Economic Development

City to Settle Water Grants Lawsuit for $1.45M

YOUNGSTOWN, Ohio – Youngstown will pay $1.45 million plus related costs to settle a lawsuit filed about its use of water and wastewater grants to support economic development in the city.

The settlement agreement is one of several items on a full agenda City Council will consider Wednesday night.

Other items are agreements related to construction of the riverfront park and amphitheater and management to operate the amphitheater and the Covelli Centre; a $2.5 million float loan to support production of a film in Youngstown and extending the term of an existing float loan; and a request to the federal government to preserve its historic tax credit program.

Early last year, former Boardman Township Trustee Kathy Miller led a group of plaintiffs who represent Youngstown water customers in a suit contesting the city’s use of water and wastewater grants to fund economic development projects. The lawsuit contended that the grants represent an “improper expenditure” of water department funds.

The ordinance before council calls for the city to authorize credits totaling $1.45 million to water customers inside and outside the city and pay reasonable attorneys fees, court costs and litigation expenses from the water budget. The settlement, which concedes no admission of liability by either party, also provides that any future water grant swill be subject to a written policy and procedure the parties agree to.

On Wednesday council also will consider a formal agreement with the U.S. Department of Housing and Urban Development and accept $4 million for the amphitheater park fund. In October, HUD approved a $4 million loan guarantee for the project.

Last week, the city and the Youngstown Foundation announced a $3 million naming rights agreement.

JAC Management Group LLC would manage the amphitheater under an agreement council will consider that also covers the Covelli Centre, which JAC already manages. Under the five-year agreement, JAC would operate both tthrough Dec. 31, 2022.

Two float loans are also on the agenda.

Roadkill McGillicutty Production LLC is seeking $2.5 million to support production of a movie within the city. The loan, which would be backed by an irrevocable letter of credit, would be offered at 0.25% interest for up to 18 months.

A separate item requests to extend the loan expiration period for 2Deep Estates LLC’s $375,000 float loan from March 2018 until September. The development agreement originally was for up to 12 months at 0.25%.

Published by The Business Journal, Youngstown, Ohio.