Judge dismisses lawsuit against Akron, Fairlawn
By Kathleen Collins
DOWNTOWN AKRON — Summit County Common Pleas Judge Marvin Shapiro dismissed a lawsuit March 31 against the cities of Akron and Fairlawn that alleged Akron misused revenue generated from the Bath-Akron-Fairlawn Joint Economic Development District (JEDD) agreement.
The lawsuit, filed by Bath Township developer John Dellagnese III more than a year ago, alleged that Akron used the $27 million earned from the JEDD (from 2001 to 2003) and developed properties outside of the JEDD’s borders and within the city of Akron. Dellagnese also contended the city enticed businesses to move out of the JEDD area and into Akron by offering real and personal property tax rebates. As a result, Dellagnese, who owns commercial real estate located in the Bath-Akron-Fairlawn JEDD, contended he was discriminated against in favor of Akron businesses. He also stated that Bath commercial property owners lost leases and sales of property, and Akron’s conduct has discouraged construction of business properties in Bath, thus resulting in a loss of tax revenue for the township.
The lawsuit further stated
that the purpose of the JEDD was “to assure the
continued economic viability of Bath Township by preserving
its tax base and its unique rural-like open space residential
character, while preserving employment opportunities
and improving the economic welfare of the people in
the region.”
According to Akron Law Director
Max Rothal, the Bath-Akron-Fairlawn JEDD is a 99-year
agreement that was formed in 1998. Its intent is to
protect townships from annexation, while at the same
time provide cities with additional revenue. Up until
January of this year, under the Akron-Bath-Fairlawn
JEDD, people who worked in the JEDD area — which
is located in Bath Township — were paying a 2
percent income tax to Akron. That money was split equally
between Akron and Fairlawn. At the beginning of this
year, the 2 percent was increased to 2.25 percent, and
that money will be split among Akron, Bath and Fairlawn.
Under Ohio law, Bath, as a township,
is not able to collect income tax from people who work
in Bath. As part of the JEDD, in return for the income
tax dollars, Akron extended sewer and water lines to
businesses in the JEDD area. Akron and Fairlawn
also have agreed to not to annex
Bath property.
Dellagnese had filed the lawsuit
as an individual and as a taxpayer of Bath. In Shapiro’s
decision, Dellagnese’s claim was dismissed because
he is not an Akron or Fairlawn taxpayer and he does
not have “any recognizable property interests
(such as a leasehold) in either municipality.”
Shapiro also dismissed his claim
because Dellagnese is not a party to the JEDD contract.
Shapiro also stated in his decision that the statute
of limitations expired for any action to be brought
against the JEDD contract. He said the Ohio Revised
Code states any action should have been brought about
within the first year of the contract.
Dellagnese, who did not respond
to requests for comment by press time, had stated when
he initially filed the lawsuit that he was “arguing
how tax dollars are being used.”
“Akron is using JEDD funds
to entice companies to move out of the JEDD area,”
he said in a February 2005 interview. “That was
never the intention of the JEDD.”
Rothal said throughout the more
than yearlong lawsuit, Dellagnese had filed several
amended complaints to the lawsuit, further
complicating the case.
“This has been a continuous
form of harassment,” said Rothal. “This
case has no merit and shouldn’t have been brought
[to court] in the first place. We’re considering
our legal right [to seek compensation] for the amount
of time and money the city spent on this lawsuit.”
Dellagnese has 30 days from the
date of Shapiro’s decision to file an appeal with
the Ninth District Court of Appeals, said Rothal.
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