Chill-Can Developer Granted Extension to Answer City’s Allegations

YOUNGSTOWN, Ohio – The developer of the ill-fated Chill-Can project on the East Side has been granted another 14 days to respond to a complaint filed by the city last month.

“They asked for a little more time to file a response, asked for an extension, and we acceded to that,” said Youngstown law director Jeff Limbian.  “They usually need to respond within 28 days.”

The city filed a counterclaim in Mahoning County Common Pleas Court June 17 against M.J. Joseph Development Corp. alleging the developer violated two development agreements it signed in 2017. 

The city is suing Joseph Development, based in Irvine, Calif., for at least $2.8 million in damages, according to the complaint.

Papers filed in court Wednesday by Joseph Development’s attorney, Brian Kopp, said that additional time is needed in order to research and prepare a response. 

Common Pleas Judge R. Scott Krichbaum granted Joseph Development the 14-day extension. 

The dispute centers around a proposed $20 million project spearheaded by Joseph Development to construct a campus dedicated to the production of the world’s first self chilling can.  The developer’s CEO, Mitchell Joseph, also said he would expand the operation to include research and development of other self-chilling technologies.

According to court papers, the city provided the project a $1.5 million development grant, spent $414,948 in relocation and acquisition costs, and covered another $318,532 in demolition and abatement expenses to help the project.

In return, Joseph was to have completed three buildings by October 2017 and have created at least 150 jobs by now and 237 jobs by August of this year. 

Since ground was broken on the project in November 2016, three buildings were constructed but none are in operation. Just a handful of employees were hired.

“The city has seen zero, or minimal, permanent full-time employees created, and there is not even one fully completed building,” the city’s complaint said.  

The city is suing to recoup the cost of the incentives, the project’s land, and projected lost income tax revenue totaling $575,000. 

M.J. Joseph Development on May 25 filed an initial complaint in court, alleging the city did not have the authority to reclaim any money from the company.

According to court documents, Joseph Development 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.

“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 then.  “To counter these statements, we are asking the court to clarify the rights and obligations of both parties so MJJDC can move forward.”

Attempts to resolve the impasse proved futile.  Joseph Development agreed to pay the city $250,000 in order to end the dispute, but the city rejected the offer.

Limbian said the parties have not spoken since Joseph Development filed the first complaint May 25. 

“There’s been no contact; none whatsoever from my part,” Limbian said.  “I don’t think we’ll hear anything until there is a pretrial. Everything right now is on hold.”

Copyright 2021 The Business Journal, Youngstown, Ohio.