More than a year after Lucas County filed a lawsuit attempting to claw back more than $1.8 million in federal funds from the developer that converted an abandoned Warehouse District building into apartments, the two sides await a judge’s ruling on a county motion for an immediate finding in its favor.
At the root of the matter is whether a private developer was subject to a county policy requiring everyone working under county contracts to be paid union scale.
Developer RKKP 2 admits not having done that but also disputes that it functioned as a county contractor when it redeveloped the former Commerce Paper Co. building at 15 S. Ontario St. as the Overmyer Lofts.
The county contends RKKP 2’s factual admission surrenders the case.
“There is no genuine issue of material fact and the county is entitled to judgment as a matter of law in this case,” lawyers representing the county Board of Commissioners wrote last month in a brief replying to developer RKKP 2 LLC’s response to a motion for partial summary judgment filed May 24.
That response from RKKP 2, a company belonging to Overmyer Lofts developer Kevin Prater, had argued that the company relied on a resolution the county commissioners adopted in late 2022 when it spent American Rescue Plan Act funds for construction costs rather than just “soft costs” related to planning and engineering.
No one is arguing that Mr. Prater spent the federal grant money, part of $83.2 million awarded to Lucas County in coronavirus-related economic aid, on something other than the project to create 75 residential units, including six to be reserved for tenants with incomes of 80 percent or less than the area’s median.
The lawsuit the county filed Aug. 8, 2023, rather contended that RKKP spent the ARPA money on project work that wasn’t allowed without an amendment to the agreement under which the commissioners granted the funds.
Through its lawyer, Randall Kleiman of East Lansing, Mich., RKKP argued in response that it acted in good faith based on the commissioners’ resolution, even though the county did not later sign off on a formal written amendment.
As passed, the resolution authorized county administrators “to sign all documents and take any steps necessary to execute” the amendment, while also saying the resolution “shall be in full force and effect from and immediately upon its adoption.”
Intervening between the resolution’s passage and further county action to sign formal documents was Lisa Sobecki’s succession of Gary Byers on the three-member county board, followed by a complaint by the Northwest Ohio Building Trades Council that some workers at the 15 S. Ontario St. job site were not being paid prevailing wage — otherwise known as union scale.
Dawn Christian, a lawyer representing the union coalition, said RKKP 2’s acceptance of the grant money obligated it to comply with a county policy that all workers on a project be paid the prevailing wage.
“The contractor openly admits that it did not pay the prevailing wage to all workers and violated the county’s policies,” she said Tuesday.
RKKP’s brief in response to the county motion counter-argued that RKKP 2 and its related Buildtech, Ltd. construction entity were not county contractors and were obligated to pay union wages only in proportion to the amount of ARPA funds spent on the project.
Even so, Mr. Kleiman wrote, “RKKP 2 did utilize union labor paid at prevailing wage rates for a majority of the work performed on the entire development.”
Mr. Kleiman’s response said the developer and Buildtech could not reach a Project Labor Agreement with the building trades council because the union was unwilling to discuss anything less than union scale for all workers, whether they were union members or not.
The Overmyer project’s total cost of about $37 million was also supported by a $4.1 million Historic Preservation Tax Credit from the Ohio Department of Development.
Ms. Christian did not respond to a follow-up inquiry about the dollar amount the building trades council believes its members lost because of RKKP 2 not paying prevailing wage to all Overmyer construction workers.
Mr. Kleiman and Denny Lyle, the Lucas County Prosecutor’s Office’s lead attorney for the lawsuit, also did not respond to requests for comment.
Pete Gerken, the county commissioners’ president, said Lucas County won’t lose any alternative use of the ARPA funds, should it prevail in court, because of how long the case is taking to litigate.
“Court cases take as long as the judge allows them to take,” Mr. Gerken said. “There is no risk of losing the money. We can reprogram that money elsewhere.”
The case is pending in Lucas County Common Pleas Court before Judge Dean Mandros.
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