The Sonshine Building and adjacent Manchester Inn hotel will be the subject of mediation in Butler County Common Pleas Court between the city of Middletown and Illinois developer William Grau over ownership of the buildings. City officials claim that Grau did not complete the renovations as required in a 2014 development agreement and that the ownership of the properties should be reverted back to the city. If the mediation is not successful by Feb. 28 the case will go back to court for litigation. FILE PHOTO

Middletown, developer to enter mediation in dispute over buildings the city sold for $1

In an agreed entry filed Feb. 7, Butler County Common Pleas Judge Michael Oster ordered developer William Grau and the city of Middletown to enter mediation through the court’s administrative office. In that entry, both parties agree to conduct the mediation by Feb. 28.

If the mediation effort is unsuccessful, both parties are to notify the court and a new date will be scheduled for a preliminary injunction hearing.

“Mediation will be scheduled depending on the availability of mediators, but the parties are working to get that accomplished prior to Feb. 28,” said Susan Cohen, city administrative services director.

No mediation sessions had been scheduled as of Monday afternoon, Cohen said.

MORE: Middletown’s fight to reclaim a historic downtown property continues with coming hearing

In December, city officials started the action to reacquire the Manchester Hotel and Sonshine/Snider Ford buildings after claiming that Grau had not met the development agreement requirements for the buildings.

The city sold the buildings to Illinois-based William Grau of Historic Urban Development in May 2014 for $1. It claims Grau has failed to make enough progress toward redeveloping the buildings.

Grau said he was going to invest about $10 million to redevelop the Manchester as a boutique hotel and the Snider Ford building into a microbrew and pub.

MORE: Middletown could once again own the former Manchester Inn — which they sold 4 years ago for $1

The improvements to the Manchester Hotel were to be completed by Nov. 15, 2016, and the Snider Building was to be brought in compliance with applicable state and local building, zoning, and building maintenance codes within 24 months of closing, according to a letter the city sent Grau in October. As of Oct. 4, neither deadline has been met, according to the city’s letter. In that letter, the city gave Grau 60 days to complete the contract obligations and was told to have all personal property removed from the 96-year-old building by Dec. 4.

In his Dec. 18 complaint, Taylor Trout, Grau’s attorney, claimed interior demolition work commenced on June 20, 2018, and the timeline for completion had been extended.

MORE: Developer: Middletown brewery, hotel on hold

Oster issued a temporary restraining order on Jan. 3 pending court hearings that have since been continued. As part of the temporary restraining order, Grau was to obtain general liability insurance for the properties and install secure fencing that previously existed around the Snider Building. Last month, Cohen said no one was supposed to enter the building and there were to be no alterations of any kind and no encumbrances on the buildings until the matter has been fully litigated.

Trout said Grau did not want to initiate legal action and said his interests remains aligned with the city and is committed to success redevelopment of the property. He said Grau intends to move forward in developing the project consistent with the original proposal approved by the city.

Grau could not be reached for comment for this story.

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