Chill-Can Attorney Offers Proposal to Resolve Dispute with City
YOUNGSTOWN, Ohio – A proposal to resolve the dispute between the city and the developer of the Chill-Can project is on the table, but the parties are still very far apart on the matter, officials say.
“There’s a significant difference of where they hope to be and where we expect them to be,” said Jeff Limbian, the city’s law director.
Brian Kopp, a local attorney representing California-based M.J. Joseph Development Co., the project’s developer, presented the proposal to Limbian and outside counsel Joe Houser on Friday.
“We’re not close to a resolution. But they have at least come back with an offer,” Limbian said.
Limbian declined to provide details of the proposal until Mayor Tito Brown and other city officials have reviewed it. He said the city should have a reply sometime next week.
City officials delivered an ultimatum March 26 to the Joseph Co. and its CEO, Mitchell Joseph: Either complete the “chill can” beverage-manufacturing complex it began nearly five years ago or face legal consequences.
The city in 2017 provided the company with a $1.5 million development grant to underwrite the project. To make way for the proposed $20 million project — which Joseph promised would create more than 200 jobs, the city spent nearly $400,000 to demolish houses and relocate the remaining residents of an East Side neighborhood to make way for the development.
The city also provided the developer with a tax abatement package of 75% over 10 years.
In return, the Joseph Co. was to complete three buildings by the close of 2017 and begin production at the complex. By August of 2021, the company pledged to have hired at least 237 people.
According to the city, the developer has missed every major benchmark related to the project.
Joseph has said that the facilities would serve as a manufacturing and research campus devoted to development and production of the world’s first self-chilling beverage can. He said the entire development would require a $20 million investment.
Joseph has also suggested the complex could be used to produce small kegs used in the beer industry.
However, the project fell far behind schedule and has screeched to a halt. Three empty buildings resembling aircraft hangars sit at the site, and just a handful of people have been hired, mostly in security. Not a single can has been produced.
In a statement released to the press in April, Joseph said that he is still committed to completing the project.
“I want to assure the people of the Mahoning Valley, especially the residents of the city of Youngstown, that we have never wavered in our commitment to the Chill Can Beverage and Technology project,” he said. “To date, we have invested $5 million of our own funds into the project above and beyond the grant from the city and we will continue to do whatever is necessary to make the East Side facility a center of innovation and manufacturing.”
In his statement, Joseph said the impact of the COVID-19 pandemic halted progress at the complex.
“The pandemic impacted every aspect of our business in the U.S. and abroad,” Joseph said. “For over a year, the shutdown of the global economy has interrupted our supply chains, disrupted our operations, and affected our suppliers, vendors, and customers.”
Mayor Brown vowed March 26 that the city would take legal action against the developer unless he fulfilled his promises to the city within 60 days. Should the project not show substantial completion, the city could take measures to claw back its $1.5 million, reclaim the land and rescind Joseph Co.’s tax break.
“Nothing has changed in regard to the timeline,” Limbian said Friday after the meeting.
It was the third such meeting between the attorneys since the city placed Joseph on notice. The parties have agreed to meet again in about two weeks, according to Limbian.
Calls and an email to attorney Kopp were not returned in time for this posting.
Earlier meetings elicited very little in terms of resolving the issue, Limbian said.
“Our hope is that there is some accommodation,” Limbian said. “We’re at least talking about possible options.”
Copyright 2023 The Business Journal, Youngstown, Ohio.