Chill-Can Affiliate Still Owes YSU $185,000

YOUNGSTOWN, Ohio – An affiliate of Joseph Company International – the Irvine, California, firm spearheading the stalled Chill-Can project on Youngstown’s East Side — still owes Youngstown State University Athletics nearly $200,000 from a marketing agreement the parties signed more than eight years ago.

According to YSU, Joseph subsidiary West Coast Chill Inc. has yet to pay the university approximately $185,000 in sponsorship dues related to a $300,000 sports marketing agreement the company signed in 2014.

Meanwhile, Joseph Company International’s building and plant in Irvine sold last year for $5.4 million, according to a report published in the Orange County Register dated Aug. 6, 2021. The building at 1711 Langley Ave. was sold to the fashion accessory company BB Simon LLC, The Register reported. Recent photographs show BB Simon’s logo fronting the building, while earlier pictures show Joseph Company International’s name there.

While the seller was not identified in The Register report, Joseph Company in 2016 listed the property as a source of a cash flow on a term sheet delivered to the city as ity negotiated incentive agreements for the Chill-Can project, according to documents obtained by The Business Journal.

The 2016 document lists 1711 Langley as a potential resource to fund the Chill-Can campus, estimating the 33,207-square-foot-plant’s value at $4 million and “[mortgage free] … if needed.”

Although the building has been sold, Joseph Company still lists its address as 1711 Langley. According to records from the Mahoning County auditor’s office, the company’s development subsidiary, M.J. Joseph Development Co., directs its property tax bills to that same address.

Youngstown State, however, is still waiting for the Joseph Company to satisfy its agreement with the athletics department.

On July 31, 2020, West Coast Chill made an initial payment of $100,000 toward the $300,000 debt. The payment was made after The Business Journal filed a public records request July 15, 2020, that sought documents related to agreements between YSU, Joseph Company and its affiliates.

Joseph Company pledged to pay off the agreement by that December. The company, however, ended up renegotiating the schedule to deliver installment payments of $5,000 per month as the COVID-19 pandemic took its toll.

The university has since received just three equal installments of $5,000, according to information provided by YSU to the Business Journal. Joseph Company or its affiliated companies paid these installments on March 9, April 14, and June 4, 2021, totaling $15,000, according to the university. That leaves a balance of approximately $185,000 still owed YSU.

YSU Athletics Director Ron Strollo says he’s stayed in communication with Joseph Company CEO Mitchell Joseph and relates that the businessman is insistent about paying the university in full.

“We’ve remained in contact,” Strollo says. “It’s still his intention to pay it off. He feels good about his business and is still positive about the Youngstown area.”

Joseph has said the company experienced challenges because of the pandemic and operations in California were completely shut down. That has led to delays throughout operations, including the Chill-Can project in Youngstown.

Joseph signed an agreement with YSU in July 2014 to market a non-caffeinated, sugar-free energy drink West Coast Chill produced. The agreement called for the company to pay YSU athletics $51,250 per year for two years with an option to renew each year for a period of 10 years.

Under its terms, years three through 10 would include an increase of 5% annually. The beverage was marketed as the “official” energy drink of YSU and was sold at all university athletics facilities and select Penguin Club events. The deal also included field, program and scoreboard advertising.

In 2020, Joseph said that his companies had contributed at least $112,500 to YSU, which he thought would be credited to the West Coast Chill sponsorship agreement. These contributions included $25,000 toward the YSU “Get It Done” campaign and $7,500 to the YSU Penguin Club for its Football Championship Group.

In another instance, Joseph was responsible for arranging Major League Baseball Hall of Fame catcher Johnny Bench to appear at the 2015 YSU First Pitch Baseball breakfast.

Nevertheless, West Coast Chill’s energy drink failed to catch on in Youngstown and the company discontinued its sale drink in Ohio in 2016. Still, the company continued to renew its agreement until 2020, records show. In some cases, Joseph Company International used advertising space in YSU football programs to tout the Chill-Can campus.

YSU reports no additional payments have been made to cure the company’s debt since the last installment of June 14, 2021. An internet search for West Coast Chill Inc. lists the company as “temporarily closed,” and its website, www.westcoastchill.com, is inactive.

In 2016, Joseph and Joseph Co. International announced its intention to build a $20 million research and manufacturing campus to produce the world’s first self-chilling can on the city’s East Side. M.J. Joseph Development Corp. promised to finish the project by August 2021 and hire at least 237 people. In return, the city awarded the project a $1.5 million water/wastewater grant and a 75% abatement for 10 years on property taxes that were memorialized in development and enterprise zone agreements.

Since work began on the project in 2017, three empty buildings sit at the site and the company reports a single employee has been hired.

The project is the source of a legal dispute between M.J. Joseph and the city now playing out in Mahoning County Common Pleas Court. The city, alleging breach of contract, filed a complaint in June 2021 asking the court to order the company to repay the $1.5 million, plus another $700,000 or so the city spent to relocate residents and demolish structures to prepare the site for development.

In September, Mahoning County Magistrate Dennis Sarisky ruled in favor of the city and its claim for $1.5 million. Attorneys for M.J. Joseph Development subsequently filed an objection to the magistrate’s decision on Oct. 12, likely prolonging the case. A trial date initially set for Oct. 17 was converted to a telephone conference. A new trial date is yet to be determined.

Pictured at top: Chill-Can site on Youngstown’s East Side.

Copyright 2022 The Business Journal, Youngstown, Ohio.