YOUNGSTOWN — The city settled a lawsuit for $25,000 that was filed by the owner of a Subway sandwich shop that fought eviction from 20 Federal Place in court.

Gayatri Management Corp., the Subway franchisee, and its owner, Chhaya Joshi of Canfield, filed a March 7 objection to a Feb. 21 decision by Magistrate Timothy G. Welsh of Mahoning County Common Pleas Court in favor of the city.

Because of the objection, the March 31 eviction of the restaurant was put on hold. The business left the building last week after the $25,000 settlement.

After Welsh’s ruling, Robert T. Buch, the attorney representing Gayatri and Joshi, sent a letter to the city stating his clients were willing to settle the matter for $67,831, leave the city building and dismiss the case. The city rejected the offer.

“We settled for $25,000 in order to avoid the cost of continued litigation,” said city Law Director Jeff Limbian. “The number to resolve the matter became more reasonable. It was a cost benefit analysis. We’re very pleased with the resolution.”

Buch couldn’t be reached Monday to comment.

The settlement came after work began April 17 on a $6,979,038 project to remediate and partially demolish the city-owned 20 Federal Place building.

The Subway restaurant left the downtown building at 20 W. Federal St. within the past week, Limbian said.

Welsh ruled that the restaurant owners didn’t have a valid long-term lease at the building and it was there on a month-to-month basis.

But Welsh determined the city’s three-day notice to vacate on Sept. 23 — after sending eviction letters July 7 to all tenants at 20 Federal Place giving them either 30 or 60 days to vacate — was improper because the city collected rent from Subway in September and October. That led to the city filing the eviction notice that was effective March 31. The business then filed an appeal.

In the objection filing, Buch wrote that he disagreed with Welsh’s decision that a one-year lease agreement with a five-year option signed in September 2020 by Kevin Flinn, the city’s buildings and grounds commissioner, wasn’t valid. In September 2021, Lynn Kotler, a Subway leasing representative, told the city it wanted to exercise the five-year option.

Welsh ruled that for the lease and the options to be legal, state law requires at least two-thirds of city council to have approved them and the city charter requires the board of control to execute all contracts. Neither occurred, making the deal between Subway and Flinn invalid, he wrote.

In a July 15 email to Adam Buente, senior assistant law director, who asked that a financial demand be documented, Kotler wrote that Joshi was “willing to vacate by September, provided the buyout amount is acceptable.”

Kotler wrote that the contested lease she claimed expired Nov. 30, 2026, would cost at least an estimated $645,000 in loss of sales and that Joshi purchased the location in April 2015 for “more than half of the sales estimated.”

The city rejected that proposal, Limbian said.

REMAINING TENANT

The only other tenant remaining at 20 Federal Place is Carrier Services Group, which is storing fiber optic equipment there.

That equipment is going to have to be removed, Limbian said, because portions of it are located at the rear of the building on West Commerce Street, where a three-story addition to the original structure is being demolished.

“It is not safe or convenient for them to remain in the building,” Limbian said.

Carrier is “not yet agreeable” about leaving the building despite getting a three-day eviction notice in January, Limbian said.

“We are in discussions to resolve it amicably,” he said. “If not, we’ll file an action (in court) in the week.”

There were 19 tenants, taking up about 20 percent of the 332,000-square-foot building, before eviction notices were sent in July. Some of the tenants received extensions.

“Despite public criticism, we did a good job of getting tenants out in a 10-month period,” Limbian said.

Most of the former 20 Federal Place tenants found other locations while some went out of business.

The city received a $6.96 million Ohio Brownfield Remediation grant, announced last June, and is providing $2.32 million of its own money for the work at 20 Federal Place. The city is using part of its money for architectural designs, project management and costs related to seeking additional grants for the building.

What the city will do with the building after the remediation and partial demolition project is finished is uncertain.

The city wants to find a redeveloper for the downtown building and is seeking state and federal tax credits to assist a company that would be selected for that project.

The city purchased the building in November 2004 after Phar-Mor, a national retail store company, went out of business. The property was the Phar-Mor Centre, the company’s corporate headquarters. Before that, it was the flagship location of Strouss’ department store for several decades.

The city has tried unsuccessfully to sell the building in the past.

dskolnick@vindy.com