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Developer Misled State: Attorney General

DETROIT-The transfer of 35 acres of vacant land by developer Joe Nederlander to the school district is called fraudulent by assistant attorney general Matthew Rick. Nederlander's attorney claims the site was to be sold "as is.

By Robert Carr | Updated on June 12, 2001

DETROIT-The state attorney general’s office has halted the completion of a purchase agreement of 35 acres to developer Joe Nederlander, claiming the new owner defrauded the government in plans for Detroit land.

“Your client indicated that it intended to build hotels on the property, not to sell it to someone else, who in turn sold it to the Detroit Public Schools for more money than what the state would have sold it to them if it knew the school district was interested,” says assistant attorney general Matthew Rick in a letter to Nederlander’s attorney, Leonard Hyman. “In fact, your client indicated during negotiations that the property was not worth the $6.1 million ultimately agreed upon by the parties.”

Nederlander was to purchase the land for $6.1 million as part of his lease of the state fairgrounds at Woodward Avenue and Eight Mile Road. He said he sold it to a real estate investment trust, headed by a former business partner, for $10.5 million after local residents and four cities, including Detroit, Ferndale, Pleasant Ridge and Huntington Woods, filed a lawsuit to prevent the construction of a Grand Prix racetrack at thefairgrounds. The suit is still in the discovery process.

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