Lawsuit threatened in Toledo-Oregon border dispute

3/30/2005

A border dispute between Toledo and Oregon is heating up as a factory project and millions in potential tax revenue for the cities are at stake.

Negotiations between the cities to share tax revenue generated by about 51 1/2 acres of disputed territory along Duck Creek at the mouth of the Maumee River have reached an impasse.

Oregon Mayor Marge Brown, upset by several developments yesterday, said she was considering a lawsuit. "I'm going to give a call to my law director, and I think that's what we are going to have to do."

And Toledo Mayor Jack Ford contends that "Oregon tried to rush me into a decision [on tax revenue sharing] before we found out that it was Toledo property."

How a final boundary might be drawn by a court could determine which city can claim a $350 million U.S. Coking Group factory and potentially millions in tax revenue.

The coke works would produce an ingredient essential for producing steel.

Toledo believes its reckoning of the boundary, based on a 1919 survey map of where Duck Creek once ran, is the correct one. That border means the plant would be more than 90 percent in Toledo.

"We did not know there was a [border] dispute about that until Feb. 3, when Oregon asked us about it," Mayor Ford said.

Even so, Toledo, Mayor Ford said, is still willing to share the tax revenue from the project with Oregon, which lured the project to the site over three years ago.

Ms. Brown said she was "upset" over a memo Toledo Law Director Barb Herring wrote yesterday requesting that a new boundary in Toledo's favor be officially recognized by Lucas County agencies.

Ms. Herring sent the memo to Lucas County Auditor Larry Kaczala, whose office runs the county real estate database. She also sent a letter to Fuller & Henry, the Toledo law firm representing U.S. Coking Group. Yesterday's letter said the boundary would be changed and it assured that potential tax credits and other benefits available to Toledo projects would move forward.

Adding to the dispute and Ms. Brown's ire was Mr. Kaczala's contention yesterday that his office had determined a new boundary in Toledo's favor more than six months ago, a fact that Toledo was aware of, he said.

Ms. Brown said she was surprised to hear that fact and was concerned that Toledo might have kept the border knowledge a secret.

But Ms. Herring and Steve Herwat, executive director of the Toledo-Lucas County Plan Commissions, said they were not aware that a new boundary had been approved by the auditor more than six months ago. They said the border issue for them is only about three weeks old and came to light after Oregon made a public records request of Toledo maps and records to clarify the border. Only then did Toledo officials realize the border was "mismarked" by about 500 feet, they said.

And with regard to the broken down negotiations over how long the tax-sharing agreement would last, Mayor Ford said that officials from both cities "met four times on weekends and other days and I believe we thought we had reached an agreement.''

After those sessions, Mr. Ford said, Toledo officials believed a tax-sharing deal lasting 40 years was agreed upon. "That was in sync with what most likely is the life of this particular project."

"But when they went back and thought about it more, they wanted to add another element." That's when Oregon insisted on 40-year agreement with an automatic option for renewal, Mayor Ford said.

"I can't see 40 years into the future, and I don't know that I want to bind the city to an agreement in perpetuity. I don't know what the world is going to look like then."

"So we have tried to come up with a reasonable time frame, and 40 years was our last offer, which at one point I thought was accepted," Mayor Ford said.

Oregon disputes Toledo's boundary claim, which involves how far Duck Creek has moved since Toledo first annexed the land in 1872 on its eastern border. Duck Creek originates in Navarre Park in East Toledo and empties into the Maumee River near the Port of Toledo. It has marked the traditional Toledo-Oregon border since 1957 when Oregon was incorporated.

Mr. Kaczala said yesterday that the Toledo-Lucas County Port Authority, which owns the property and plans to lease it to U.S. Coking Group, asked his office to research the boundary. Using old maps, his staff concluded that the coke works would fall mostly inside Toledo's borders.

He said Toledo and the port authority were informed of the results of the research in a meeting that he did not attend. The main researcher for his staff is serving in Iraq, he said.

"The weird thing about that is we had already done that. It's funny. We told everyone that the boundary was mostly in Toledo," he said. "We turned this over to our tax map people and engineers, and we told everybody [six months ago] that this is what it is. People don't get interested in who owns what until money gets involved."

The county updates its maps in the online real estate database once a year, and so the new Toledo boundary still is not apparent on the Web site, Mr. Kaczala said.

Jim Hartung, president of the port authority, said that his agency did ask for the research, but he said that he never heard about a conclusion.

Contact Christopher D. Kirkpatrick

at: ckirkpatrick@theblade.com

or 419-724-6077.