Planner files suit against Chill-Can

MS Consultants seeks $322,907 plus interest, alleges contract breach

YOUNGSTOWN — MS Consultants Inc. filed a breach of contract suit against M.J. Joseph Development Corp., owners of the Chill-Can site, contending the company owes it $322,907 in unpaid bills for design work done on the stalled project.

In the lawsuit filed in Mahoning County Common Pleas Court, MS listed five claims against M.J. Joseph, including two counts of breach of contract for paying only $291,921 on a $614,829 bill.

M.J. Joseph was supposed to make its final payment to MS on Oct. 5, 2018, according to the lawsuit filed by Luther L. Liggett Jr. of Dublin, an attorney hired by MS.

MS also is seeking an annual interest payment of 18 percent for the past four-plus years “not as a penalty but in order to make MS Consultants whole,” according to the lawsuit. That would be close to $250,000 as of Tuesday.

“To secure payment, MS Consultants filed a lien affidavit on the subject real estate” of the Chill-Can site Dec. 9, the lawsuit states.

An attorney representing M.J. Joseph couldn’t be reached Tuesday to comment.

The lawsuit states the Chill-Can “contract and task orders” are a “combined 103 pages,” and weren’t included in the lawsuit “for the convenience of the court and parties.”

M.J. Joseph signed a contract with MS on Dec. 21, 2016, for design services for its proposed Chill-Can plant on the city’s East Side. The project remains undeveloped.

The lawsuit is assigned to Judge Maureen Sweeney, who also is overseeing the city of Youngstown’s lawsuit against the Chill-Can property owners.

On Nov. 21, 2022, a written decision from Sweeney affirmed a Sept. 28 ruling from Magistrate Dennis J. Sarisky that M.J. Joseph “breached the agreements” it had with the city to receive $1.5 million in water and wastewater grants for the project and “the city is entitled to damages.”

M.J. Joseph failed to construct four finished buildings at the location and create 237 jobs by Aug. 31, 2021, Sweeney wrote, which violated agreements it had with the city. To date, there is one employee and three unfinished buildings at the 21-acre location.

Sweeney also wrote in her ruling that a hearing will be set to determine further potential damages to the city.

A telephone conference hearing is scheduled for Jan. 30.

Court documents in that case state the city entered into a development agreement with M.J. Joseph on Oct. 20, 2016, in which the company agreed to “construct and operate bottling and warehouse facilities and employ local residents. In turn, the city would issue payment of certain grant funds, transfer title to certain parcels of land and provide tax incentives to” Joseph. That specifically included the $1.5 million grant.

On July 27, 2017, there was an “amended and restated development agreement” that requires M.J. Joseph to construct four buildings and employ 237 workers by Aug. 31, 2021.

Before entering the agreement, “the city law department made clear” to Mitchell Joseph, who heads the company, by letter dated March 28, 2017, to his attorney that if the Chill-Can owners “failed to fulfill their obligations, the city would seek or could seek a number of specific remedies in addition to monetary damages. Plaintiffs chose to enter” into the agreement, according to Sweeney’s decision.

The city lawsuit seeks other money: $414,948 it spent on acquiring 15 properties it bought for the project, which also include relocation expenses. It also lists $318,532 in demolition and abatement costs and as of June 2021, at least a $575,000 loss in income tax revenue from the project’s failure. That lawsuit said the “full amount of lost income tax revenue will be proven at trial,” but the city stated it was losing about $18,333 a month. At that rate, the city would have lost almost $350,000 in additional income tax revenue.

Mitchell Joseph, who was raised in Youngstown, had said the project, which broke ground in November 2016, would cost about $18.8 million and be in full operation by 2018 to produce the world’s only self-chilling beverage can.

The city filed a $2.8 million breach-of-contract lawsuit June 17, 2021, contending the company failed to live up to its promises to develop the business.

Knowing the city’s lawsuit was coming, M.J. Joseph and Joseph Manufacturing Co. Inc., a sister company, filed a May 24, 2021, lawsuit against the city to stop it from reclaiming the $1.5 million in grants. That suit also contends the city doesn’t have any legal rights to money, property and buildings.

In a March 29, 2021, certified letter, the city informed Joseph he had 60 days to construct a number of buildings and hire about 150 workers or it would file a lawsuit. The city followed through June 17, 2021, with the lawsuit that was postponed because of the Joseph legal action.

M.J. Joseph attorneys have said the city’s lawsuit has caused the project to come to a standstill while acknowledging construction delays.

Also, West Coast Chill, a M.J. Joseph sister company that isn’t operating, owes $185,000 to Youngstown State University in unpaid sponsorship fees to the school’s athletic department. YSU has not filed any legal action regarding the amount it is owed.

West Coast Chill signed a $300,000 marketing deal in July 2014 with YSU and has paid $115,000 of it.


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