USA Parking Responds to EGCC Deck Closure
YOUNGSTOWN, Ohio – A previous owner of Eastern Gateway Community College’s parking deck downtown says EGCC’s decision to close the upper parking floors has little to do with his company’s legal dispute with the college.
“We stand ready and willing to resolve this matter on amicable terms instead of waiting for the next few years of hearing them pass the buck,” said Lou Frangos, chairman of The Frangos Group in Cleveland, the parent of USA Parking Systems Inc.
Earlier this month, EGCC said that it would have to close the upper floors of the parking deck because ongoing litigation with USA Parking has impeded its efforts to fund improvements to the structure.
“USA Parking through our legal team has made numerous attempts to resolve the litigation,” Frangos said in an email. “We have offered numerous settlement proposals to EGCC and also were willing to mediate this matter. They never responded.”
Frangos in his email said EGCC has “many more problems internally than with USA Parking,” noting the college is holding city parking “hostage and blaming USAP.”
According to a letter distributed by EGCC to patrons of the downtown deck, the Champion Street entrance and exit that lead to the top four floors of the deck would be closed beginning Aug. 8 until the college is able to secure funding to repair the garage ramps.
Reserved parking spaces in the basement are not affected by the closure.
“Due to decades of neglect, we know major structural improvements are needed but we need additional funding to do so, which brings us to today,” stated the notice, written by EGCC Senior Vice President Art Daly.
The structure was built in the mid-1970s, and the letter does not specifically mention that USA Parking was a source of neglect.
“USA Parking had made millions of dollars of improvements to the garage under our ownership,” Frangos said. “EGCC and the partner they contracted with were supposed to make all the repairs to the garage themselves.”
The letter said EGCC “has been unable to secure the financing needed to make these improvements due to continued litigation with the previous owners, USA Parking.”
EGCC has been locked in litigation with USA parking since 2020. That year, USA Parking filed a complaint in federal court against HEP-EGCC Ohio, an entity that held title to the parking garage. It also named Store Master Funding VI LLC and EGCC as defendants.
According to court papers, USA Parking sold the garage to HEP in 2014 with the condition that it sign a 20-year management contract where it would pay USA $150,000 a year for the use of 600 parking spaces and a management fee of $30,000 per year. However, HEP sold the deck to Store Master Funding VI, which then sold the deck to Eastern Gateway in April 2020.
Eastern Gateway then notified USA that it would terminate the management contract as of Aug. 31, 2021.
USA Parking sued HEP, Store Master Funding and Eastern Gateway for breach of contract. Two years ago, Judge Benita Pearson ruled that HEP must pay USA Parking $5.3 million for breach of contract.
However, Frangos maintains that EGCC “had no authority to cancel the management agreement,” contending that the agreement transcended ownership of the deck. That is because USA Parking provided $2 million in financing for the new owners, Frangos said.
A subsequent amended complaint filed by USA Parking in September 2021 sought to reclaim title to the deck plus another $8 million in damages, naming HEP, Eastern Gateway and Store Master as defendants.
In February 2022, U.S. Judge Benita Pearson granted Eastern Gateway, Store Master and Huntington Bank’s motions to dismiss the amended complaint, court records show. She denied HEP’s motion to dismiss, but it is unclear whether HEP has any assets.
USA Parking has appealed the ruling to the 6th Circuit Court of Appeals.
“There’s really nothing more to say about this,” Daly said. “We purchased a building; our plan was to upgrade the deck; the lawsuits prevented us from making the upgrades.”
Daly said until the matter is resolved, EGCC cannot raise funding for repairs to the garage.
“There is an appeal, and we have motioned for dismissal on the federal level. Until that goes away, we stand by our statement,” Daly said.
Copyright 2023 The Business Journal, Youngstown, Ohio.