Chill-Can Developer Files Complaint against City of Youngstown

YOUNGSTOWN, Ohio – The developer of the stalled Chill-Can project on the East Side has filed a complaint for declaratory judgment against the city, arguing that Youngstown does not have the authority to reclaim about $2 million it is seeking from the project owner.

Attorney Brian Kopp, representing the M.J. Joseph Development Co. of Irvine, Calif., filed the complaint in Mahoning County Common Pleas Court Monday.

The complaint states that M.J. Joseph Development denies it breached two agreements it signed with the city in 2017, in which the city awarded the project a $1.5 million development grant and a tax abatement of 75% over 10 years.

However, the project has not moved forward to the city’s satisfaction. The city placed the company on notice March 26 that it is in default of the two agreements.

Officials have also made it clear that the city would take legal action as early as next week to recoup its grant money, rescind the tax abatement and repossess the land where the project sits.

“It was necessary to file the lawsuit to ensure my client’s investment and to ensure that this project will pays dividends to the city and MJJDC for years to come,” Kopp said in a statement.

According to court documents, Joseph Co. claims that the city does not have the right to recover grant funds for the alleged default, has no right to title and possession of the company’s property, and does not possess a right to monetary damages under the enterprise agreement contract.

“The city’s remedies, if any, stemming from an alleged breach of the development and enterprise agreements, exist solely in equity based upon the plain and unambiguous language of the contractural provisions,” the lawsuit said, while its right to recover title to the property is limited by construction financing liens held by the Joseph Co.

“Representatives of the city have repeatedly claimed Youngstown has the powers and avenues of recourse that are not explicitly spelled out in the contracts,” Kopp said. “To counter these statements, we are asking the court to clarify the rights and obligations of both parties so MJJDC can move forward.”

Kopp said the city’s statements in recent weeks “makes it extremely difficult for MJJDC to achieve its goal: completing the facility, hiring local residents, starting production, and making Youngstown and the Mahoning Valley a center of the company’s operations.”

City Law Director Jeff Limbian said he wasn’t surprised by the filing. “It’s a typical attempt to be the victim when in fact he’s not the victim,” he said. “We have to be stewards of taxpayer dollars and that’s what we’ll continue to do. There’s no substance, and we’ll deal with this in two weeks when we file.”

In November 2016, Joseph Co. CEO Mitchell Joseph broke ground on a proposed $20 million “Chill-Can” campus that would be dedicated to production and research of the world’s first commercially viable self-chilling can. The 22-acre site on the city’s East Side would also house research and development operations related to other self-chilling technologies.

The city awarded the project $1.5 million in development grant money, paid about $400,000 to relocate residents and demolish houses at the site, and gave Joseph Co. a 10-year, 75% break on property taxes.

In return, Joseph promised to bring 237 jobs to the site by August 2021. The city says that Joseph was to have at least 150 employees there by now.

Yet more than four years later, three buildings at the site remain empty, few people have been hired, and not a single can has been produced.

“The future is bright for our company and we are excited about the opportunities that will accompany the end of pandemic-related restrictions,” Joseph said in a statement. “We have committed millions of our own dollars to this project and we want and need it to become and integral part of our operations. We acknowledge that there have been delays, but our global partners continue to work with us, we hope the city will do the same.”

Related coverage:

May 19, 2021 | City Taking Chill-Can Developer to Court
May 12, 2021 | Land, Delays Entangle City and Chill-Can Developer
May 8, 2021 | Chill-Can Attorney Offers Proposal to Resolve Dispute with City
April 16, 2021 | City Stands by Its Ultimatum to Chill-Can
April 14, 2021 | Chill-Can Developer Vows to Complete Project

Copyright 2021 The Business Journal, Youngstown, Ohio.