Fresno

Fresno developer sues city, lawmaker claiming discrimination, corruption

A Fresno developer is seeking damages against the City of Fresno and Fresno City Councilman Miguel Arias for discrimination and alleged interference in a project to develop the northern end of Fulton Street in downtown Fresno.

Friday, shortly after a $12.45 million government claim for damages was rejected by city officials, Cliff Tutelian and his firm, Tutelian & Company, Inc., filed a lawsuit against the City of Fresno and Arias for damages for the same amount

Tutelian’s government claim, filed in July, stems from the City Council’s February decision to not renew the Exclusive Negotiating Agreement (ENA) it had with Tutelian for the development.

The ENA, signed in 2018, sought to redevelop much of the block along Fulton Street between Tuolumne and Merced streets.

It would have relocated the CVS Pharmacy on the site to the corner of Tuolumne and Van Ness avenues, with a 160 multi-family housing project atop the new building and a parking garage with more than 500 spaces.

The first floor of the parking garage would also have included space for retail shops. 

Per the suit, the city “had an express obligation to negotiate in good faith, but chose instead to violate the ENA to the detriment of [Tutelian] and the entire Fresno downtown corridor, demonstrating disparate treatment of [Tutelian] versus other similarly situated projects.” 

The suit claims that the City of Fresno and Arias engaged in alleged discrimination and disparate treatment

Attached to Tutelian’s claim is a draft version of a yet-to-be filed lawsuit against the City of Fresno and Arias alleging discrimination against him and disparate treatment compared to Frazier, fiancée of Councilwoman Esmeralda Soria, and Noyan.

“Plaintiff is informed and believes, and upon such information and belief herein alleges that, in as much as Defendants, for the similarly situated South Stadium Project, did consider and regularly grant at least nine extensions over five years, without the same process of changing conditions and creating delays experienced by Plaintiff herein, Defendants disparate treatment of Plaintiff violates and deprives Plaintiff of his civil right to due process and equal protection…” under state and Federal law, the draft suit reads.

Last November, the council agreed to extend the ENA by 60 days after Tutelian’s negotiations with CVS took a hit during the pandemic, leading to a February decision by the council that ultimately axed the project. 

The council had been set to approve another extension in February, but Arias removed it from the agenda with the support of Council members Nelson Esparza, Tyler Maxwell and Soria. 

Shortly after agreeing to the ENA, Tutelian filed a claim against the city in regards to a lease agreement he had with the city since 2013 over a parking lot. 

With the ENA originally set to expire in 2019, Tutelian agreed to drop the first claim with the city council extending the ENA to March 2020, which was then extended to the end of the year. 

In the suit along with the July claim, Tutelian alleged that during a meeting between Arias and the developer’s representatives, Arias “demanded that [Tutelian] ‘contribute’ $12,000 to his campaign, expressly stating that Mr. Tutelian is ‘cheap,’ and needs to learn how to contribute like others if he expects help.” 

Tutelian also alleged that the city did not meet the terms of the ENA by failing to negotiate in good faith through the actions and at the direction of Arias.

Tutelian in a statement said that “the suit speaks for itself. I remain hopeful that the process will lead us to an equitable conclusion.”

Arias fires back, claiming “extortion”

In a statement, Arias claimed that he was approached by representatives of Tutelian & Company seeking resolution by offering to drop the government claim in exchange for sale of the parking lot at the center of the 2013 agreement.

“I expected this baseless suit would be filed following the city’s rejection of Mr. Tutelian’s outrageous claims,” Arias said in a statement.

“In recent weeks, I have been approached by representatives of Mr. Tutelian who have sought to extort me by offering to have the claim withdrawn in exchange for the City’s sale of Parking Lot 2 to him without a public bid process.

No amount of baseless attacks or threats will convince me to give anyone the right to develop someone else’s private property without the owners consent or sell public assets without a public and transparent bidding process as required by law and city policy.

I am confident the legal process will confirm the city’s decision was appropriate.”

Read the suit

Alex Tavlian contributed to this report.

Les Hubbard is a contributing reporter for The San Joaquin Valley Sun.