Losing bidder files protest, alleges favoritism in deal to move Metro government workers
LOUISVILLE, Ky. (WDRB) – A group that unsuccessfully bid for new Metro government offices for workers displaced by mold has filed a protest over the city's selection of developer Bill Weyland's company.
Mayor Greg Fischer announced Feb. 4 that Metro government had signed a lease with Weyland's City Properties Group to house nearly 300 employees that will be moved mostly from buildings on Barret Avenue.
But the owners of the old Bank of Louisville building on Broadway objected to that decision. In a March 19 letter of protest, building officials claim the city “had no right” to issue a second request for proposals in August after negotiations they were involved in hit a stalemate.
Instead, they say, the contract should have been awarded to them as the lowest bidder under Kentucky procurement law.
“Without a compelling reason, such as a budget constraint, Metro was required to award (the proposal) to the lowest bid price,” wrote Alan S. Rubin, an attorney for the Sawyers and Lerner group, which controls the former Bank of Louisville building at Broadway and Fifth Street.
City Properties Group's first attempt at a bid failed last spring and wasn't considered after being deemed “non-responsive,” public bidding documents show. However, the company offered a second proposal when the city started the bidding process over last summer.
The Weyland-owned Edison Center, a former warehouse at Seventh and Oak streets, would be one of two sites to accept city employees under the deal announced last month. The Property Valuation Administrator's offices would move to Weyland's Glassworks building at Ninth and Main streets.
City Properties won the competitive bid, the city's press release said.
Among other things, the Sawyers and Lerner group is asking Metro government to void the contract with City Properties and award it instead to the lowest bidder.
Metro government has not yet ruled on the protest. The Jefferson County Attorney's Office is working on a response that should be finished later this week or early next week, spokeswoman Jessie Halladay said.
Chris Poynter, spokesman for Mayor Greg Fischer, declined to comment in detail but noted that there were “multiple bidders” on the project besides the Sawyers and Lerner group.
Weyland, a prominent developer whose past projects include renovations of the Henry Clay and Glassworks buildings, declined to comment because he had not read the letter of protest.
The protest letter presents one side of events that occurred. In it, the Sawyers and Lerner group claims the second request for proposals should not have been issued and that City Properties should be disqualified for having an “incomplete” proposal.
Sawyers and Lerner allege that the evaluation process, which weighed price, location, moving schedule and technical aspects, was “erroneous, arbitrary and capricious.” For example, the group argues that it has a “far superior” location – one of the criteria considered -- near other offices such as the Heyburn Building and Brown Hotel.
By contrast, the group says the Edison Center “is located off a minor highway with only limited access, and is surrounded by low income housing and industrial businesses. The only services within walking distance are a 24-hour Beer, Liquor and convenience store.”
The Edison Center, site of the Southern Exposition in the late 19th century, is a former LG&E complex that has been vacant for more than a decade, according to Metro government. It would house a number of city agencies, including the Air Pollution Control District, Louisville Metro Police Department's narcotics division and Jefferson County Coroner's Office.
The PVA's office would move to the Glassworks building. In its protest, the Sawyers and Lerner group alleges that City Properties met with a top PVA official and helped design space for the offices. The group said in the letter it is “completely astounded” that Metro government allowed City Properties to have private meetings with an agency being moved.
City Properties “gained an unfair advantage of having space planning meetings with that agency, when this was not publicly offered to other bidders,” the protest alleges.
Among its other complaints, the Sawyers and Lerner group says it offered to lease space at $9.36 per square foot at the old Bank of Louisville building, compared with City Properties' price of $12.50 per square foot.
The group also raised the possibility of “favoritism” toward City Properties, noting that a Weyland-controlled company had received a $988,000 loan from Metro government to help clean up the Edison Center.
After ultimately choosing City Properties, Metro government has a “secure path” for repaying the loan and an incentive to bypass the requirements of state bidding laws, the letter alleges.
The loan was approved in 2013 by the Metropolitan Business Development Corp., or METCO, which oversees small business loans. The amount will be reimbursed based on invoices submitted by Weyland, said Kurt Hummel, economic development manager in the city's economic development department.
Asked whether the loan influenced the city's decision to select City Properties, Fischer spokesman Poynter said, “We give out METCO loans every month to many businesses, large and small – so that's a bit far-fetched.”
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