Middletown business won’t be penalized for delays

Some construction work at Liberty Spirits stalled by city government.

City Council, frustrated by delays a micro-distillery had meeting contractually required deadlines, voted to penalize the company $100 per month starting Jan. 1.

Initially, the emergency legislation proposed by City Manager Doug Adkins failed on Tuesday. But after the company’s owner pointed out the city had been the cause of the delays, council reconsidered and approved the legislation as an emergency measure, rather than letting the development agreement lapse.

Mike Robinette, the owner of Liberty Spirits LLC, pointed out some of the slowness in meeting those timelines was prompted by a lag by Middletown’s city administration in providing the company a deed.

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That delay stalled the company's work on the property at 1316 Vail Ave., which Liberty Spirits bought from the city for $1 amid controversy about the price and tax abatements, although Robinette said he did do work on the roof while awaiting the deed.

Upon hearing city government had hindered progress on the work, council members reversed themselves.

Adkins initially recommended the council penalize Liberty Spirits for failing to have the building on Vail ready for operations by Dec. 31, as had been specified under an agreement with city government.

Adkins, who early this year had been a strong proponent of the sale and abatement despite concerns of some on the council, noted the building has been gutted, has a new roof, new windows and a garage door, “but no way is it anywhere near to be ready by Dec. 31.”

As was allowed under the contract, Liberty Spirits has sought a deadline extension to April 15. The company now expects to be open by mid-March.

Adkins recommended that in exchange for granting the extension, the city penalize Liberty Spirits at a rate of $100 per month, starting Jan. 1, from a $1,000 deposit the company made, with the remainder of the deposit defaulted if the building isn’t open by April 15.

Mayor Larry Mulligan Jr. noted that while Liberty Spirits failed to meet the deadline, it’s important to be equitable and treat businesses equitably. Officials noted other businesses also haven’t met their development-agreement deadlines.

Mulligan said he thought $100 per month was reasonable.

Council Member Steve Bohannon disagreed: “I think he should lose his $1,000,” he said, with perhaps additional monthly penalties of $100 or $250.

Vice Mayor Dora Bronston thought Robinette should be penalized either $250 per month from the deposit or the entire $1,000.

Adkins and Mulligan suggested Liberty Spirits, facing penalties, could say, “nevermind” to the project.

“I think this brings a good point, in the fact that we shouldn’t be owning real estate in the city, because this puts us in a heck of a bind every time this comes about, so we can help other people out,” Bohannon said. “We write contracts that we sat down and agreed upon, for this contract to be written, and it seems to me like it doesn’t mean anything….”

Adkins responded that if the business opens 60 days late, the city nevertheless will have a new company operating.

Council Member Talbott Moon said he could agree with Bohannon’s and Bronston’s idea of taking $250 per month from the deposit.

Robinette said more than the money, he objected to the city singling him out when other companies have missed deadlines.

“I feel like I’m being singled out here, and I’ve invested a substantial amount of money in this project downtown,” he said. “So if the intent is to try to extract a pound of flesh out of me, you can do that. But if you want to get down to the nit-picky aspects of the contract, which you seem to be interested in doing, Mr. Bohannon, the contract says we would have had deed to the property by April 30. We didn’t get the deed until May 27” He later clarified the date was May 26.

The city took weeks longer than promised to make the deed transfer happen under the early March agreement, Robinette said: “The city hasn’t abided by the contract, in terms of when we were supposed to get control of the project.”

Council voted 3-2 to penalize Liberty Spirits $100 per month, with Bohannon and Bronston voting no.

Bronston later voiced concern that the matter was a late addition to the council's agenda as an emergency measure, leaving her to feel on the spot. Because the legislation was an emergency matter, requiring at least 4-1 approval, it failed to win approval with the first vote.

Council Member Daniel Picard later offered to personally pay $1,000 on Liberty Spirits’ behalf.

“I’ll invest my $1,000 in Liberty Spirits to move it forward,” he said.

Robinette again told council the deed wasn’t delivered until May 26, and Bohannon announced he would change his vote because of the delay.

Council then voted 5-0 to approve the legislation, penalizing the company $100 per month.

“I apologize to council for the confusion,” Adkins said after the vote.

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