https://www.journal-news.com/news/" rel="nofollow - News April
16, 2021 By Rick
McCrabb
Records:
Middletown could pay
Manchester Inn owner $161K settlement to regain ownership
The
City of Middletown may own two downtown properties again if city
council approves paying the owner a settlement agreement, according
to county court and city documents reviewed by the Journal-News.
The city apparently entered into a contract
which left the city open to the ensuing lawsuit without any
protection and giving ALL
rights to the purchaser. It seems our law department needs to be
reeducated. If you recall, the city has sold other properties for $1
and subsequently repurchased at tax payer cost (out
of the General Slush Fund which contains all monies including Storm
Sewer, Auto and Gas Tax receipts from the state for
street maintenance, etc.).
In
2014, Grau’s company purchased each building for $1 from the city
as part of a redevelopment deal. Until December 2020, Grau was
unsuccessful in receiving the state historic preservation tax credits
in previous rounds. Both buildings have been vacant for several years
and have been the target of break-ins and vandalism.
The
city law department was or should have been aware that The Historic
Preservation Tax Credit is limited in number
to a few properties and the reason that Grau was unable to receive it
was that number had already been reached or was in process for other
property. Fraud?
A
previous Journal article excerpt states:
Editor’s
Note: This
story first published on Dec. 13, 2018.
Cincinnati-based
attorney Trout said Grau’s application and term sheet for the
current round of tax credit awards would have scored a 92 out of 100
even without the $500,000 funding from Downtown Middletown, Inc.
which was pledged in round 19, thus qualifying the project for the
Ohio State Historic Tax Credit. Trout said each time the tax credits
are delayed, the deadlines are automatically extended equal to the
period of delay beyond 30 days. He
also claimed the city breached the contract because it refused to
provide Grau the necessary letter of support for Ohio State Historic
Tax Credits for the September 2018 round of applications that were
due Oct. 1.
Trout
said the city’s refusal to provide a signed letter of support
“rendered the application insufficient, incomplete, and was unable
to be submitted.”
Because of that, the two-year period has not started or expired until
the city supports the tax credits application. No
wonder the city was libel. How
many other deals have been done like this and how much more is the
city paying off in law suits and
settlements?
Shall the
city law department continue
this
illegality ad
nauseum?
Back
to April 16, 2021 excerpt:
If
the emergency legislation is approved, the city will pay owner
William Grau $161,824.60 that constitutes reimbursement of expenses
for his eight years of ownership of the buildings, according to city
documents. Grau
agreed to develop the buildings into a hotel and brewery/distillery
and restaurant. The development agreement called for the project to
be completed within two years, by late 2016. When no development was
visible by October 2018, the city notified Grau of its intent to
exercise a clause in the development agreement to take back the
buildings under the legal action of reversion.
Two
months later, Grau filed legal action against the city to maintain
ownership of the buildings and the issue has been in the court system
ever since. Then
last month, Butler
County Common Pleas Court Judge Michael Oster
Jr. found there were no material issues of fact in the case and the
city was granted ownership of the buildings.
The
city and Grau negotiated a settlement, the city said. These expenses
“broadly constitute” work done to the buildings, studies done
regarding the feasibility of development, applications and
professional services regarding the tax credits needed for
development, tax payments, insurance, utilities and security measures
for the buildings, the city said.
If
the city had owned the buildings for the last eight years, it would
have incurred costs to maintain, secure and market them, according to
a staff report.
Which the city notoriously neglects to do,
check out the old Carnegie Library 0n 1st
Ave. A truly historic building now in unrecoverable condition. No
city funds available to
tear it down?
City
staff is recommending the settlement agreement as proposed after a
review of all expenses requested, saying the “reasonable settlement
amount” limits the additional monies that will be spent on attorney
fees and potential for the court to order a higher settlement amount.
Oh yes, close the barn door after the horse
is gone. And the city will own 2
buildings which may
be demolished at a cost of perhaps millions. The regular city
demolition buddies will eat that up.