Court Rules for City, MS Consultants in Chill Can Foreclosure

YOUNGSTOWN, Ohio – Mahoning County Common Pleas Court Judge John Durkin ruled Thursday on behalf of the city of Youngstown and MS Consultants Inc. on a joint motion requesting foreclosure on property at the site of the stalled Chill Can project and to place the assets up for sale.  

The summary judgment entry filed Thursday ordered that project developer M.J. Joseph Development Corp. has three days to make good on the previous judgments against the company, which had proposed developing a manufacturing and research campus on the East Side, or the property would be foreclosed upon and go to sheriff’s sale.

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.

Thomas Hull II, the attorney retained by the city, and Luther Liggett Jr., an attorney representing MS Consultants, Columbus, filed the motion on behalf of their clients in Mahoning County Common Pleas Court in June. A third claim by Columbus-area businessman Richard Briskey, who joined the foreclosure action earlier this year, was not included in the June motion.

Judge Maureen Sweeney last year ordered Joseph Development to 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 the company 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. 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, Lou D’Apolito, assistant law director, said in June.

The judgment entry calls for the following payments:

• $2,150 in court costs to MS Consultants and $500 to the city for the final judicial report.

• Payments to the Mahoning County Treasurer for delinquent taxes, assessments, interest and penalties payable on the property.

• $1.5 million to the city and 3% interest from Nov. 21, 2022, plus $394.35 in court costs.

• $322,907.54 to MS Consultants, plus 18% annual interest from Oct. 5, 2018, and $278.47 in court costs.

The balance of sale proceeds, if any, would be held by the county sheriff pending further order of the court to be disbursed according to further order to any other lien holder or interested parties.

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

D’Apolito anticipated at the time that the city would be bidding on the land. Once the city retains ownership of the property, it would start to consider proposals to redevelop the site, he added.  

A sale of the property would conclude the saga 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 also negotiated that year 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 have withdrawn 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.

Pictured at top: The vacant Chill Can site in Youngstown.

Copyright 2024 The Business Journal, Youngstown, Ohio.