City, MS Consultants Ask Court to Foreclose on Chill Can Site

YOUNGSTOWN, Ohio – The city and an engineering firm with offices here have filed a joint motion asking a court to order the foreclosure on the stalled Chill Can site and place the assets up for sale. 

Thomas Hull II, the attorney retained by the city, and Luther Liggett Jr., an attorney representing MS Consultants Inc., Columbus, filed the motion on behalf of their clients in Mahoning County Common Pleas Court on Tuesday.

A third claim by Columbus-area businessman Richard Briskey, who joined the foreclosure action earlier this year, is not included in the motion filed Tuesday.

According to court papers, the city and MS consultants claim they have valid liens on the property, which consists of approximately 22 acres and three empty buildings on the city’s east side.

Judge Maureen Sweeney last year ordered that Chill Can project developer M.J. Joseph Development Corp. pay the city $1.5 million for breach of contract. The court subsequently ruled that the company also owes the city another $733,480.80 in sanctions.

The same court last year awarded MS Consultants $322,907.54 plus 18% interest in damages against M.J. Joseph Development for work that MS was never paid for – but completed – at the project site. 

The city’s claim relative to the foreclosure complaint includes the $1.5 million lien, plus another $394.35 in court costs. It does not include the additional money awarded through sanctions.

To date, M.J. Joseph has not made any payments toward the $1.5 million judgment lien, said Lou D’Apolito, assistant law director.

“The first step is to get this back to us,” he said, referring to the property. 

The motion asks the court to recognize that the city holds a valid first judgment and MS Consultants a valid second judgment on the property. According to court papers, the parties request that the court issue a summary judgment in their favor since M.J. Joseph has failed to present reasons and evidence that would warrant a trial.

D’Apolito said he’s confident the court will approve the joint motion. However, he’s unsure as to how long the process will take before a sale is concluded. “It’s hard to say because there are so many moving pieces,” he said.

Some of the land at the site is still owned by the city, as the parcels were never transferred to M.J. Joseph for the project, D’Apolito said. At least one of the buildings was constructed on some property that is city-owned.

D’Apolito said should Judge John Durkin approve the joint motion, the assets would then go to auction. “We’ll be bidding,” he said. Proceeds from the sale would also go to satisfy MS Consultant’s claim.

Third-party claimant Briskey was allowed by the court to join the foreclosure action in January. Late last year, a Franklin County Common Pleas Court ruled against M.J. Joseph Development, Joseph Co. International, Joseph Manufacturing Co., and CEO Mitchell Joseph and awarded more than $2.5 million in damages to Briskey for unpaid loans the businessman tendered.

According to court papers, Briskey “has asserted his alleged interest by way of an intervening complaint, however, any interest of his is behind that of the city of Youngstown and MS Consultants Inc.”

D’Apolito said that once the city retains ownership of the property, it would start to consider proposals to redevelop the site. “I think we have enough equity to gain back the property,” he said. “I think we’re in pretty good shape.”

A sale of the property would put to rest an odyssey that began nearly eight years ago, when Joseph Co. International CEO Mitchell Joseph announced 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 developer, based in Irvine, Calif., and the city in 2017 agreed to an enterprise zone agreement that awarded property tax abatements to support the project. The city and Joseph that year also negotiated a separate agreement that awarded a $1.5 million development grant to help the project. The city also spent more than $733,000 in relocation and demolition expenses to clear the neighborhood to make way for the Chill Can campus.

The development agreement was contingent on the project being finished and employing 237 people by August 2021. The development was never completed and, according to city records, just a single employee was hired.

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 a 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.

In the meantime, M.J. Joseph’s attorneys withdrew their representation. And in May, 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.

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.

The foreclosure case is the last piece to be resolved, D’Apolito said, and he expressed optimism on the future of the development site.

“We’re finally at a point where I can see daylight,” he said. “I know there’s a lot of inquiry and interest in the property. Hopefully, they’re big ideas and exciting for the community. We just have to let it play out.”

Copyright 2024 The Business Journal, Youngstown, Ohio.