YOUNGSTOWN — A new lawsuit filed Monday against the city by the Chill-Can developers is “just a first punch, like any kid from the East Side would do,” said city Law Director Jeff Limbian — the first blow in what he’s now expecting will be a “long haul” legal battle.
The complaint for declaratory judgment, filed in Mahoning County courts by attorneys for the embattled M.J. Joseph Development Corp., would keep city officials from clawing back the $1.5 million grant they gave to develop the plant, preempting legal action they vowed to take against the long-stalled jobs prospect.
After years of project delays and missed deadlines, city officials in late March gave M.J. Joseph 60 days to meet benchmarks for the project set as far back as 2017.
But Monday’s suit claims the developer hasn’t defaulted on its agreement with the city and questions whether the city has the authority to demand reimbursement or take over its property in recuperation.
The complaint claims the company has since 2017 faced construction delays for “a myriad of reasons that are known to” city officials, including pandemic-related delays in 2020 and 2021.
“Representatives of the city have repeatedly claimed Youngstown has powers and avenues of recourse that are not explicitly spelled out in the contracts,” Chill-Can attorney Brian Kopp said in a statement Monday. “To counter those statements, we are asking the court to clarify the rights and obligations of both parties so [M.J. Joseph] can move forward.
“Unfortunately, the city’s rhetoric makes it extremely difficult for [M.J. Joseph] to achieve its stated goal: completing the facility, hiring local residents, starting production and making Youngstown and the Mahoning Valley a center of the company’s operations.”
Limbian said city officials met briefly with outside counsel on the Monday filing, and remain confident in the litigation they expect to file against M.J. Joseph Development Co. and its head, Mitchell Joseph, after the aforementioned 60-day window closes Wednesday.
“This was a cheap attempt to frame the narrative,” Limbian told Mahoning Matters. “Obviously Mitchell Joseph doesn’t care about the taxpayers and the citizens of Youngstown. [The complaint] demonstrates he only cares about himself. It shows, once again, that he’s trying to frame himself as the victim and he’s clearly not the victim.
“We understand now Mitchell is going to make this the long haul. And that’s fine, as long as we protect the taxpayers’ money. That’s what we will do.”
City officials in 2017 gave M.J. Joseph a $1.5 million grant from the city’s water, wastewater and environmental sanitation fund to develop the site, and also spent $360,000 to purchase and demolish the homes of about a dozen East Side residents who lived on about 21 acres around the proposed site.
They also gave developers a 75-percent tax exemption for 10 years.
That project provided for “the clearance of significant slum and blight in the area,” most of which was paid for by Joseph Development, which was formed in 2016 to develop the site, according to the Monday complaint.
To date, the developers have borrowed more than $4 million for the project, according to the complaint.
The 2017 agreement requires the grant funding to be paid as reimbursement for contracting work, and for invoices to be provided. It only allows the city to reclaim the funding if the developer “fails to comply” with the funding’s regulations.
The complaint urges the court to declare the city has no legal footing to do that, and that “the city’s remedies, if any, stemming from an alleged breach of the development and enterprise agreements, exist solely in equity.”
Kopp in his statement Monday said the company is looking forward to seeing pandemic restrictions lifted this year.
“We have committed millions of our own dollars to this project and we want and need it to become an integral part of our operations,” he said. “We acknowledge that there have been delays, but our global business partners continue to work with us, and we hope the city will do the same.
“It was necessary to file the lawsuit to secure my client’s investment and to ensure that this project will pay dividends to the city and [M.J. Joseph] for years to come.”