Eric Lacy

Lansing State Journal

LANSING -- A former state attorney general doubled down Thursday in a federal civil lawsuit which alleges Mayor Virg Bernero and other city officials are tied to a local businessman's "racketeering enterprise" that aimed to get a multi-million-dollar, mixed-use project built.

Mike Cox, now of the Livonia-based Mike Cox Law Firm, Thursday filed an amended complaint after he was blasted a month ago by U.S. District Court Janet T. Neff. Neff said in a Feb. 9 pre-motion conference reading the first complaint -- all 62 pages -- created "one of the more painful afternoons of my life as a lawyer."

(Read the Cox's amended complaint, Neff's transcript and the initial complaint at the bottom of this story)

Neff had chastised Cox for the original filing, saying at one point: “You might have a valid cause of action here. I just couldn’t find it because there is so much junk in here.” She had given Cox a deadline of Thursday to amend the complaint, telling him to "do it right," and suggested cases to review for guidance on making racketeering allegations in a civil case.

Cox represents Leo Jerome, Christopher Jerome and their Story Companies. On Friday, Cox emailed the 47-page amended complaint with exhibits to the Lansing State Journal. Both complaints list 13 defendants including Bernero, businessman Joel Ferguson and Bob Trezise, president and CEO of the Lansing Economic Area Partnership.

The new complaint is more focused and detailed in its allegations, claiming that Ferguson used meetings, letters and email to progressively demand larger shares of the Jeromes' proposed development. Those allegations claim Ferguson eventually took the project away from them.

Cox's amended complaint states Ferguson is part of a "pay-to-play system" for municipal and state contract approvals, political favors and access to public tax dollars for highly profitable land development projects in the Lansing region. Cox has declined to comment on the matter. Ferguson denies the allegations.

When contacted Friday, Ferguson described Cox's two complaints as "60-some pages of nothing that turned into 40-some pages of nothing."

"There’s no backup for anything he’s saying," Ferguson said of Cox's amended complaint. "Any alleged charges, there’s no backup. A whole accumulation of nothing is supposed to be something.”

Asked Thursday about Cox's initial complaint as scrutinized by Neff, Bernero wrote in a text message the lawsuit has no merit. "Apparently anybody can say anything they want in a lawsuit, just like on a website," Bernero wrote. "Doesn't make it true."

The civil lawsuit was filed by Cox last fall in the U.S. District Court for the Western District of Michigan in Kalamazoo. Also named as defendants are Clark Construction and Charles Clark, Ferguson’s partner Frank Kass and their joint development company on a proposed project called Red Cedar Renaissance, and, Ferguson/Continental LLC.

The Jeromes claim Ferguson, a member of Michigan State University's Board of Trustees, conspired with Bernero, LEAP, Trezise and other local economic development officials to steal the Red Cedar project proposed at the former Red Cedar Golf Course. "Ferguson used a carrot-and-stick tactic to steal the project from the plaintiffs," Cox's amended complaint states.

Also mentioned in the lawsuit is an allegation that Bernero pushed the Jeromes to give into Ferguson's demands. Trezise, according to the amended complaint, allegedly told Christopher Jerome in 2013 that Ferguson had threatened to derail Bernero's reelection campaign by accusing the mayor of being racist if he didn't meet Ferguson's demands over the Jeromes' proposed project, then called Capital Gateway. The complaint adds that Trezise allegedly told Jerome the racism claim would "cripple" Bernero politically -- even if it did not remove him from office.

Trezise declined Friday to comment about the lawsuit or any allegations. Last week, Bernero made it official that he won't seek a fourth term.

The lawsuit claims Bernero told Christoper Jerome in 2013 that Ferguson is "our version of Kwame Kilpatrick," referring to the imprisoned former Detroit mayor. The amended complaint also claims that Ferguson gave tickets to sporting events to Bernero and "various Lansing government officials" such as Lansing City Council Member "Dennis" Quinney and former City Attorney Janene McIntyre. The complaint appeared to refer to Derrick Quinney, a former council member who is now Ingham County's register of deeds.

On Friday, Ferguson said all those allegations are false. "There’s no evidence of what he’s talking about," Ferguson said of Cox's ticket purchase allegations. "And what if I did?"

A Michigan State University spokesperson confirmed Thursday that Bernero purchased two tickets to see the Spartan football team play in the 2014 Rose Bowl. The amended complaint cites 1st Ward Council Member Jody Washington as saying Ferguson paid for Bernero's Rose Bowl trip.

Washington told the State Journal on Friday she did hear Ferguson tell her that he paid for Bernero's trip. "But Ferguson denies everything he tells me, which is disturbing," Washington said.

McIntyre left her job in last year with an unexplained $160,000 payout. The Bernero administration described it as a "separation agreement and general release." Officials, including Bernero, did not explain why McIntyre received the payout, claiming it was attorney-client privileged information.

In 2012, the Jeromes had proposed Capital Gateway, a mixed use project. Plans called for it to include the former Story Olds and Sawyers Pontiac dealerships along Michigan Avenue and the former golf course site. In the lawsuit, the Jeromes claim they were forced to consider Ferguson and Charles Clark, of Clark Construction Services, as development partners who later demanded Bernero give Ferguson's team control of the project and cut the Jeromes out completely.

Pat Reid, Ferguson's attorney, said Friday that Cox's amended complaint doesn't meet the judge's request because it "deliberately misrepresents the facts."

"They never had it to steal," Reid said of the Jeromes' allegations the Red Cedar project was initially theirs. "They never were awarded it.”

Ferguson has repeatedly denied that the Jeromes and Clark were ever partners for the Red Cedar project.

The end of the Jeromes' involvement was announced in December 2013, when the Capital Gateway name was dropped and Ferguson partnered with Columbus, Ohio, developer Frank Kass to pursue the Red Cedar Renaissance project at the same site. That Red Cedar project calls for two hotels, 129 townhomes, five restaurants, a medical office building and student housing that would accommodate 1,200 people.

The city approved a development agreement with Ferguson and Kass in late 2014 and the City Council approved the agreement in February 2015. A sale of the former golf course site has yet to be completed. Ferguson said Thursday the development agreement with the city has been extended another year.

Christoper Stralkowski, Ferguson Development's executive project manager, said Ferguson's company is working exclusively with the city on potential financing for the project.

"We're working, fine tuning, sharpening our pencils, and trying to get our numbers right for everyone," Stralkowski said Thursday.

Eric Lacy is a reporter for the Lansing State Journal. Contact him at 517-377-1206 or elacy@lsj.com. Follow him on Twitter @EricLacy.