LEDC ratifies contract with Superior, future unclear

Published 12:00 am Tuesday, September 28, 2004

SOUTH POINT - Despite legal posturing and a lingering uncertainty of its next step, the county's economic engine took a step Monday toward ending a more than two-year-old contract dispute.

In a special meeting mandated by a county court's settlement order, the Lawrence Economic Development Corporation met to consider a disputed contract between the LEDC and Superior Marine Ways, a South Point river barge company.

On Monday, the LEDC board voted to ratify the 2001 contract with three board members voting not to ratify. The 20-year contract, divided into four, five-year periods, requires Superior to pay the LEDC $90,000 per year for the estimated 3,300 feet of riverfront in The Point industrial park.

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Superior competitor McGinnis Inc. sued the LEDC and its then director Pat Clonch in August 2002. McGinnis alleging the LEDC negotiated and signed a contract with Superior while also engaged in negotiations with McGinnis without the full board's approval and behind closed doors.

A settlement agreement was reached last month.

"It's always been LEDC's contention that we've always had open meetings," said Tom Klein, LEDC's counsel. "LEDC decided it was better to move out of the litigation phase and move into development of the riverfront."

LEDC executive director Bill said he was happy the dispute was nearing an end.

"I appreciate all people concerned," Dingus said. "We all have too many obstacles ahead to spend time with this kind of disagreement."

Much of the meeting was filled with posturing from all three sides: McGinnis, Superior and the LEDC.

Kurt Anderson, co-counsel for LEDC, told board members the original contract was simple and binding.

"There really is little to discuss," Anderson said. "It's a standard lease."

Dale Manns, owner of Superior, said his company has paid approximately $325,000 to the LEDC to date.

"That's a considerable amount of money, especially considering he (Manns) really hasn't been able to use the property," Anderson said.

McGinnis attorney Jeff Miller of Cincinnati disputes the fact that Superior has been unable to use the property.

"Don't cry for them," he said. "They've made more money, we believe, than they have invested."

"Contrary to what they said, we haven't made any profit on The Point," said Richard Meyers, attorney for Superior.

If the board had failed to ratify the lease on Monday, Klein said, Superior would likely sue the LEDC for breaking the original agreement.

"We do not want to subject LEDC from potential litigation from Superior," he said.

McGinnis' attorney, Miller, conceded the threat of litigation was likely.

"If you reject this lease, I'm quite sure Superior would sue you," Miller said. "We would love to tell you 'don't ratify the lease.' But we understand your concern. If you do ratify the lease, put the next five-year term up for bid.

"We think the public would have more confidence in what the LEDC is doing if they made that commitment," Miller said, adding that he understood community improvement corporations such as the LEDC do not have to operate as a government agency would. "There are no requirements under Ohio law that says you have to go out and take public bids. But you ought to do that."

Meyers said Superior disagrees with that notion and that if the LEDC agrees to hear other proposals before the first five-year period of the contract is complete, that the value of the contract diminishes significantly.

"It is not our opinion that it is open to proposals from anybody," Meyers said. "I'm not a contract lawyer. I'm a trial lawyer, if that gives you any idea where we might be going."

Judge Fred W. Crow III in his settlement order seemed fairly clear, however.

In referring to the need for the LEDC board to meet on renegotiating terms of the lease, Crow wrote:

"This meeting will be open to the public Š The LEDC shall notify the public, the press and McGinnis of this meeting in advance.

"At the meeting, McGinnis and anyone else from the general public will be permitted to make presentations regarding the lease agreement and/or alternate proposals for the riverfront of The Point."

It was unclear Monday when that meeting would take place, but McGinnis' attorney said they plan to make an alternate proposal at that time.

"The big loser is the county and The Point when we have these legal matters," said Lawrence County Commissioner Doug Malone, who by way of his office fills a position on the LEDC board.