Auditor: Oakhill won’t bankrupt the county

Published: Thu, May 19, 2016 @ 12:10 a.m.

By Peter H. Milliken


Oak Hill Revenue and Expenses

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A comprehensive reporting of the revenues and operating expenses of the Oak Hill Renaissance Center from 2006-2016.

Mahoning County still owes $11.4 million of the $15.2 million it borrowed to renovate Oakhill Renaissance Place, plus more than $3 million in interest on the remaining debt.

That is not an insurmountable burden for the county, however, said Auditor Ralph T. Meacham.

“I don’t think it’s a burden that the county cannot maintain, and, if it was, the [bond] rating agencies certainly would let us know,” he said in a Wednesday news conference in which he released Oakhill financial information.

“We have debt capacity of $70 million. We could borrow another $70 million, if we wanted to,” he said, adding he wouldn’t encourage the county to borrow that amount.

“The county is fiscally solid right now,” Meacham said.

From an operating standpoint, rents paid by Oakhill tenants, which include Head Start and the city health department, cover most of the operating costs of the former hospital turned into a government office complex.

The county collected $1,405,891 in rents last year from Oakhill tenants, and spent $1,591,031 to operate the complex, including utilities, and security and maintenance costs, for an operating shortfall of only $185,140.

The county acquired the 353,000-square-foot Oak-hill complex in 2006 in U.S. Bankruptcy Court.

Located at 345 Oak Hill Ave. on the city’s South Side, Oakhill is the former Forum Health Southside Medical Center. It was built in stages between 1910 and 1972.

To acquire the building, the county paid the $75,000 purchase price, plus $454,101 in real-estate taxes, a $436,000 Ohio Department of Development loan and a $10,000 mechanic’s lien, all predating the county’s purchase of the facility.

Before the county’s department of Job and Family Services moved to Oakhill in 2007, the county was paying $449,000 a year in rent, not including utility and maintenance costs, for the Cafaro Co.-owned Garland Plaza JFS offices, whose roof leaked.

Garland Plaza, which housed JFS for 19 years, was on the city’s East Side.

In 2006, the last full year JFS was at Garland, occupancy costs to the county totaled about $1,150,000 there, including rent, security provided by unarmed JFS employee guards, cleaning, repairs and utilities, George Tablack said in 2010, when he was county administrator.

Oakhill security is provided by armed county deputy sheriffs with full arrest authority.

Had JFS stayed in its 100,000-square-foot space at Garland under a 15-year lease, Cafaro officials said the company could spend $1 million to $2 million on renovations, after which the annual rent alone would escalate to between $604,305 and $732,964, Tablack said.

Under that scenario, the county’s total occupancy costs to keep JFS at Garland, including rent, security, utilities and maintenance, would have risen to $1.5 million to $1.7 million a year, he said.

At Oakhill, JFS pays the county $756,720 in annual rent, derived primarily from state and federal funds, for the 81,193 square feet it occupies. That figure includes utilities, cleaning, maintenance and security.

With 224 employees, JFS is the largest Oakhill occupant in terms of number of employees and space used.

Meacham said the county needs to find more government offices and nonprofit organizations to fill the 52 percent of the Oakhill complex that remains vacant.

He also said the county needs a long-range plan to maximize Oakhill’s value to taxpayers.

Stacy Marling, chief deputy auditor, said the bond covenants for the money borrowed for Oakhill renovations discourage for-profit tenants. The county also would have to pay real-estate taxes on any portion of the building occupied by a for-profit business.

“Is it a structurally sound building? Yes. It’s also a hospital, so what we need to do to make that an office building is costly,” said Carol Rimedio-Righetti, chairwoman of the county commissioners.

“We have to aggressively market the building” to government agencies and nonprofit organizations, but not jeopardize its real-estate tax-exempt status, she said.

“The commissioners are continuously looking at options for Oakhill,” in terms of finding new occupants, said Audrey Tillis, the commissioners’ executive director.

Many of the county agencies at Oakhill, including the board of elections, recycling division, auto title department and veterans’ service commission, moved there from the county’s former South Side Annex, 2801 Market St.

Anthony Traficanti, the only current county commissioner in office when the county bought Oak- hill, could not be reached to comment.

He and then-Commissioner David Ludt voted in favor of the Oakhill purchase.

John A. McNally, then a commissioner and now Youngstown’s mayor, voted against the purchase.

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