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Port authority files suit to get clear title to hundreds of acres



Published: Fri, January 25, 2013 @ 7:18 p.m.

Port authority files suit to get clear title to hundreds of acres

WARREN

The Western Reserve Port Authority has filed a complaint in Trumbull County Common Pleas Court in an attempt to clarify mineral rights for hundreds of acres at the Youngstown-Warren Regional Airport in Vienna Township.

The complaint names as defendants 15 gas and oil companies, many of them smaller Ohio companies that mined natural gas from the relatively shallow Clinton sandstone formation.

The port authority owns about 1,500 acres at the airport, about half of it tied up in leases from the late 1970s and early 1980s, said Atty. Dan Keating, longtime legal counsel to the authority.

Atty. James Blomstrom says the issues raised in the complaint are similar to ones faced by many Mahoning Valley landowners who signed mineral rights leases before they knew that drillers were interested in acquiring mineral rights for the deeper Utica shale formation. Blomstrom is with the firm Harrington, Hoppe & Mitchell Ltd. of Youngstown, which is representing the authority.

For example, the complaint says the port authority believes some of the wells have been dormant for many years, and that should allow the mineral rights to revert back to the authorityunder what is called a “continuous development clause.”

The complaint says companies secured 15 drilling permits on port authority land. Of those, seven are currently producing gas, one has not produced gas since 1999, and one has not produced since 1992. One was never drilled, and one was abandoned.

“In the event that the [gas company] shall fail to so develop the premises, this lease shall terminate,” the complaint says, quoting from lease documents.

But the Youngstown officials who approved leases for airport land in the 1980s may have looked a little further down the road than many other property owners of that time, said Blomstrom. The airport was owned by the city until the city turned it over to the port authority in 1992.

Blomstrom said the port authority’s leases were unusual for their time in that some specified which shale formations were being leased.

One lease, for example, covered only oil and gas rights from the Clinton formation to the Queenston formations just below it.

The Utica formation that companies such as BP America want to mine for horizontal drilling using hydraulic fracturing are well below those formations.

BP paid a signing bonus of $3,900 per acre to thousands of property owners last year and offered royalties of 17.5 percent on minerals mined from the property, so the port authority could be looking at millions of dollars in revenue from signing bonuses and mineral rights.

Blomstrom wouldn’t answer directly when asked whether he thinks the lawsuit will be successful but noted, “I don’t believe the port would have gone forward if it didn’t think it would be successful, but the decision isn’t up to the lawyers. It’s up to the judge.”

The lawsuit is assigned to Judge Ronald Rice.

Civil suits generally take about two years to work their way through the Trumbull County Common Pleas Court.


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