The university’s offers are for much more than the owner paid.
COLUMBUS — State lawmakers rejected requests from Youngstown State University to purchase two properties adjacent to campus after questions arose about the prices.
The state Controlling Board, which must sign off on such public spending, denied the university’s request to buy one property, The Rayen, at 158 W, Rayen Ave., for use as a future parking lot. The board deferred a decision on the purchase of an adjacent one containing Mighty Moe’s restaurant at 315 Elm St., which the university hopes to continue operating.
Controlling Board President Joe Secrest said the deferral allows the university to submit additional details about the purchase and the board to reconsider the request — “as is” — at a later date. The other property purchase will have to be revamped and resubmitted for future consideration.
“My hope is they reconfigure it and bring it back and address some of the questions that were asked,” he said.
The properties are owned by Mohammad Fard, according to documents. In its filing with the Controlling Board, YSU called the properties “an important strip of real estate located in the center of our campus” and said that it hoped to operate the restaurant “by either our food-service operator or an established chain restaurant.”
Rep. Jay Hottinger, a Republican from Newark, questioned the purchases, after noting the purchase price was substantially higher than what the current owner paid for them in recent years.
According to documents, the restaurant property was purchased in 2002 for $160,000. The other property was purchased in 2005 for $9,640.
The university agreed to pay $530,000 for the restaurant property and $90,000 for the other and submitted appraisals backing up the market values.
“They sold at prices that were substantially beneath what the university now was seeking to pay to purchase them,” Hottinger said, adding later, “I don’t think Youngstown’s real estate is exactly jumping off the market right now and seeing great prices. It’s not doing that anywhere in the country.”
Hottinger said he would like to see additional information on how YSU plans to use the properties.
“They didn’t have a good answer for me in terms of how these properties fit into their overall plan,” he said.
“For me, it would take them being able to better articulate exactly how these two properties fit into their core mission and why they’re essential for the operation of YSU.”
Atty. Greg Morgione, YSU associate general counsel, said the location of the two properties is well within the campus footprint, and that’s the main reason YSU seeks to buy them.
He confirmed that Fard paid $160,000 for the restaurant but said he bought it “as is” at the time and put a substantial amount of money into it to get it operational again. It is in “move-in” condition now, Morgione said.
He said Fard was working with the city in seeking a Clean Ohio Funds grant to tear down The Rayen, but the state program ran out of funds and the effort was dropped.
He noted that Mahoning County has The Rayen valued at $100,000 for tax purposes.
Ron Cole, YSU spokesman, said the university followed its normal procedure under state guidelines in securing appraisals for the property, and the appraisals were reviewed and approved by the state Department of Administrative Services before the issue went before the Controlling Board.
Both he and Morgione said the university will prepare additional information in an effort to address the Controlling Board’s concerns and resubmit the purchase requests.
The university plans to pay for the properties with money from a $1 million property-acquisition fund created as part of a $21 million loan issue borrowed in March 2009 to fund various campus improvements.
XCONTRIBUTOR: Harold Gwin, staff writer.