SAUGATUCK, Mich. — A lawsuit has been filed against the city of Saugatuck over its short-term rental cap, though the city has yet to be served.
In late September, Saugatuck Neighbors, a nonprofit, filed the civil suit in 48th Circuit Court in Allegan County, alleging the Saugatuck City Council failed to follow policy on potential conflicts of interest when it passed a 20% cap on short-term rentals (STRs) in its R1 residential districts.
“The city is attempting to pass new ordinances to regulate short-term rental properties… but the City has failed to follow its own City Charter,” reads the legal brief written by attorneys at Varnum LLP, representing Saugatuck Neighbors.
Specifically, the brief names former Saugatuck Mayor Lauren Stanton as a council member who stood to “financially gain” from the cap, given she owns property in the city’s R2 residential district.
“Such property owners receive a financial gain from the new ordinance… as [they] are allowed to continue using their property as an STR or market the property as having the ability for STRs if the property is ever sold,” attorneys say.
Conversely, the attorney for the city of Saugatuck has stated that Stanton did not have a conflict of interest — a determination made clear at multiple public meetings.
Still, attorneys allege the city council failed to vote on whether there was a conflict — a practice mandated by the Saugatuck City Charter — and allowed Stanton to vote on the cap when she should have abstained.
“Because the City did not follow its City Charter when adopting its new STR ordinances, the City Council’s action were ultra vires [beyond the powers] and the new ordinance are ineffective,” attorneys say.
As of Wednesday, Nov. 20, the suit had not been served to the city of Saugatuck, meaning the 48th Circuit Court cannot declare a judgment on the case.
In a phone call conversation with FOX 17, the city denied any allegations of wrongdoing and said the short-term rental cap was legally passed.
Saugatuck Neighbors declined to comment.
