YOUNGSTOWN — The owners of The Enclave, a student-housing complex, claim Youngstown improperly withheld $440,000 owed to them from a promised water infrastructure grant and asked a judge to award the money.

The owners are seeking summary judgment — a ruling in favor of their lawsuit without a full trial — against the city insisting they complied with the development agreement for the money and Youngstown breached the contract.

“The undisputed facts prove each and every element of plaintiffs’ breach of contract claim against the city under contract law: the existence of a contract, performance by the plaintiff, breach by the defendant and damage or loss to the plaintiff,” wrote Douglas Ross, attorney for the owners of The Enclave.

Judge John M. Durkin of Mahoning County Common Pleas Court is hearing the case. Dominic J. DeLaurentis, his magistrate, may consider the summary judgment motion as soon as May 7.

Youngstown Campus Associates LLC of Pepper Pike, which developed the $16 million The Enclave project near Youngstown State University, entered into an agreement with the city on Sept. 14, 2017, for a one-year $4 million loan, a 100%, 15-year tax abatement and a $500,000 grant from the water fund to help defray the cost of water infrastructure expenses.

Youngstown Campus received $60,000 from the city in water funds on Feb. 26, 2018, and then turned over rights to The Enclave to two companies — Butterfli Holdings 001 LLC and Butterfli Holdings LLC 002 LLC, with the exact same Pepper Pike address as Youngstown Campus.

The Enclave consists of 64 units with 194 beds for YSU students at 310 Wick Ave.

The companies are seeking the remaining $440,000, but the city refuses to give the money.

The lawsuit, filed Sept. 23, contends breach of contract and that the city violated “a clear and unambiguous promise.”

In addition to the $440,000, the companies seek interest dating from Jan. 27, 2019, and court costs.

Adam Buente, the city’s deputy law director, declined comment Wednesday.

But in an Oct. 16 answer to the lawsuit, Buente wrote the complaint is “unenforceable as a matter of law and against public policy due to, among other things, illegality, impracticality and impossibility.”

He also wrote the companies “breached the contracts, either directly or indirectly,” their “conduct is unconscionable in its dealing with the city” and the city “believes the balance is not accurate.”

Ross wrote: “Based upon the city’s answer and public knowledge, it is no secret the city will primarily defend this matter by contending the city is not required to pay the remaining $440,000 because of the auditor of state’s findings regarding the city’s water and sewer development grant program.”

The state auditor in reports of the city’s finances in 2017 and 2018 determined Youngstown improperly used about $5.7 million from its water, wastewater and environmental sanitary funds for general fund purposes, primarily for economic development projects.

After receiving a significant amount of federal COVID-19 funds, the city repaid the money owed to the water, wastewater and environmental sanitation funds from its general fund in 2021.

The city also stopped the practice of using money from those restricted funds for economic development.

Ross wrote: “Such a legal defense, whether couched in terms of illegality, contrary to public policy or impossibility is nothing but a ‘red herring’ and fails, no matter how presented.”

Ross wrote the state auditor “did not determine that the city’s contracts with developers to pay the grants were illegal, void, contrary to law or invalid.” Instead, Ross wrote, the auditor determined the city could use its general fund and / or business development fund to pay for the grants.

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