Records: Middletown could pay Manchester Inn owner $161K settlement to regain ownership

If the emergency legislation is approved, the city will pay owner William Grau $161,824.60 that constitutes reimbursement of expenses for his eight years of ownership of the buildings, according to city documents.

The Manchester shut down in 2011 after years of financial problems. At the time, it was thought the hotel would host an expansion of Cincinnati State Technical and Community College’s hospitality program and culinary school, but that never happened.

In 2014, Grau’s company purchased each building for $1 from the city as part of a redevelopment deal. 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.

Earlier this week, city employees were seen inspecting the 99-year-old Manchester Inn after roof tiles fell onto the sidewalk and road.

Grau agreed to develop the buildings into a hotel and brewery/distillery and restaurant. The development agreement called for the project to be completed within two years, by late 2016. When no development was visible by October 2018, the city notified Grau of its intent to exercise a clause in the development agreement to take back the buildings under the legal action of reversion.

Two months later, Grau filed legal action against the city to maintain ownership of the buildings and the issue has been in the court system ever since.

Then last month, Oster Jr. found there were no material issues of fact in the case and the city was granted ownership of the buildings.

The city and Grau negotiated a settlement, the city said. These expenses “broadly constitute” work done to the buildings, studies done regarding the feasibility of development, applications and professional services regarding the tax credits needed for development, tax payments, insurance, utilities and security measures for the buildings, the city said.

If the city had owned the buildings for the last eight years, it would have incurred costs to maintain, secure and market them, according to a staff report.

City staff is recommending the settlement agreement as proposed after a review of all expenses requested, saying the “reasonable settlement amount” limits the additional monies that will be spent on attorney fees and potential for the court to order a higher settlement amount.

FAMOUS PEOPLE WHO HAVE VISITED THE MANCHESTER INN

SOURCE: Journal-New archives