A local real estate broker has reached an out-of-court settlement with the owners of the Plaza Tower office building, who alleged in a high-profile dispute that he conspired with state officials to move lucrative state offices out of the building.
 
Michael Siegel of Corporate Realty reached the settlement Wednesday with the owners and managers of the building, Schumann and Mondona Rafizadeh of Houston and Bahram Arjmandi of Stillwater, Okla. Terms of the settlement were not disclosed.

Robert Kutcher, Siegel's attorney, said Friday the settlement was based "purely on economics" and not on any wrongdoing by Siegel. A trial in Dallas would have taken weeks and driven up legal fees for Siegel and his firm, Kutcher said. Kutcher and Siegel have maintained there was no credence to the allegations and were confident they would prevail in court.
 
"The settlement in no way contains any admission of liability on behalf of Mike Siegel or Corporate Realty," Kutcher said. Citing confidentiality agreements, Kutcher said, "I can tell you that under the circumstances, the settlement is fair."
Settlements often are for less that the projected cost of a trial. A trial could have cost roughly $100,000, lawyers said.
 
Siegel, citing the confidentiality agreement, declined to comment Friday. An attorney for the Rafizadehs and Arjmandi, Jon Bohn, did not return phone calls.
The now mostly empty 44-story building at 1001 Howard Ave. once housed 700 employees of various agencies of the state's departments of Social Services and Health and Hospitals. Such tenants pay millions of dollars in rent.
 
In 2001, complaints about working conditions inside the building became public, and later a class-action lawsuit was filed on behalf of state employees and others claiming they were made ill by exposure to mold in Plaza Tower and were concerned about possible asbestos exposure.
 
In 2002, the state offices were moved to 1010 Common St. under emergency procedures that allowed the state to bypass public bid laws.
 
The settlement does not mean the end of litigation over Plaza Tower. The Rafizadehs and Arjmandi are still suing the owners and managers of the 1010 Common building.
 
Siegel, who had often attempted to find office space for the state, was paid a $667,000 commission by the owners of 1010 Common for landing the long-term state leases, which have a five-year term and options for five-year renewals.
 
The Rafizadehs, who have controlled operations of the Plaza Tower since they bought it in 1992, allege that Siegel conspired with the owners of 1010 Common and state officials to move the state agencies.
 
Siegel and all others have denied the allegations.
 
Because the owners of 1010 Common are in Dallas and the lease documents were signed there, the Rafizadehs were able to sue in a Texas state court despite numerous efforts by defendants to move the case to New Orleans.
 
The Rafizadehs also are suing the state and several officials, alleging they conspired to break public bid laws in the case. One of their allegations is that state workers sabotaged the building, planted mold on ceiling tiles and created loose asbestos material that was discovered by investigators for the Louisiana Department of Environmental Quality.
 
James Bolner Jr., who represents the state of Louisiana and some state officials sued by the Rafizadehs, denied the allegations.
 
He also said he wasn't surprised at the settlement. "Siegel won't admit to doing anything wrong and he didn't," Bolner said. Bolner added that "it makes sense for Siegel, instead of incurring $75,000 (to $100,000) in more legal fees" for a lengthy trial.
 
Schumann Rafizadeh declined to comment other than to say the settlement "was fair" and that it allowed Siegel and Corporate Realty "to avoid trial."
 
Meanwhile, the state has counter-sued Plaza Tower owners and managers in an East Baton Rouge Parish state court, alleging fraud. Bolner said that owners were trying to move state workers out of the building to prepare it for sale to a nonprofit group, while trying to create grounds for them to collect damages for losing the state leases because of the alleged wrongful acts of others.
 
Other legal concerns for the Rafizadehs and Arjmandi include a temporary restraining order preventing sale of the building. A group of investors says it had a contract to purchase it but that the owners ignored the contract and placed the building's debt up for public auction.
 
Building owners and management also face a $120,000 fine for violating asbestos regulations.
 
Earlier this year, insurance companies for Plaza Tower owners settled in the class-action suit by state employees and others against them, paying $4.25 million. Schumann Rafizadeh said he vehemently objected to the settlement.
 
 

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