Questions on new councilwoman’s business finances prompts ethics review

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Questions on new councilwoman’s business finances prompts ethics review

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Some community members, including an outgoing Middletown councilwoman, have been questioning a tax abatement received more than a year ago and a business reinvestment loan that closed on Tuesday for the Torchlight Pass building, 1131 Central Ave. to a newly elected councilwoman in the city. STAFF FILE

Some community members, including an outgoing Middletown councilwoman, have been questioning a tax abatement received more than a year ago and a business reinvestment loan that closed on Tuesday to a newly elected councilwoman in the city.

While Vice Mayor Dora Bronston said it was a fair election, she has questioned the ethics of a year-old Community Reinvestment Area tax abatement and the business loan to owner Ami Vitori now that Vitori was elected to Middletown City Council last month.

Vitori was the leading vote-getter for two open seats. Bronston finished third in the five-way field and said she is planning to run for council in 2019 when there will be three open seats, including the mayor’s seat.

Bronston said City Council members shouldn’t profit off their city positions. She said that in 2016, Vitori received a 100 percent, 12-year Community Reinvestment Area tax abatement for the Torchlight Pass building, 1131 Central Ave., before she considered running for a City Council seat. According to the council minutes, Bronston voted for the resolution to grant the CRA tax abatement on Oct. 4, 2016.

At the Dec. 5 meeting, two residents raised the issue with City Council, saying no public money should go to an elected official or their business. Later in the same meeting, Bronston raised a concern about “co-mingling of funds” and with incoming council members owing money to people.

Bronston told this news outlet that she “was being transparent as possible” for the people that raised the questions at the that meeting.

“Because of the concerns of residents, I wanted clarification and I contacted the Ohio Ethics Commission,” Bronston said. “They don’t get involved until they are seated on council, then they can step in and monitor. I have no personal issue with Ami.”

Vitori said she “was very surprised.”

“This has been in the works for over a year and it’s all been very public,” Vitori said. “I was surprised this became an issue at this point.”

Before Vitori ran, she said city officials recommended she have these matters reviewed by her attorneys. Vitori said her attorneys saw no conflicts of interest or ethics conflicts because she was not a council member at that time and they also recommended getting a legal opinion.

That prompted city Law Director Les Landen to contact the Ohio Ethics Commission and follow up with a legal opinion issued on Nov. 28. Landen’s legal opinion said that there are no ethics violations concerning the tax abatement.

On Tuesday, Vitori closed on the $80,000 business reinvestment loan from Middletown Moving Forward, the city’s nonprofit community improvement corporation. Had the loan not closed before Dec. 31, it could have been an ethics issue for Vitori.

“Middletown Moving Forward continued with its year-long due diligence in reviewing a potential reinvestment into the Torchlight Pass property,” said MMF Executive Director Calista Smith. “Based on a review of our internal reinvestment protocols and opinions from the City law office and Ohio Ethics Commission, the Board of Trustees reaffirmed the continued processing of the loan for Torchlight Pass and authorized the signature of loan documents as long as the loan is executed by December 31, 2017.”

Timeline for Torchlight Pass tax abatement and Middletown Moving Forward Reinvestment Loan

July 19, 2016: Ami Vitori, owner of Torchlight Pass, applies for a 12-year, 100 percent Community Reinvestment Area tax abatement from the City of Middletown.

Oct. 4, 2016: Middletown City Council, including Vice Mayor Dora Bronston, unanimously approves the CRA tax abatement.

September 2016: Vitori meets with MMF Executive Director Calista Smith to discuss a possible low interest reinvestment loan for the project.

January 2017: Vitori submits a letter of interest and application for a $50,000 to $80,000 loan. The project meets MMF’s basic criteria, and the application started the underwriting and evaluation process. Bronston, an MMF board member, was at that meeting.

Aug. 9, 2017: MMF board informed that a new appraisal for Torchlight Pass had been sent to the Cincinnati Development Fund for review for an $80,000 loan. The loan would be for the exterior and for HVAC equipment for the nearly 40,000 square-foot building. The loan interest would be at 5 percent amortized for 10 years.

September 2017: Vitori received a loan offer from MMF. According to the Sept. 13 meeting minutes, Bronston seconded the motion to approve the loan.

October 2017: Torchlight Pass submitted its application fee and completed the vetting process of the program reinvestment and evaluation committee, according to the meeting minutes. A resolution to allow Board President Ken Cohen to sign and execute loan documents related to Torchlight Pass was circulated and reviewed. Mayor Larry Mulligan made a motion to accept the resolution, Bronston seconded the motion, and the motion carried.

Nov. 7, 2017: Vitori is elected to an at-large seat on Middletown City Council. Bronston finishes third in a five-way race for two seats. She said she will run again for a council seat in 2019.

Nov. 28, 2017: City Law Director Les Landen issues legal opinion after consulting with the Ohio Ethics Commission that determines that Vitori has no legal or ethical conflicts with the tax abatement nor would there be any conflicts if the pending MMF loan is closed by Dec. 31, 2017.

Nov. 29, 2017: Bronston informs council members that she would not attend the Dec. 5 dinner for outgoing council members at Gracie’s, which Vitori is a business partner, “due to the impending issues with a person seated on city council and has open contracts in business with the city.”

Dec. 12, 2017: Vitori and fellow Councilman-elect Joe Mulligan take their oaths of office as required by the city charter but are not seated until Jan. 1, 2018.

Dec. 19, 2017: The closing was completed for Vitori’s loan was closed.

SOURCES: Middletown City Council minutes; Middletown Moving Forward board meeting minutes.

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