A local community development organization will receive $393,000 in exchange for dropping a lawsuit against the city of Toledo and others involved in the controversial sale of One Maritime Plaza.
Under a settlement announced Wednesday, the city will transfer the sale proceeds of $143,000 to United North, a nonprofit neighborhood group in North Toledo. Additionally, the Toledo-Lucas County Port Authority and a trust affiliated with the American Maritime Officers union will each pay United North $125,000.
The settlement ends months of controversy following a city-brokered deal to sell the seven-story office tower on the downtown riverfront in January. Under that arrangement, the current owners -- a subsidiary of the American Maritime Officers Union -- would have sold the building to the Port Authority for $143,000. The Port Authority also would have committed to making $757,000 in improvements to the property.
But there was a complication: As part of a $2.5 million federal Urban Development Action Grant that helped finance the building's construction in the early 1980s, the union was supposed to repay the grant to United North's predecessor. It never did because the building never generated enough profit to trigger repayment.
To satisfy United North, the parties offered the group the $143,000 in sale proceeds and the vacant St. James Hotel in North Toledo, which was owned by the union. United North had expressed an interest in the hotel, but said it couldn't renovate it without a larger payout from the sale of One Maritime Plaza, which had been appraised at $900,000 "as is."
Ultimately, city council approved the deal in February and awarded United North nothing.
United North, which was not included in the negotiations that led to the deal, was further outraged when it discovered emails in which Deputy Mayor Tom Crothers essentially told Port Authority officials to pick a sale price.
"I think you folks need to determine what you want to pay for the building and we'll 'fight the battles,' " Mr. Crothers wrote in a September email to Port Authority Chief Operating Officer Matt Sapara.
"Remember," he wrote in another email. " 'One dollar to one million dollars.' LOL!"
The conflict boiled over into Lucas County Common Pleas Court in March, when United North sued the city, the Port Authority, and the union, arguing in court documents that they conspired to deprive the neighborhood group of $10.6 million in loan repayments and interest. United North argued that the UDAG agreement and related mortgage agreements required the union to repay the grant in the event of a sale -- a position the other parties contested.
The $393,000 settlement will end the dispute, according to a joint statement issued Wednesday.
"The parties have reached this agreement in recognition of their collective desire to benefit the City as a whole and revitalize North Toledo," the statement said.
Terry Glazer, executive director of United North, said Wednesday he was satisfied with the outcome.
"I think all the parties have come together and came up with a compromise that is acceptable to everyone," he said.
United North will use the money from the settlement to further its mission of improving North Toledo, Mr. Glazer said. Among other activities, the group rehabs houses and is currently working to repair the shuttered Ohio Theater on Lagrange Street. He hopes to use the settlement money in the Vistula neighborhood, but said it's premature to discuss specifics.
"We need to talk to our board members and the neighborhood," he said. "There's not a lack of projects."
Matt Sapara, the port authority's vice president for operations and development, said later Wednesday that he expected a closing on the building's sale to his agency "by the end of the month."
Port authority staff have arranged for preliminary assessments of the building's systems to develop repair specifications so work can begin promptly, he said.
With the air-conditioning system, Mr. Sapara said as an example, "we know we need a new cooling tower, so we're getting that spec'ed out."
Regarding the controversy over the building's price, he said: "Our motives were pure. We went out and we got an appraisal, and we reduced the amount of fair market value by the expected amount of repairs."
The settlement, Mr. Sapara said, was the result of "reasonable people" coming together to compromise. Without it, he said, "there was an absolute, realistic possibility" of the port authority moving its offices out of the decaying building and other tenants fleeing soon thereafter because of its worsening condition.
City officials did not return phone calls for comment, nor did an attorney for the union.
Mr. Glazer said United North is still interested in renovating the St. James Hotel, calling it a "very important project," but he said the property wouldn't be involved in the One Maritime Plaza settlement.
Contact Tony Cook at: email@example.com, 419-724-6065 or on Twitter @tony__cook.