Wednesday, October 7, 2009

Timeline of ODOT vs Fred Finley

A Chronology for the Ohio Department of Transportation in its Dealings and Handling of Acquisition of the Cleveland Cold Storage Property, Owned by Fred Finley

  • Mr. Fred Finley was President of Cleveland Cold Storage (“CCS”) from 1981 to 1992 when he purchased the business and building from Richard Gerrity, the prior owner.
  • CCS served as a 480,000 square-foot refrigerated warehouse for storage of food products.
  • On October 22, 1992, Mr. Finley titled the warehouse by Warranty Deed in the name of CCS (“CCS property”). The CCS property bears the address of 2000 West 14th Street, Cleveland, Cuyahoga County, Ohio
  • Beautiful Signage, Inc., is an Ohio for-profit corporation that has a contract with CCS for lease and use of signage space on the expansive exterior walls of the CCS property and that also has an interest in the CCS property due to a lien. The advertising signage on the CCS property is reported to be among the largest such displays in the United States.
  • Mr. Finley was a 50% partner in Beautiful Signage from 1995 until 2002.
  • The Ohio Department of Transportation (“ODOT”) functions as an administrative governmental agency of the State of Ohio charged with providing and maintaining a transportation system that links Ohio to a global economy.
  • On March 13, 2003, ODOT held a scoping committee meeting for study of the Cleveland Innerbelt Plan (“CIP”). As part of the study, ODOT issued a list of properties potentially impacted for the central viaduct northern alignment of the CIP. ODOT’s list of properties within the planned right-of-way of the CIP did not include the CCS property.
  • In the spring of 2002, Mr. Finley and CCS lost the business of their biggest food storage client, Nestle Foods.
  • With the loss of CCS’s business with Nestle Foods, Mr. Finley began to explore options for redevelopment of the CCS property and site, which he closed in early 2003.
  • On June 3, 2003, Mr. Finley and CCS hired the architectural firm of Johnson & Lee, Ltd. (“J&L”), to conceptualize and prepare a design for optimum redevelopment of the CCS property.
  • J&L offered a design for renovation of the CCS property that would replicate a project in Chicago (“Dearborn Tower”) of a virtually identical structure.
  • J&L recommended retrofitting the CCS property into a high-end residential condominium structure with commercial and retail usage on the lower floors of the redesigned building (“J& L redevelopment plan”).
  • On August 17, 2003, based on the J&L redevelopment plan, Mr. Finley engaged Telesis Corporation (“Telesis”) to assess the proposed redevelopment of the CCS property.
  • Shortly thereafter, Mr. Finley and Telesis concluded that the J&L redevelopment plan was financially viable, assuming that proper rezoning of the CCS property occurred in order to accommodate execution of the plan.
  • On June 29, 2004, upon receiving information on the evolving CIP, Mr. Finley corresponded with ODOT and Cleveland Mayor Jane Campbell (“Mayor Campbell”) that Mr. Finley had engaged in negotiations with officials of the City of Cleveland for conversion of the CCS property from industrial use to a combination of commercial, retail, and residential uses and asked for ODOT’s confirmation that ODOT would not seek to acquire the CCS property in an eminent domain action.
  • On July 8, 2004, Mr. Finley received a letter from Mayor Campbell which expressed support for conversion of the building on the CCS property as Mr. Finley proposed.
  • In a letter dated July 12, 2004, ODOT expressly and clearly informed Mr. Finley that the CCS property would not be a required acquisition for the CIP.
  • On August 6, 2004, the Cleveland City Planning Commission rezoned the geographic area where the CCS property is located from an industrial district to a general retail business use district.
  • In a general retail business use district” in the City of Cleveland, all residential uses are permitted, including single-family, two-family, and multi-family, as well as retail uses.
  • In reliance on ODOT’s July 12, 2004, correspondence, consistent with the J&L redevelopment plan, and Telesis favorable economic analysis of the plan, Mr. Finley continued with a fully committed investment of his personal money, his credit, and time for redevelopment of the CCS property into a mixed-use building for commercial and retail occupants on the ground level, high-end residential condominiums on floors above the commercial level, and underground parking.
  • On August 4, 2005, purportedly responding to Mr. Finley’s June 29, 2004, correspondence, ODOT stated that based upon the redesigned alignment of the westbound bridge for the CIP and I-90, ODOT would now require acquisition of the CCS property.
  • Based on ODOT’s notification of its reversal of position on acquisition of the CCS property for the CIP, Mr. Finley notified J&L, Telesis, and Altair that the J&L redevelopment plan was no longer feasible and that all activity on the plan should cease.
  • In its August 4, 2005, letter, ODOT advised that it anticipated initiation of right-of-way acquisition to commence in 2007 and invited Mr. Finley to demonstrate hardship for ODOT’s advanced acquisition of the CCS property.
