Youngstown council OKs settling 2 lawsuits, costing city $520,000

YOUNGSTOWN – City council agreed to permit the board of control to settle two lawsuits: giving $80,000 and other financial considerations to the owners of the former Anthony’s on the River building and $440,000 to a student housing complex for water improvements.

Council voted 7-0 Wednesday to authorize the board to resolve both legal matters.

The board of control will vote on approving the settlements at its next meeting, April 25, said city Law Director Lori Shells Simmons, a board member.

Two Bridges LLC, which owns the Anthony’s property, filed a federal lawsuit Nov. 13, 2020, in response to the city demolishing the 14 Oak Hill Ave. building on Aug. 22, 2020.

The company sued for $212,000 in damages along with attorney fees and court costs.

The settlement agreement has the city paying $80,000 as well as court costs — which are currently zero — as well as removing a $48,000 demolition assessment and $10,675 in interest on that assessment, both of which are on Two Bridges’ tax statement as delinquent.

The tax bill shows there’s a structure on the property, which there hasn’t been for nearly four years, increasing the delinquent amount to $89,001.

As part of the settlement, the city agreed to have the tax bill corrected and pay any remaining delinquent tax balance, estimated to be $10,000.

Before the demolition, the property had a $5,402 delinquent tax bill.

U.S. Specialty Insurance Co., which was the city’s insurance company at the time of the demolition, agreed to pay $25,000 of the settlement cost. The city’s portion of $65,000 will come out of its environmental sanitation fund.

Each side will pay its own attorney fees.

At Wednesday’s meeting, Councilman Julius Oliver, D-1st Ward, asked if this was the end of the litigation.

City Finance Director Kyle Miasek said council will need to approve legislation removing the demolition assessment and the interest.

The demolition was done without first informing city council, which was going to vote four days later on paying for an emergency demolition.

City council initially refused to pay the $48,000 demolition fee until June 2, 2021, when it was told by Jeff Limbian, then the law director, that the city was in danger of being sued for nonpayment of that bill.

Councilwoman Anita Davis, D-6th Ward, asked Wednesday who gave the order to demolish the building.

Michael Durkin, the city’s code enforcement and blight remediation superintendent, said: “I’m responding in reluctance because I feel the mayor should be responding to this.”

Mayor Jamael Tito Brown didn’t attend Wednesday’s meeting.

Durkin started to say it was fire Chief Barry Finley who made the decision, but didn’t finish, saying: “This has litigation attached to it.”

Asked by Davis if it should be discussed now, Shells Simmons said: “Perhaps in another setting.”

Councilman Mike Ray, D-4th Ward, said it could be discussed in executive session. No request for that was made Wednesday.

The structure demolished by the city was built in 1910 and opened as Anthony’s on the River in 1997, closing about a decade later and remaining vacant. Two Bridges bought it for $100,000 on Feb. 20, 2019, contending it planned to use it for a restaurant, offices and housing.

Finley and Durkin inspected the building on June 12, 2020, to determine if it posed a fire hazard.

They observed the roof had apparently sunk about 6 to 12 inches on all sides. Finley concluded that day that the building was a fire hazard and danger to human life. It was demolished Aug. 22, 2020.

In its lawsuit, Two Bridges said it had repaired the roof, removed debris from the building and moved an antique bar in before it was demolished.

By the time of the emergency demolition, several municipal code violations and related complaints were filed against Two Bridges. The city mailed multiple notices to Two Bridges in 2019 advising the building was in unacceptable condition, but sent them to the vacant building and no one from Two Bridges received any notices.

Two Bridges contended in the lawsuit that the city’s emergency demolition ordinance, which allows buildings to be taken down, violates the Ohio Constitution and Youngstown deprived it of its property without due process in violation of the U.S. Constitution’s 14th Amendment.

While the state constitution claim was dismissed, U.S. District Court Judge Benita Y. Pearson denied a motion from the city that it had “statutory immunity” from the U.S. Constitution’s 14th Amendment on May 10, 2022. The U.S. Court of Appeals for the 6th District rejected the city’s appeal on June 15, 2023, sending the case back to Pearson.

A tentative settlement was reached Dec. 11. The city was supposed to pay no later than Jan. 31.

When it didn’t, Charles Dunlap, Two Bridges’ attorney, filed a motion in federal court to seek the settlement payment. After that, the city moved to pay Two Bridges.


The other settlement, which the board of control has to finalize, is to pay $440,000 to the owners of The Enclave, a student-housing complex near Youngstown State University, which filed a breach-of-contract lawsuit Sept. 13 against the city for improperly withholding that amount owed to them from a promised water infrastructure grant.

The city will pay the full amount out of its business development fund and not the water fund under legislation passed Wednesday by council.

Youngstown Campus Associates LLC of Pepper Pike, which developed the $16 million project, 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, 2016, and then turned over rights to The Enclave to two companies – Butterfli Holdings 001 LLC and Butterfli Holdings 002 LLC, both with the same Pepper Pike address as Youngstown Campus.

The Enclave consists of 64 units with 104 beds for YSU students at 310 Wick Ave.

The city contested paying the $440,000 because 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 sanitation funds for general fund purposes, primarily funding for economic development projects.

After receiving a large amount of federal COVID-19 relief dollars, the city repaid the money owed to the three funds from its general fund in 2021 and stopped the practice of using money from those funds for economic development.

The settlement agreement includes “no admissions of wrongdoing or liability on the part of any party.”

The city will pay the money no later than April 30 under the agreement. Each party is paying its own attorney fees.

Have an interesting story? Contact David Skolnick by email at dskolnick@vindy.com. Follow him on X, formerly Twitter, @dskolnick.


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