September 23, 2014

Elyria
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Council approval wasn`t needed for land deal

LORAIN – City Council`s approval wasn`t needed to give Riverview Realty Management Co. an option to buy land at Riverbend Commerce Park, according to city planner Don Romancik.

During a meeting Sunday where eastside residents raised concerns about the proposed development of a limestone grinding factory at Riverbend, Councilman Tony Krasienko said he planned to investigate whether Council`s authority was bypassed when an option to buy 9.2 acres of land was given to Riverview Realty in December 2006.

Council`s approval wasn`t needed, however, because the Riverbend Commerce Park is in an urban renewal zone, which gives the city the right to buy and sell land up to $100,000 without legislative authority, Romancik said.

Krasienko, who will be mayor in January, said the administration needs to keep the Council more in the loop on such projects.

“Council hasn`t seen anything yet,” he said. “City Council knows essentially nothing about the proposed project.”

Riverbend Commerce Park, which was known until April as the Colorado Industrial Park for its location just south of Colorado Avenue, includes Camaco Lorain Manufacturing, Horizon Day Care Center and a distribution center for the post office.

Riverview Realty, which is owned by Lorain businessman Pete Falbo, purchased the option to buy the land for $7,500, according to city records.

Romancik said companies purchase options instead of buying immediately so they don`t lose money in case they can`t find a use for the land, and cities benefit because they receive some additional revenue and have at least a hope that a business will come in.

Under an option agreement, the city retains ownership of the land, and can force the option holder to match any offers that come along for the land from other companies.

Riverview Realty was originally hoping to lease the land to a Greek shipping company, but the deal never happened, said Sandy Prudoff, director of the city`s Community Development Department.

Falbo hopes to soon exercise its option by purchasing the land outright, for $80,000 an acre, and lease it to Cleveland-based Oglebay Norton Co. to build the limestone plant, according to Tony Giardini, an attorney representing Riverview Realty.

Giardini would not discuss how much Oglebay will pay for the lease.

City Council`s approval will have to give its OK when Falbo exercises his option to buy the land. The city`s Planning Commission, Zoning Board of Appeals and the city`s Board of Control also have to OK the deal, Romancik said.

Council`s approval also will be needed for Oglebay Norton to set up shop.

Even though Riverview Realty plans to lease the property in question, the city will still benefit more from selling the land than if it would lease directly to Oglebay Norton because the city won`t have responsibilities to a tenant and won`t be obligated to improve upon the property, Romancik said.

“We`re not in a position to be leasing land,” he said. “They may have to make improvements on that land, and they would be using that lease to merely recoup their investment.”

Romancik said the city gave Riverview Realty an option to buy in the first place because the company had been successful in bringing businesses to the city. Lafarge North America on Colorado Avenue, a manufacturer, is one such business that Falbo brought to the city, Romancik said.

The fact that they`re doing what the city asked them to do is testament to the system working, Romancik said.

“We`ve agreed to work with Riverview and they`re fulfilling their end of the bargain,” he said.

Contact Adam Wright at 653-6257 or awright@chroniclet.com.