WHISTLEBLOWER: Traverse City looks to settle lawsuit

TRAVERSE CITY — Former Traverse City assessor Polly Cairns and the city reached a settlement agreement on Cairns’ whistleblower lawsuit.

Commissioners on Monday unanimously approved settling the lawsuit for $340,000 after meeting in closed session to discuss the agreement with Peter Worden, outside counsel for the city.

The Michigan Municipal League, the city’s liability insurer, still has to approve the agreement and is set to decide on June 19, Worden said. He declined to say more, since the suit is still active until the insurer OKs the agreement.

Blake Ringsmuth, Cairns’ attorney, said he expects they will, since an MML representative attended mediation talks to end the lawsuit.

“It’s a monetary payment, and we just hope that this resolution sends a clear message that public servants who do the right thing are not disposable,” he said. “There’s a cost to silencing truth-tellers, and everybody has a right to expect better – and certainly the citizens of Traverse City.”

Cairns filed suit in October 2024, accusing city administrators of retaliating against her for objecting to a payment-in-lieu-of-taxes agreement she believed to be illegal.

The suit accused city officials of pressuring Cairns to sign off on the PILOT despite Cairns repeatedly pointing out the agreement overstated by more than $600,000 how much reduced rents Breakwater Apartments collected.

John Di Giacomo is an attorney for Innovo Development Group, which owns the apartment building, and previously denied that the PILOT agreement is illegal. He asked 13th Circuit Court Judge Kevin Elsenheimer to strike statements to that effect, calling them “scurrilous,” “false and defamatory.”

While Di Giacomo pointed out both the city commission and Michigan State Housing Development Authority approved the valuation in question, Ringsmuth told Elsenheimer his findings among thousands of documents and hours of depositions showed the PILOT to be illegal.

Chief among those findings was an audit showing shelter rents collected at Breakwater Apartments to be substantially less than on the memorandum Cairns alleged she was pressured to sign.

Elsenheimer ultimately declined to strike the wording in question.

Cairns in her complaint asked the judge to declare the PILOT agreement improper and order the city to be repaid. Ringsmuth said the settlement doesn’t affect the PILOT, and he’s hoping the city takes action.

“What we uncovered here matters, not just for Polly but for everyone who wants transparent government,” he said. “And I hope this suit and the reality that we exposed pushes them to act on what happened here, because looking the other way is no longer an option.”

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