Injunction Issued in Dispute over Eastern Gateway Parking Deck

YOUNGSTOWN, Ohio – A federal judge has ordered that USA Parking Systems Inc. and its subsidiary, USA Plaza Parking LLC, refrain from doing business at Eastern Gateway Community College’s parking deck downtown, according to court documents.

Judge Benita Y. Pearson of the U.S. District Court Northern District of Ohio ruled Nov. 23 that USA Parking must cease operating the deck, approving a motion for a preliminary injunction filed by EGCC on Nov. 2.

Eastern Gateway says in court documents that it terminated a management contract with USA Parking Aug. 31 and barred USA from operating the deck after that date. It also instructed tenants to remit payments to an escrow account pending the resolution of a legal dispute between the two parties, documents say.

However, USA Parking refused to do so and continued to collect fees through Nov. 2, court papers say.

Pearson also ordered USA Parking to turn over to EGCC records associated with the operation of the parking deck, such as swipe card codes, rent rolls, equipment and contact information for parking tenants.

Cleveland-based USA Parking filed a lawsuit against Eastern Gateway Community College, HEP-EGCC and Store Master Funding IV LLC in September after the community college informed the parking company that it would no longer require its services, court papers say. The company says Eastern Gateway is in breach of a management contract that USA Parking signed with the deck’s previous owners, documents say.

USA Parking once owned the property at 101 E. Federal St. and entered into a purchase agreement in 2014 that allowed HEP to buy the property for $3 million, provided that the parties enter into a management contract that would allow USA to manage the deck for 20 years, court papers show.  Under the terms of the agreement, HEP agreed to pay USA Parking $150,000 per year for the right to use 600 spaces in the parking garage and a management fee of $30,000 per year, the lawsuit said.

The building, now named Humphries Hall, also houses EGCC’s classrooms and offices.

HEP purchased the garage and building and then surrendered the title to Store Master, which in turn leased it HEP, court papers say.  

Eastern Gateway acquired the parking deck from Store Master in April and in August informed USA Parking that it would terminate the management agreement, according to court filings. On Aug. 4, the community college notified USA Parking that the contract would terminate effective Aug. 31, whereby USA “is required to cease collection of any further parking fees after that date,” according to an exhibit attached to the filings.

In her ruling, Pearson said that the agreement “makes clear that the parties did not intend for the rights bestowed by the management agreement to run with the land.” Furthermore, the judge stipulated that “landowners have an interest in exercising exclusive rights over their property” and that Eastern Gateway and parking tenants would “sustain immediate and irreparable injury,” absent injunctive relief.  

Any monetary harm incurred by USA Parking could be remedied should the company’s case prevails in court, Pearson wrote. A preliminary injunction, on the other hand, “will serve the public interest,” the opinion stated. 

Copyright 2021 The Business Journal, Youngstown, Ohio.