The Port Authority's deal to purchase One Maritime Plaza is to become final Thursday.
A Lucas County judge denied a local community development group's request Wednesday to block the controversial city-brokered sale of One Maritime Plaza.
United North, a nonprofit organization dedicated to assisting low-income residents in North Toledo, argued the deal would deprive it of a $10.6 million interest in the downtown riverfront property. That claim includes the principal and interest from a $2.5 million federal loan the city of Toledo awarded to the building's current owners, the American Maritime Officers Pension Plan, to help pay for construction of the seven-story tower in the early 1980s.
As a condition of the loan, the property's mortgage agreement named United North's predecessor, NorthRiver Development Corp., as the beneficiary of any loan repayments based on a formula outlined in the mortgage.
But the maritime officers pension has said it never made enough money from the building to trigger payments to United North.
City council approved the sale of the property to one of the building's tenants, the Toledo-Lucas County Port Authority, last month. The Port Authority will pay the maritime officers pension $143,000 in cash and make a commitment to spend $757,000 on upgrades. The city's approval becomes final Thursday because of a required 30-day waiting period after city council approval.
The deal was brokered by Mayor Mike Bell's administration, which United North claims undermined its negotiations with the Port Authority by essentially telling the Port Authority to pick a price.
United North "is to receive the proceeds of the repayment of the loan," the group argued in court filings. "The city now purports to release the mortgage without payment to United North."
After nearly two hours of oral arguments Wednesday, Lucas County Common Pleas Judge Gary Cook ruled against United North's request for a temporary restraining order that would have brought the deal to a halt. The judge questioned United North's claim that it had a property interest in the building and asked why it wouldn't be in the same legal situation after the sale as it is now. Ultimately he said United North didn't meet the burden of providing clear and convincing evidence that a restraining order was necessary.
The case still may go forward, but will have to do so on the court's normal docket.
Terry Glazer, executive director of United North, declined to comment immediately after the ruling, noting that he was only present for the end of the proceedings.
Matt Sapara, chief operating officer for the Port Authority, expressed gratitude for the decision.
"Now hopefully we can get to the business of fixing up that building," he said.
The Port Authority and the city have argued that despite an appraised value of $900,000, the building requires major repairs, including a new roof and improvements to its heating, air conditioning, and ventilation system. Mr. Glazer has argued that the appraised value was "as-is," and that the building should have been sold for a much higher value. Whether United North has a right to those sale proceeds is a matter of contention. The mortgage language is clear that payments should have gone to United North if the maritime officers pension plan made a large profit on the building but is less clear about whether repayment of the federal loan to the city based on the sale of the property also should go to United North.
The city contends that it could use the $123,000 as it sees fit, within the purposes of federal housing and development guidelines.
After the hearing, Paul Syring, the city's general counsel, told the attorney for United North that the city considers United North a sibling and suggested the two parties could find "some room" to talk further.
The victims, United North argued in its court filings, are the residents of the neighborhoods it serves.
The "city's actions would cause an injury in fact to the low-income residents of the neighborhood on United North's board and the residents of North Toledo," the group argued. "If unrestrained, the city's actions will … eliminate more than 2 million, and as many as 10 million, dollars which must be used for community development in North Toledo."
Contact Tony Cook at: firstname.lastname@example.org or 419-724-6065.