduled for every day this week.

Chad Cain can be reached at ccain@gazettenet.com.