YOUNGSTOWN, Ohio – The city’s efforts to first develop – and now to acquire – the ill-fated Chill Can property on the East Side has proven a costly endeavor so far.
To date, the city has been stiffed on a $1.5 million development grant it awarded M.J. Joseph Development Corp.; incurred another $733,480.80 in acquisition, demolition and relocation costs; and through November has spent another $223,873.50 in legal fees as it wrestled with the developer in a prolonged court battle.
All told, the city is out $2,457,354.60 on a project that’s never materialized.
Nevertheless, the investment has been worth it, some officials say, as the city hopes to recoup some of its losses by acquiring the land and three vacant buildings at the 21-acre site as a sheriff’s sale draws near.
Gaining control of the land could bring benefits for years to come, said Councilman Julius Oliver, 1st Ward.
“I think it could be a great site for local industry to expand, a great site for an Amazon warehouse to set up,” he said. “It could also be a great place for recreation.”
Oliver said the site presents numerous opportunities for redevelopment. “There are a lot of different things we can do with that property,” he said. “It’s just a matter of us being able to fully own it again.”
The city, along with any other interested public bidders, will have that chance as the property goes up for auction through a sheriff’s sale Feb. 18.
Nearly two years ago, a Mahoning County Common Pleas court ordered M.J. Joseph to repay the city $1.5 million, finding that the company breached its development agreement by not completing the Chill Can project. A court then followed by slapping sanctions totaling $733,480.80 on Joseph Development. The company has also refused to pay those sanctions.
Meantime, in 2023 a court also ordered Joseph Development to pay MS Consultants, an architectural and engineering firm, $322,907.54 plus interest for work the company did at the site but was not paid for. MS Consultants initiated foreclosure proceedings against the developer in July 2023.
The city joined the complaint, and the court late last year ordered the assets to be auctioned at a sheriff’s sale. The city is seeking to recoup its $1.5 million and has acknowledged it would bid on the property.
The city in this case is considered a first position lienholder, meaning the city would recoup its interest up to $1.5 million. Should the property sell at a higher price, then the additional funds would go to pay second position MS Consultants toward its lien. A third party, businessman David Brinksey, also has a claim on the land.
How the Sale Works
Initially, that sale was scheduled for Nov. 11, with a follow-up sale set for Nov. 26 if necessary. However, three appraisers were unable to assess a value on the property, and the sale was canceled. Instead, the court approved using the appraisal value listed with the Mahoning County Auditor’s office of $2,069,370.00.
The auction is scheduled for 10 a.m. Feb. 18, according to court papers. All sheriff’s sales are conducted online.
The foreclosure process allows – with an order of a court – lenders to seek recovery from debtors by selling off related collateral that could help satisfy any debt owed, said Chris Roman, an auctioneer with George Roman Auctioneers in Canfield.
As such, a public auction is held to encourage interested bidders for the property, said Roman, who is not involved in this sale but has conducted similar auctions in the past.
Roman said it’s not unusual for the major lienholder to place a bid. “The city has the right to protect their interests and bid on the property like anybody else would,” he said.
Under the terms, the city would proffer what is known as a “credit bid” – in this case, up to $1.5 million. “It covers them financially,” he said.
According to court papers, the property must be sold at two-thirds of the appraised value, which comes to $1,552,027. A second sale date is scheduled for March 4 in case the property does not sell.
Should the city win the bid at that price, then $1.5 million would be credited and the city would incur minimal additional costs to obtain the land, Roman said.
Still, there’s no guarantee the city will emerge as the highest bidder, Roman added. “If there’s a party interested in buying the property that wants to use the land and those buildings, it could drive the price up,” he said, forcing the city to either increase its bid or let it sell at a higher price to another party.
Once a winning bid is determined, then the court would confirm the sale. That usually takes at least 30 days, Roman noted.
“I don’t think we’re going to have a problem,” Oliver said. “I don’t think anybody is going to outbid the city unless they have some major plans. If that’s the case, it’s probably better for them to negotiate with the city anyway.”
Moreover, the city still owns a portion of the Chill Can property that never transferred ownership to Joseph Development. “We still own a lot of that property,” he said.
Coming to a Close
A sale of the property would put to rest an odyssey that began more than eight years ago, when Joseph Co. International CEO Mitchell Joseph announced in October 2016 his intentions to invest more than $18 million to build a campus that would support manufacturing and research for self-chilling beverage cans and other products.
The venture promised to create 237 jobs by August 2021, per a development agreement it signed with the city in 2017, which awarded the project a $1.5 million development grant. The project never reported hiring more than two employees, and three buildings constructed at the site are vacant.
Anticipating court action, M.J. Joseph filed a complaint in June 2021 against the city, alleging the city did not have the authority to collect monetary damages or was entitled to the land. The city countersued for $2.8 million, demanding a refund of its development grant, relocation and acquisition expenses and computed lost income tax revenue.
MS Consultants filed its complaint in January 2023, seeking $322,907.80 from M.J. Joseph, arguing it was not paid for work it completed at the project site. After a court ruled against M.J. Joseph, MS Consultants filed a separate foreclosure action, which the city ultimately joined.
M.J. Joseph’s attorneys then withdrew their representation, and in May 2024 the court closed out the city’s litigation against the developer, as the city deemed it unlikely it would ever collect its money. MS Consultants had earlier voluntarily dismissed its case against the company.
From 2021 through November 2024, the litigation has cost the city another $233,873.50 in legal fees to its outside legal counsel, Manchester Newman & Bennett, according to city finance department records.
M.J. Joseph and its CEO have essentially walked away from all litigation and the entire project. The company’s website is no longer active, nor are its phone lines.
Should the city win its bid and acquire the property for approximately $1.5 million, there would not be enough left to satisfy the other lienholders in the case. Plus, the city would still end up with a net loss of approximately $1 million, given its legal fees, relocation and demolition expenses, as a result of the project.
Oliver said it’s important for the city to put the ordeal behind it and move forward, noting he would prefer the site to be used for economic development purposes, such as a manufacturer that provides family-sustaining jobs, or an academic partnership with an institution such as Youngstown State University.
“That’s my ultimate goal,” he said. “For local companies to expand or perhaps a partnership with YSU. I know there are people out there willing to do it.”