  • On August 24, 2005, CCS’s business attorney, Kevin R. Keogh of Cleveland, submitted a request for hardship acquisition to ODOT with regard to the CCS property.
  • To date, ODOT has not proceeded with a hardship purchase of the CCS property.
  • Consistent with the redesigned CIP, ODOT proceeded to acquire real properties that abut the CCS property by negotiated purchase.
  • On August 27, 2005, due to economic hardship as a result of ODOT’s revised determination that acquisition of the CCS property was necessary and ODOT’s failure to engage in good-faith efforts to acquire the CCS property, Mr. Finley filed Chapter 11 bankruptcy for CCS in the United States Bankruptcy Court, Northern District of Ohio, Case No. 05-22097; and this Chapter 11 filing was subsequently converted to Chapter 7 (“CCS bankruptcy”).
  • On October 20, 2005, ODOT performed an appraisal of the CCS property which placed the fair market value of the property at $1,900,000 (“ODOT appraisal”). This appraisal did not consider highest or best use based on the re-zoning of the CCS property.
  • On December 28, 2005, ODOT made an offer to the Trustee of the CCS bankruptcy to purchase the CCS property, free and clear of all liens, claims, and encumbrances, for the price of $1,900,000.
  • On October 29, 2006, on behalf of Mr. Finley, The Robert Weiler Company (“Weiler Co.”) completed and published an appraisal of the CCS property based on the J&L redevelopment plan that was initiated prior to ODOT’s notice of its intended acquisition of the CCS property; and the Weiler Co. appraised a fair market value of the CCS property at its highest and best use between $4,425,000 and $4,450,000 (“Weiler Co. original appraisal”).
  • Mr. Finley immediately provided copies of the Weiler Co. original appraisal to the CCS bankruptcy trustee and to ODOT.
  • On November 21, 2006, the CCS bankruptcy trustee determined that sale of the CCS property was not feasible and discharged and closed the CCS bankruptcy case.
  • Upon closure of the CCS bankruptcy case, Mr. Finley’s company, CCS, was restored to ownership of the CCS property.
  • Since August 4, 2005, the date that ODOT confirmed its intention to acquire the CCS property, and due to ODOT’s ongoing failure to acquire the CCS property by negotiation or by eminent domain court proceedings, Mr. Finley has been unable to use the CCS property for any gainful purpose, has been unable to redevelop the CCS property as planned, has been unable to sell the CCS property for a reasonable value, and has been unable to recoup his personal investment from any source, even though numerous other surrounding properties have been acquired.
  • Due to the paralysis imposed on his business affairs by ODOT, Mr. Finley has been left financially devastated.
  • ODOT is well aware of the predicament in which Mr. Finley finds himself. In a letter dated ___________, 2006, ODOT Director Gordon Proctor (“Director Proctor”), who served by appointment during the administration of former Ohio Governor Robert Taft, wrote to Mr. Finley. In his letter, Director Proctor apologized for the protracted delay in ODOT’s acquisition of the CCS property, and Director Proctor actually invited Mr. Finley to file suit against ODOT.
  • In a lawsuit filed on June 6, 2007, with the Franklin County Court of Common Pleas, Mr. Finley sought a court order to compel ODOT and its current Director, James G. Beasley (“Director Beasley”), to acquire the CCS property for its fair market value based on its highest and best use by ODOT’s filing of a Complaint for eminent domain with the Court of Common Pleas of Cuyahoga County, Ohio (“mandamus case”).
  • Rather than concede that ODOT had any obligation, legal or moral, to proceed to acquire the CCS property, ODOT vigorously pursued dismissal of the mandamus case. Based on ODOT’s motion, Mr. Finley’s mandamus case failed. In decisions that sustained ODOT’s motion to dismiss, the trial court and the Franklin County Court of Appeals declined to modify Ohio’s judicial precedent that a court could only issue a writ of mandamus case against a governmental agency if the private land owner could establish that interference with ownership of the property occurred by the governmental agency’s physical intrusion or physical interference with the property. Obviously, since ODOT has not begun construction or site activity on the CIP, ODOT has no current physical presence that has impacted on Mr. Finley’s use of the CCS property. The Ohio Supreme Court declined to accept further appeal of Mr. Finley’s attempt to secure a revised precedent of Ohio law that would authorize the requested writ of mandamus against ODOT.
  • For over three years since ODOT determined that the CCS property fell within the CIP, through counsel, Mr. Finley has repeatedly requested that ODOT either negotiate with Mr. Finley for acquisition of the CCS property or file its eminent domain case.
  • On July 29, 2008, in a meeting with Mr. Finley, his counsel, ODOT Chief of Staff Steve Campbell, ODOT Chief Legal Counsel Cathy Cola Perkins, and counsel for Beautiful Signage, ODOT made its first offer to Mr. Finley to acquire his property – for $1.9 million.
