D.C. Official May Have to Face Developer's Claim
(CN) - A federal judge dismissed a developer's breach of contract claims against the D.C. Transit Authority but did not address allegations that D.C. Councilman Jim Graham interfered with their negotiations on behalf of a campaign contributor.
In 2008, the Washington Metropolitan Area Transit Authority (WMATA) entered into an agreement Banneker Ventures, a developer, to negotiate the development of three lots next to the Shaw-Howard/Florida Avenue Metrorail Station.
Banneker submitted a $40 million proposal for a multi-use development called The Jazz at Florida Ave, which would include 130 apartments, 20,000 square feet of retail space, and underground parking.
However, despite three time extensions, Banneker's exclusive right to negotiate expired in March 2010 without reaching an agreement with WMATA.
In court, Bannker claimed that D.C. Council member Jim Graham, who was then a voting member of the WMATA board of directors, engaged in "bid suppression and bid rigging," with the aim of selecting his major campaign contributor LaKritz Adler as the developer.
Graham allegedly offered to vote for a D.C. lottery contract that would benefit one of Banneker's then principals, Warren Williams, if the firm would withdraw as the developer for the project, but Williams refused.
The councilman also convinced the WMATA Board to add affordable housing requirements, thereby decreasing the value of the project for Banneker, according to the complaint.
The developer also accused WMATA of conspiring with LaKritz Adler to interfere with Banneker's exclusive negotiation rights.
But U.S. District Judge Rosemary Collyer dismissed the allegations against WMATA on Wednesday.
"Banneker has failed to state a claim for breach of contract or for breach of the duty of good faith and fair dealing. It has not alleged that WMATA breached the term sheet by entering into a negotiation with another developer during Banneker's exclusivity period. It has not alleged that WMATA was bound to a valid contract containing all material terms regarding the conveyance and development of the site," she said.
The judge found WMATA's actions protected by sovereign immunity because choosing a developer for the project required it to weigh the possible social, political, and economic repercussions, the kind of discretionary judgment immunity is intended to protect.
Since the federal court's jurisdiction was based on the presence of the transit agency as a defendant, the judge asked the remaining parties, including Graham, to inform the court of their citizenship to determine if the court will retain jurisdiction for diversity purposes.