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Duquesne's Lawsuit Against City Redevelopment Authority, Non-Profit Moves Forward

By Staff Reports
The Tube City Almanac
July 31, 2018
Posted in: Duquesne News

By Cami DiBattista and Jason Togyer

The city of Duquesne's lawsuit against its redevelopment authority and a non-profit development corporation is moving forward.

Duquesne officials filed suit in March against the Redevelopment Authority of the City of Duquesne and the Duquesne Business Advisory Corp., seeking the return of nearly $1.4 million from a $1.5 million revolving loan fund.

Mayor Nickole Nesby argues that the money was improperly transferred from the authority --- a governmental body created by the city --- to the business advisory corporation, which is independent.

The city has asked Allegheny County Judge Arnold Klein to grant a preliminary injunction ordering the DBAC to return the money to the redevelopment authority. A hearing is slated for 1:30 p.m. Thursday in Pittsburgh.

Nesby, who took office Jan. 2 as both the first African-American mayor and first female mayor in the city's history, argues that the money was transferred by the outgoing administration of former Mayor Phil Krivacek to deprive his successor of the money needed to do redevelopment projects in the city.

“For now, we are waiting for our day in court to try to make this right,” Nesby says.

No one from the authority or the DBAC would speak publicly to a writer for Tube City Almanac about Nesby's claims.

But in court filings, both the authority and the DBAC dispute the city's arguments.

Through their attorneys, Patricia McGrail and Jeffrey Ries, the authority and the DBAC have argued that the funds were properly transferred and that Nesby and the city of Duquesne lack the legal standing to bring the lawsuit in the first place.

McGrail is the city's former solicitor. She was replaced by John Rushford of Cafardi, Ferguson, Wyrick, Weis and Stotler after Nesby took office.

In May, Klein rejected a motion by the authority and the DBAC to throw out the lawsuit on procedural grounds.

The redevelopment authority was created in 1995 under the state's Urban Redevelopment Law. According to its website, it promotes redevelopment in Duquesne by "acquiring blighted properties to hold or dispose of so that they may become available for redevelopment."

The authority's board is chaired by former mayor Krivacek, according to its website.

The Duquesne Business Advisory Corp. --- whose website is part of the redevelopment authorty's website --- was created in 1980. According to court filings, its board members when the money was transferred included former Duquesne Mayor Mel Achtzehn and Frank Piccolino, who served as city manager under Krivacek.

The two organizations have worked together over the years on a number of redevelopment projects. In addition, the authority has administered a revolving loan fund, which provides low-interest loans to businesses to acquire or improve their properties.

According to Nesby, on Dec. 31 --- just two days before she was sworn into office --- the authority voted to transfer 90 percent of its assets, including 100 percent of the loan fund, to the corporation.

In its lawsuit, the city claims that the transfer, in effect, dissolved the redevelopment authority.

“According to the established articles of incorporation, mission statement and by-laws established by the Redevelopment Authority of the City of Duquesne, the funds are to be used for job growth, community and economic development,” Nesby says.

She says there was "no clear reason" for the authority to turn over its money, records and related documents to the Duquesne Business Advisory Corp.

In its lawsuit, the city contends that the non-profit DBAC lacks proper city oversight, and argues that under the Urban Redevelopment Law, only a public authority can manage the revolving loan fund.

Nesby says her administration is further being denied oversight of the redevelopment authority itself.

“Since its inception, every mayor in the city has held the position of chairman,” Nesby said. “As the mayor, I am speaking for the people who elected me. I speak for them.”

But Nesby says she was told by McGrail that the Duquesne redevelopment authority was "not part of city government" and that Nesby had no say in its operations.

Nesby says the authority and the DBAC acted to undermine her and prevent her from properly doing her job.

In court filings, McGrail and Ries argue that the redevelopment authority is a creation of state law, "not the municipality that created it," and that it has "great latitude to accomplish its goals."

They say that the revolving loan fund was originally administered by the DBAC and was not transferred to the authority until 2013.

Further, McGrail and Ries argue, the redevelopment authority continues to own property and maintains more than $160,000 in a bank account, so it hasn't been dissolved in any way.

In court filings, they called Nesby's allegations that she is being undermined because of her race and gender "immaterial, inappropriate, scandalous and impertinent" and asked Klein to strike them from the official record.

In June, the authority argued that the city's lawsuit is "without a basis in the law and is therefore an illegal claim," and asked Klein to award court costs and legal fees to the authority.

Nesby is satisfied that if the case goes to trial, the city will prevail. “I am confident that the funds will be returned and utilized for the revitalization of our community,” she says.

Cami DiBattista is a freelance writer. Jason Togyer is editor of Tube City Almanac.

Originally published July 31, 2018.

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