Central Michigan University officials filed a formal answer last week with the Isabella County Circuit Court in response to a lawsuit against the CMU Board of Trustees by Labelle Limited Partnership.

LaBelle filed a lawsuit Nov. 4, stating the Board intentionally violated numerous contract agreements when it gave University President Michael Rao full authority at its July 17 meeting to sign a lease with Lodgco Management LLC.

On Nov. 24, the university filed its response to the lawsuit. Rao said in an interview that day with Central Michigan Life that the developer’s claims are unwarranted.

“In fact, what we said, and what resulted in the lawsuit, is that we did not agree with those concerns,” Rao said. “We certainly listened to them. We took them very seriously. We really tried as a public university to give those points emotional credibility.”

Lodgco is the developer for a proposed Holiday Inn project in the Center for Applied Research and Technology, where LaBelle currently leases land. LaBelle claims in the lawsuit that covenants from the 1980s and 2005 with CMU have been breached, giving it the right to pursue legal action.

LaBelle is claiming the four-story height restriction on land in the CART, which was amended to six stories without LaBelle’s approval, was a breach of contract. The developer views itself as an “owner” in the contract, and therefore a part of a 100 percent owner consent stipulation in the

restricted covenant.

The 2005 covenant requires that the university gains 100 percent approval from all owners of the building site in the CART before making any amendments on restrictions.

Eileen Jennings, CMU general counsel, holds firmly to a belief that LaBelle has no ownership of land in the CART, where Bennigan’s and Comfort Inn & Suites Hotels and Conference Center, both at 2424 S. Mission St., and Fairfield Inn, 2525 S. University Park Drive, now stand.

“The university has never thought the long-term tenants were owners,” Jennings said. “They (LaBelle) believe that the definition given in the restrictive covenant includes them.”

The 1985 covenant holds that any building development in University Park must be “located, designed and intended” to support and compliment principle uses.

LaBelle claims the proposed Holiday Inn project is designated for an area outside of the service center, which they do not believe is allowed under their agreements.

The developer is suing CMU for an injunction and a halt in construction plans for the project

LaBelle does not hope to obtain any financial compensation beyond legal fees and damages. Lawyers for LaBelle declined to comment on the lawsuit.

An outside perspective

In the meantime, CMU has sought legal assistance both from its own general counsel and from an external source, Rao said.

He said the lawsuit will take its legal course, but dismissal is a strong possibility.

“I think that the possibility that this would be dismissed or that something would be rectified could potentially happen relatively soon,” he said.

Rao has not yet signed the lease with Lodgco.

Previously, university officials said they expected to have a signed lease around Thanksgiving. They have since said the project will not move forward until court matters are settled.

“There are questions we want answers to, and it would not be prudent to enter into any kind of a lease agreement with Lodgco without having this case heard in a court of law,” said Director of Media Relations Steve Smith.

Jennings said the university has been doing everything it can to get the lease ready in the meantime.

“We want to be in a position where we can sign within days of resolving the issue,” she said.

The next step in proceedings will be a scheduled conference with the judge and both parties. They will set deadlines for proceedings in the lawsuit, Jennings said.

Jennings said Lodgco is aware of the lawsuit and that the university wants to move forward with construction.

Rao agreed, saying the developer had hopes the issues at hand would not warrant a slowdown in the project’s timeline.

“I think that our system is such that if someone really believes they have a concern, they’ll get their time. They got their time with us; now they’re going to get their time in a civil fashion,” he said.

Jennings said the conflict will serve as a learning opportunity for the university, whatever the outcome.

“(CMU) will benefit from having clear answers (to questions about the CART land) so that when someone else comes around and wants to lease land in the CART, we will know what we’re bound by,” she said.

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E-mail the author: Heidi Fenton