July 29, 2014

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Developer has expressed interest in St. Joe’s, city says

LORAIN — City officials are talking with a developer about taking over the struggling St. Joseph Community Center.

The early word is that the talks look promising.

St. Joseph center in Lorain. (CT file photo.)

St. Joseph center in Lorain. (CT file photo.)

“If the ongoing conversa­tions with the potential devel­oper continue as they have, I am extremely confident that St. Joseph’s will not only be saved, but will turn into a highly suc­cessful center,’’ said Robert Gilchrist, the city’s service director.

Neither Gilchrist nor Mayor Tony Krasienko would name the developer.

“I can’t tell you a whole lot,” Krasienko said. “The city is working on a proposal with a developer that would take over St. Joe’s.”

In the meantime, City Council may decide Monday whether to let the city continue to manage St. Joe’s for two more months using $200,000 in loans.

Gilchrist sent a letter along with new legislation to Council on Thursday morning that would allow the city to take out a $150,000 economic development loan from the Urban Development Action Grant Fund and another $50,000 loan through the Economic Development Fund to keep St. Joe’s open through Aug. 31.

The administration is asking the measure be passed as an emergency to “allow the new management team to be in place.”

The zero-interest loans will be repaid over six years at $25,000 a year from payroll withholding taxes from the VA clinic at St. Joe’s and any new tenants, according to the ordinance. If new tenants and the VA clinic’s taxes don’t cover the annual payment, the funds will come from the Economic Development Fund.

Gilchrist’s letter touts improvements made to the community center, including a reduction in operating costs by changing contractors, an increase in available space to lease and a new management team that is in the process of completing its due diligence on the facility.

Krasienko said these improvements lured the developer to the bargaining table.

“We’ve been working with this developer for some time now,” Krasienko said. “These improvements made it more of a sustainable proposal for the developer. We still have a few hurdles to get over.”

Krasienko would not give any more details, other than to say “it always comes down to money.”

St. Joe’s owner South Shore Development Corp. announced in April 2009 it was closing the center after a decade because it could no longer afford to keep it open due, in part, to high utility costs. City Council voted in December to let the city manage the facility for six months in an effort to make it profitable.

If the extension request passes, $80,000 in income taxes will be collected for another two months from the center’s employees, who work for tenants that include a satellite office of Lorain County Community College, the VA clinic and several nonprofit agencies and government offices. City Councilwoman Anne Molnar, D-at large, and Councilman Dan Given, D-at large, both said they need more information before deciding on the issue.

Krasienko said they wouldn’t ask for two more months and $200,000 “if it was something that was just a stop-gap measure in the short term. There’s no way the city can afford to subsidize the operation of St. Joe’s for any meaningful duration. We’re struggling to keep our own ship afloat.”

Word of a developer possibly signing on follows a call last weekend by Don Attie of the Vietnam Veterans Committee to have the county’s veterans attend Monday’s meeting at 7 p.m. at City Hall to let City Council know they support whatever measures are needed to keep St. Joe’s and the VA clinic inside open.