YOUNGSTOWN, Ohio – We thought the days of economic development fiascos were long past but the Chill-Can saga continues to prove us wrong.
The closing of the city of Youngstown’s seven-year court battle with M.J. Development Corp. punctuates with bold exclamation marks why swift action is essential when development deals go south. Today, Youngstown awaits court-ordered payments of $733,480.80 in sanctions and another $1.5 million in damages. Good luck collecting.
Chill-Can had all the elements of an epic success story. In October 2016, Mitchell Joseph, a Youngstown native and CEO of Joseph Development, returned to the city of his youth and announced plans to build a $20 million plant that would manufacture self-chilling beverage cans and employ 250 on the site where Joseph’s grandfather founded a bottling company.
To support the project, Youngstown purchased and prepared land – buying people’s houses and basically demolishing an entire neighborhood – and City Council approved incentives that included a $1.5 million site development grant. Mahoning County Land Bank acquired property for the project as well.
Despite promises of a production start in summer 2018, only three buildings were constructed on the campus, structures that remain idle today.
Not until late March 2021 – nearly a year after an investigative series published by The Business Journal and ProPublica red-flagged the lack of progress on the project – did City Hall serve notice on Joseph Development that it could face litigation for defaulting on the development agreements.
Don’t assume lessons were learned.
The city’s tax incentive review committee – a state-mandated tool for communities to monitor compliance with such deals – has not met in more than two years. As a result, Joseph Development still receives a 75% abatement on property taxes. (Again, good luck collecting.) Worse, other companies noncompliant with tax abatement promises continue to benefit from those deals as well.
In April, the city hired a local accounting firm to assist with preparation of an enterprise zone report for 2023. But the city has compliance reports for 2021 and 2022 that it has yet to convene the review committee to discuss.
Why are we not surprised?