Lawsuit pushing intermodal port project off track?

2012-11-18T00:00:00Z 2012-11-19T00:52:05Z Lawsuit pushing intermodal port project off track?Keith Benman and Bowdeya Tweh Times Staff Writers nwitimes.com
November 18, 2012 12:00 am  • 

A company led by an adviser to Gary Mayor Karen Freeman-Wilson is the target of a civil lawsuit in connection with its effort to spearhead a "city-centered" economic development project.

Adrian Muhammad, who has had a close relationship with the current and prior city administrations, organized a group of consultants to work at developing an intermodal freight port in the city.

His company, Midwest International Investment Center LLC of Chicago and Gary, channeled $102,287 into a feasibility study and market analysis to establish the operation on land U.S. Steel owns just east of Buffington Harbor.

But international consulting firm Landrum & Brown, which is performing the study, filed a lawsuit in August in U.S. District Court in Chicago alleging Muhammad's company skipped payment on six bills last year. The firm is seeking payment of $267,110 plus interest and costs.

Muhammad, of Merrillville, declined to talk directly about the lawsuit but said he remains interested in helping Gary capitalize on its infrastructure assets and potential to be a transportation hub.

The highway, rail, water and air freight port planned by Muhammad is a key component of a "global" economic development initiative of the Freeman-Wilson administration. The administration plans to seek state aid to pay for the initiative.

 

Pitching intermodal

Big questions have been swirling around City Hall and in Gary circles in recent months since Muhammad's visibility in connection with the intermodal port project has declined. He said other business interests required his attention and that he has traveled significantly recently, including a trip to China earlier this month.

He said any innuendo he would flee the area as a result of a civil lawsuit "makes little to no sense." Prior to leaving for China, Muhammad said he visited City Hall on several occasions and even attended a birthday party for the mayor at Gary's Genesis Convention Center.

Hoeppner Wagner & Evans LLP attorney Michael Tolbert, who is representing Muhammad's company, said he plans to file an answer to the complaint Landrum & Brown filed. But he also declined comment when contacted by the Times.

When interviewed in early November, Freeman-Wilson said the city still considers an intermodal freight port to be an important part of a global economic development initiative for Gary. However, she could not say if it will be included when the city seeks support from the Indiana General Assembly next year.

An intermodal port is where freight is exchanged among various modes of transport, such as trucks, rail cars, ships and airplanes.

Freeman-Wilson said Muhammad undertook the venture as a private citizen and that it was not a city effort. Although she wished Muhammad success in his effort, the mayor said his problems will not hold up her global economic development initiative, which includes an intermodal port, a land-based casino and a teaching hospital in the city.

 Relationship with Gary

In a March 8 letter to Landrum & Brown, Midwest International Investment Center lawyer Dwain Kyles said the change in political leadership in Gary had removed many of the obstacles to the intermodal freight project.

"To that end, the election of Karen Freeman-Wilson as the new mayor of Gary, her publicly stated commitment to transportation generally, and this intermodal development strategy specifically, strongly validates both our approach and the acceptance of our development as a city-centered initiative," the letter read in part.

On being read that part of the letter, Freeman-Wilson acknowledged Muhammad's project could be valuable to the city and even an important part of its economic development efforts.

"This is something they were taking on as private developers where the city was absolutely interested in a partnership when the time came," she said.

At the same time, she sought to draw distinctions between Muhammad's work and the city project, saying he was not a city employee and has not been paid any consulting fees by her administration.

Muhammad played a key role in Freeman-Wilson's 2011 campaign for mayor. He earned $7,479.31 from Freeman-Wilson's campaign, which was more than any other single consultant or worker for her campaign, according to documents on file at the Lake County Board of Elections.

Muhammad's Midwest International Investment Center uses the Gary-Hammond-East Chicago Empowerment Zone business incubator at 1065 Broadway as its mailing address. Executive Director Scott Upshaw said Nov. 8 he hadn't seen Muhammad in more than a month and understood he was out of the country on business. The company also shares an office in Chicago's Loop with a law firm that specializes in channeling foreign investments to domestic projects.

The intermodal plan

Muhammad was a close adviser to former Gary Mayor Rudy Clay, helping usher Chinese investors around Gary's transportation assets, including the Gary/Chicago International Airport and the sites of proposed intermodal and manufacturing centers that would surround the airport.

Freeman-Wilson said she was first briefed by Muhammad and others on their intermodal port plan at a meeting at the offices of the Northwest Indiana Regional Development Authority in summer 2011, after she had won the Democratic primary for mayor.

RDA Executive Director Bill Hanna said Muhammad and others had briefed his organization on the project both during the Clay administration and the start of Freeman-Wilson's. Airport officials also were briefed.

The effort by Muhammad's Midwest International Investor Center did not conflict with the broader land use study the RDA is doing around the airport, Hanna said.

Legal fight with company

On Jan. 11, 2011, Ohio-based Landrum & Brown and Midwest International Investment Center signed a letter of intent for Muhammad's company to receive a market assessment evaluating the feasibility of developing an intermodal facility at the Gary site. One reason the firm was selected was because it knew the area as a result of its work in creating a strategic business plan for the Gary airport, and it was in the process of completing an airport marketing plan.

However, attorney Kyles said the Landrum & Brown lawsuit against Midwest International Investment Center followed a "serious disconnect with regard to the direction of the project." As the project went on, he said it was like contracting with a painter to paint a house one color, but ending up with a different one.

Kyles was an owner of the now-shuttered E2 nightclub in Chicago that closed after a February 2003 stampede resulted in the deaths of 21 people.

When asked about the lawsuit over the study, Landrum & Brown's Daniel Muscatello said he was unable to answer questions because the suit is in the courts, but he defended the work he headed up.

"When we do any kind of marketing and feasibility study, we are extremely thorough, we are extremely careful and we treat the client's money like it is our own," Muscatello said. "We would never do anything that is not in the best interest of our clients."

Kyles said the Gary intermodal project was "coming along pretty well" as he and Muhammad worked to gather interest and backers for the project, but efforts slowed down as Muhammad became involved with Freeman-Wilson's 2011 election campaign. Muhammad said he worked closely with the mayor and her transition team but stopped working closely with City Hall this summer to provide more attention to his business interests.

Kyles said the project is in a holding pattern, but not because of the lawsuit Landrum & Brown filed.

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