ELYRIA — The Lorain County commissioners on Wednesday voted unanimously to approve a deal that supporters hope will keep St. Joseph Community Center up and running.
The agreement between the state, the county and the city of Lorain calls for both the city and county to pay $425,000 each to pay off a $1.3 million loan to South Shore Community Development Corp., which owns St. Joe’s. The city and county would have been on the hook for $675,000 each if the center had closed because they had guaranteed the loan would be paid back.
Commissioner Tom Williams, who has expressed concerns about St. Joe’s long-term viability, said the deal saves the county money no matter what happens with the former hospital building that has been plagued with financial and physical problems.
“We really have no choice,” he said before the vote. “If the center fails, we have to pay the state $675,000.”
The state will forgive the remainder of the loan, but will receive a portion of proceeds from a planned sale of part of the building to a group of veterans seeking to build transitional housing for veterans in need at St. Joe’s. The state also would get money from any sale of the St. Joe’s property to a private developer, something Lorain Development Corp. Director Doug Rangel said is still in the works.
The state already forgave half of the original $2.6 million loan under a prior St. Joe’s rescue plan in 2010, and paying off the remainder had been a sticking point in negotiating the current agreement.
Lorain City Council approved the deal earlier this week and also agreed to spend $120,000 of $360,000 that Mercy Regional Medical Center has agreed to contribute to redeveloping the facility’s operations. The money from Mercy is supposed to serve as a local match for a $1.6 million state grant.
Rangel said only $120,000 of the money Mercy pledged to the project would go toward operations; the rest will go into the demolition and renovation costs associated with redeveloping the facility.
Commissioner Lori Kokoski said she supports using part of the Mercy funds to keep St. Joe’s operating.
“This $120,000 from Mercy is the life support for St. Joe’s,” she said.
But Williams questioned whether the city could actually agree to that given what the money was intended for. Rangel said using the money for operations was legal and necessary.
Without additional operating capital, Rangel warned the center could close within the next 60 to 90 days and complicate efforts to bring in an outside developer. The city and county had each discussed kicking in up to $200,000 each to cover operational costs at St. Joe’s, but nothing of the sort has ever been formally adopted.
Williams also suggested that half of the Mercy money should be given to the county to help pay down the $425,000 the county will pay toward the loan.
Lorain Mayor Chase Ritenauer, who wasn’t at the meeting, said all of the funds contributed by Mercy should go into St. Joe’s and not to paying down the county’s debt, which the commissioners tentatively plan to roll into a loan along with improvements for several county buildings.
“You know, for someone who doesn’t like bailouts, it’s kind of ironic (Williams) wants the city to pay off the county’s obligations,” Ritenauer said.
The commissioners delayed voting on how to spend Mercy’s contribution until next week.
Contact Brad Dicken at 329-7147 or firstname.lastname@example.org.