  • In making this offer to Mr. Finley, ODOT obviously singularly relied on ODOT’s appraisal of October 20, 2005.
  • Through counsel, Mr. Finley pointed out to ODOT that the ODOT appraisal was fundamentally flawed since the appraiser failed to consider the combination of the rezoning of the CCS property and the viable J&L redevelopment plan. Mr. Finley’s counsel requested that ODOT secure an updated appraisal of the CCS property that would consider its highest and best use.
  • At the July 29, 2008, meeting, through counsel, Mr. Finley requested that ODOT agree to participate in mediation to attempt to resolve this matter by a settlement on an expeditious basis. In order to proceed with mediation, Mr. Finley requested that ODOT complete all activities that would meet administrative requirements for ODOT’s acquisition of the CCS property. ODOT agreed to participate in such a proposed mediation -- with ODOT’s express contingencies. First, ODOT demanded access to the CCS property in order to conduct its environmental assessment. This was ODOT’s first such request for access to perform an environmental assessment of the CCS property. Mr. Finley immediately agreed. He accommodated such access, which only occurred on November 3 and 4, 2008. Second, ODOT demanded that Mr. Finley secure the cooperative participation of Beautiful Signage in the mediation. Although Mr. Finley has no control over Beautiful Signage, through Mr. Finley’s counsel, he has endeavored to secure such cooperation. Counsel for Beautiful Signage has given verbal assurance to counsel for Mr. Finley that Beautiful Signage will not impede any mediation effort with ODOT.
  • As offered by Mr. Finley and accepted by ODOT, in anticipation of mediation, Mr. Finley secured an updated appraisal from the Weiler Company. The updated appraisal of the Weiler Company dated August 19, 2008, placed the current fair market value of the CCS property at $4.4 million based on its highest and best use. Counsel for Mr. Finley immediately provided ODOT with a complete copy of the updated appraisal of the CCS property as prepared by the Weiler Co.
  • On November 3, 2008, Mr. Finley and his counsel first learned that ODOT re-engaged Dean T. Smith (“Mr. Smith”) of Cleveland, the same appraiser who prepared the fundamentally flawed appraisal of October 20, 2005, to obtain ODOT’s updated appraisal of the CCS property. Mr. Smith revisited and examined the CCS property on November 4, 2008. On November 30, 2007, Director Beasley had offered Mr. Finley the right to select a “third appraiser” from a list of four appraisers to conduct another appraisal of the CCS property for ODOT; however, on the advice of counsel, Mr. Finley declined and encouraged ODOT to make its own choice of its new appraiser. On January 11, 2008, Marty Gelfand, Legal Counsel to U. S. Congressman Dennis Kucinich, secured a verbal commitment from John Haseley, Chief of Staff to Governor Ted Strickland, that ODOT would secure a new appraiser to assess the fair market value of the CCS property. In the July 29, 2008, meeting with Mr. Campbell, Ms. Perkins, and other representatives of ODOT, Mr. Finley’s counsel explained that Mr. Finley and his counsel could not trust the ongoing involvement of Mr. Smith as ODOT’s appraiser if ODOT intended to participate in the mediation in good-faith. In view of this history and the commitment by the Governor’s office, Mr. Finley and his counsel were dismayed that ODOT re-engaged Mr. Smith for the updated appraisal of the CCS property.
  • In a communication from ODOT sent to Mr. Finley’s counsel on December 23, 2008, ODOT continues to claim that it can not acquire the CCS property from Mr. Finley because of the following: (1) right-of-way plans for the CIP are not finalized, (2) the “environmental document” has not been finalized, (3) an Environmental Site Assessment has not been completed, and (4) federal funding for acquisition has not been authorized.
  • Yet, through negotiation with other land owners in the reported right-of-way for the CIP, ODOT has acquired 10 properties from other land owners, and ODOT has compensated these land owners.
  • Only the CCS property and one other property remain unacquired by ODOT in the reported right-of-way for the CIP.
  • In 2007, ODOT paid $4.1 million dollars for the warehouse property owned by Meridian Properties, formerly doing business as Independent Tile Co. The Independent Tile property was not listed within the reported right-of-way for the CIP. Rumors suggest that ODOT acquired the Independent Tile property as a political favor to the owner. This building has a serious asbestos condition that is currently being remediated. ODOT has not responded to requests as to who conducted any environmental studies.
  • Over the last few weeks, U. S. Congresswoman Marcia Fudge has made repeated attempts to intervene with the Governor’s office on behalf of Mr. Finley in this matter. She reports that the Governor and his staff have not returned her calls.
  • Mr. Finley is the only African-American owner of any of the properties in the reported right-of-way for the CIP.

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