The attorney general says rules for buying nonprofit holdings weren't followed.
By NANCY TULLIS
VINDICATOR STAFF WRITER
YOUNGSTOWN -- Mahoning County Treasurer John Reardon and the Ohio attorney general's office both have questions about the county's purchase of Oakhill Renaissance Place.
The attorney general wants to ensure procedures required by law for purchase of a nonprofit corporation's holdings are followed.
The treasurer fears the county won't be able to afford Oakhill if the county's sales tax fails when it's up for renewal next year.
Reardon said he has been criticized for opposing the Oakhill deal because he is asking questions and has been accused of trying to stop it for political or personal reasons.
"I'm not opposed, but there are a lot of questions to be answered, and a lot of research and due diligence is needed," he said. "My concerns are not personal or political. I'm not a lawyer or an architect. My questions are legitimate, financial ones."
Reardon said he is still seeking answers to three essential, reasonable questions about paying for Oakhill: "How much do we need, when do we need it, and where is the money coming from?"
He said he is concerned about the Oakhill purchase because the county will lose $14 million or $15 million in annual revenue if voters don't renew the sales tax next year.
"We have to question whether or not we have the revenue stream to fund mandated programs and a large capital project at the same time," he said. "If we lose $14 [million] or $15 million this time, we will have $37 [million] or $38 million to work with. That will be operating the general fund on bare essentials, and we will be hard pressed to keep the jail open."
Meanwhile, while county officials continue to study the purchase, Mark Anthony, spokesman for Ohio Attorney General Jim Petro, said his office filed a motion with the U.S. Bankruptcy Court, Northern District of Ohio Eastern Division, on Wednesday to review the Oakhill purchase. A hearing is set for Sept. 20 in bankruptcy court.
The county bought Oakhill Renaissance Place out of bankruptcy court July 28 for $75,000, with the intent to move Job and Family Services and other county offices into the former Forum Health Southside Medical Center.
County officials said Wednesday that with other obligations tied to Oakhill, the purchase price will be about $1 million and renovation could cost as much as $5 million.
A statement released Thursday by Anthony says: "The attorney general's motion does not mean the state of Ohio objects to the sale or believes that it is not in the best interests of the community or the creditors of the Southside Community Development Corp. It simply requests the bankruptcy court to order the parties involved to comply with Ohio law."
Anthony said state law obliges everyone involved in the deal to backpedal a bit while the attorney general's office ensures the procedures required by law are followed.
The attorney general's office stated in its motion that under Ohio laws for nonprofit corporations, "the transfer of the property could not go forward unless one of three requirements was met: Court approval after notice to the attorney general; notice to the attorney general for investigative review; or sale to another [nonprofit] corporation. It is the attorney general's position that none of the three prongs has been met."
The motion states that no one notified the Ohio Attorney General's Charitable Law Section or the Southside Community Development Corp.'s members of the July 28 bankruptcy hearing in which Southside's property was sold to the county, and "such notice normally triggers an investigation by the attorney general."
The motion also states the attorney general requested confidential information about the sale Tuesday from the bankruptcy trustee, and in the weeks before the hearing hopes to determine the validity of the sale."