The CM Group, a consortium that operates the six city-owned Smart Park garages in Portland
, filed a lawsuit
in Multnomah County Court yesterday seeking to expel one of its members, the African American Chamber of Commerce.
The lawsuit comes as the latest twist in the maneuvering around the contract
to manage the garages, which generate about $10 million in annual revenue. For all intents and purposes, the African American Chamber is Roy Jay, a charismatic and influential downtown player who teamed up with the Schlesinger company's Star Park and other minority chambers of commerce to win the city's SmartPark contract in 2003.
After the City of Portland announced its intention in April to award the Smart Park contract to Nashville-based Central Parking System, Jay in turn announced
he would be forming a partnership with Central. That announcement irked the Schlesingers and its partners in the CM group: the Hispanic Metropolitan and Philippine American chambers of commerce.
According to the lawsuit, members of CM asked Jay to resign from their group since his new partnership with Central constituted a "direct confict of interest."
"Central Parking a direct competitor of CM Group for the Contract and Jay's partnership with Central Parking diminishes the credibility of CM group," the lawsuit states. "Jay's personal financial stake in Central Parking creates an irreconcilable conflict of interest that prevents Jay and the African American Chamber from acting in the best interests of the CM Group."
The lawsuit says Jay declined repeated requests to exit from the CM partnership. "The African American Chamber, through Mr. Jay, vigorously opposes withdrawal, but provides no explanation for its refusal," the lawsuit says, adding, "The African American Chamber has ceased participating in any business activities of CM Group."
Complicating the situation is that following vigorous protests from members of the CM Group and the city's largest parking company, City Center Parking, Mayor Sam Adams canceled
the city's decision to award Central Parking System the contract and ordered a new bidding process.
Updated at 5:35 pm:
Jay was not immediately available for comment.
Jay says the lawsuit is without merit both because the proper venue for addressing contractual disputes is mediation and because his dealings with Central Parking System are as an individual, not as the African American Chamber of Commerce.
"I want to make it clear that the African American Chamber has never had any connection or partnership with Central Parking, contrary to
Mr. Schlesinger and his other partners may think," Jay wrote in an email this afternoon. CM Group wants to expel a partner because they
believe that I may have information which may affect their future bid for the parking garages. Face facts, they came in fourth out of five respondents
and they were the incumbents."
Jay adds that CM Group's stance ignores the contributions the African American Chamber made to getting CM the city contract. "It was the African American Chamber who was the spark plug that finally put the Schlesingers and Star Park in the number one position in getting the public garage contract in 2003," Jay says. "In addition, it was the African American Chamber that voluntarily included the Hispanic and Philippine American Chamber as part of the management team for which theyhave been getting paid for the past six years. Star Park was always the last batter up and could never hit the ball out of the park until they discovered what was considered 'a dream team.' The African American Chamber is not their enemy."