Ownership dispute over Middletown’s Manchester Hotel won’t go to trial this week

A bench trial scheduled this week in Butler County Common Pleas Court has been vacated. City officials said the parties are awaiting rulings on pre-trial motions before the trial can move forward. The building has been vacant for years as the city of Middletown wants to  reacquire the Manchester Inn and Sonshine Buildings through a default/reverter clause in the development agreement. FILE PHOTO
A bench trial scheduled this week in Butler County Common Pleas Court has been vacated. City officials said the parties are awaiting rulings on pre-trial motions before the trial can move forward. The building has been vacant for years as the city of Middletown wants to reacquire the Manchester Inn and Sonshine Buildings through a default/reverter clause in the development agreement. FILE PHOTO

The bench trial that was scheduled to begin today to determine the ownership of two buildings in downtown Middletown was vacated in Butler County Common Pleas Court.

Susan Cohen, city administrative services director, said the court notified both parties last week about vacating the trial date.

“The parties are now awaiting rulings on pre-trial motions from the judge,” she said.

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Last month, both parties could not reach a settlement during a settlement conference between the city of Middletown and William Grau, the owner and developer of the Manchester Hotel and Snider Ford/Sonshine Building, which left a bench trial as the last option to settle ownership.

Grau’s company purchased each building for $1 as part of a redevelopment deal in 2014. Until December 2020, Grau was unsuccessful in receiving the state historic preservation tax credits in previous rounds. Both buildings have been vacant for several years and have been the target of break-ins and vandalism.

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The city claimed the project should had been completed and took action to try to regain ownership in October 2018. Grau filed suit in December 2018. The litigation put a hold on the project.

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Part of the dispute is about the city’s move to retake ownership with a clause in the deal if the project was not completed according to the mutually agreed to timeline.

The Manchester ownership is seeking declaratory judgment, breach of contract, slander of title, quiet title, and injunctive relief. Also in dispute is whether the city improperly exercised its right of the contract clause to retake ownership.

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In a counterclaim to the lawsuit, the city is also claiming damages of $811,541 in lost hotel and income tax revenue because the project did not move faster.

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City officials were not optimistic about progress after the December 2020 announcement of a $4 million state historic tax credit award to the project. The project had already received a $5.6 million federal historic preservation tax credit award, according to court documents.

The project cost was estimated at nearly $40.3 million, according to Ohio Development Services Agency information. Plans for both buildings include restoration to serve as a hotel again, and the Snider Ford Building would become a neighboring microbrewery and taproom.

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Built in 1922, the hotel had 91 rooms and suites, a restaurant, bar, and ballroom spaces.

The Manchester Hotel was added to the National Register of Historic Places in 2014.

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