July 31, 2014

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Lorain Council OKs St. Joe’s bailout

LORAIN — The bailout of the financially hemorrhaging St. Joseph Community Center was unanimously approved Monday by City Council members.

Under the plan, which needs to be approved Wednesday by Lorain County commissioners, Lorain and the county would each pay $425,000 as part of a $1.35 million state taxpayer loan for the center with the state forgiving the remainder. City and county taxpayers are on the hook for $675,000 each to the Ohio Development Services Agency, formerly known as the Ohio Department of Development. The payment deadline is Dec. 31.

County commissioners are expected to approve the bailout. Commissioner Tom Williams, who has been critical of bailout efforts, said by phone after the Council meeting that he would support the plan as long as the county taxpayers aren’t asked to fund the center’s daily operations. Commissioners Ted Kalo and Lori Kokoski have previously expressed support for the plan.

Council members also approved spending $120,000 from Mercy Regional Medical Center to keep the center running. The Mercy money is a matching fund to a state taxpayer environmental grant.

Mayor Chase Ritenauer called the bailout a “critical first step” in bringing in a developer to take over the aging center at 205 W. 20th St., which has suffered from heating and cooling problems and a lack of tenants. Prospective developers weren’t willing to take on the debt.

“The state had to get out of the way,” Ritenauer said after the Council meeting.

Keeping the five-floor, 300,000-square foot former St. Joseph’s Hospital open has been an uphill battle. In August, Ohio Realty Advisers announced it was quitting as property manager of the center within 90 days, citing red ink and the lack of a bailout. A lawyer for the South Shore Development Corp., the nonprofit group that owns the center on behalf of the city and county, threatened to close the center if a deal wasn’t reached soon.

The center, whose tenants include a satellite branch of Lorain County Community College, local offices of U.S. Sen. Sherrod Brown, D-Avon, and U.S. Rep. Betty Sutton, D-Copley Township, and a Veterans Affairs clinic, lost $300,000 last year and $125,000 through July. The center has monthly costs of between $30,000 and $45,000 and loses between $15,000 and $30,000 monthly, according to Doug Rangel, executive director of the Lorain Development Corp., Lorain’s private business consultant.

Red ink has been a barrier to finding tenants for the center. Plans to locate Valor Home, a shelter for homeless veterans, stalled earlier this year because of uncertainty over the center’s future.

The city plans to use a $1. 6 million federal taxpayer loan to demolish older parts of the center, portions of which date back to 1892. City leaders hope the demolition will make the center more viable along with paying off the debt.

“We are beginning to get to the end of the tunnel and see some light,” said Councilman Eddie Edwards, D-5th Ward. “It’s going to be a plus for the state and also for the county and especially veterans.”

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.