New Jersey Group Buys California Palms Complex for $6.5M

AUSTINTOWN, Ohio – The California Palms building near the intersection of Interstate 80 and state Route 46 has sold to a New Jersey entity for $6.5 million, according to records filed with the Mahoning County Auditor’s office.

The sale could put to rest years of legal problems associated with the troubled property at 5455 Clarkins Dr.

GEM Consulting Group LLC, based in Jackson, N.J., purchased the building on Aug. 30 from Pender Capital Asset Based Lending Fund LP, records show. According to Ohio Secretary of State records, GEM incorporated in Ohio on Aug. 26. The transaction was recorded on Sept. 12.

According to the auditor’s website, the building and land appraised at $2.2 million for tax purposes.

GEM Consulting lists Moshe Saffer as its authorized representative, according to incorporation documents filed with the Secretary of State. No additional information related to the company was immediately available.

The property has been the source of contention and controversy for some time.

Pender Capital purchased the building out of foreclosure in April of 2021 from California Palms LLC for $4 million, records show.  The complex once housed California Palms Addiction Recovery Center.

However, according to documents filed in Mahoning County Common Pleas court, “defendants in the foreclosure proceeding and prior owners of the subject real estate failed to vacate the property.”

After several delays, including a California Palms LLC’s bankruptcy, the court issued a writ of restitution, granting the Mahoning County Sheriff authority to “restore the premises to its rightful owner, Pender.”

In April of this year, the Mahoning Count Sheriff’s office evicted tenants there.  The court on June 23 upheld the evictions and denied a motion to dismiss an effort by California Palms and six of its residents for injunctive relief.

In January, the U.S. government filed a complaint in U.S. District Court alleging that California Palms and its operator, Sebastian Rucci, defrauded Medicaid for more than $5 million.  Federal agents searched the premises in October 2021, and seized approximately $600,000 from California Palms’ bank accounts. The case is still pending and no criminal charges have been filed.

Copyright 2024 The Business Journal, Youngstown, Ohio.