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minutes - City of Lorain


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									                               PLANNING COMMISSION

                                                              DATE: February 2, 2011
                                                               TIME: 9:00 a.m.
                                                                PLACE: Council Chambers

Robert Gilchrist called meeting to order at 9:21 a.m. and asks Mr. Klinar to take

MEMBERS PRESENT: Ken Kramer, Dr. Ramirez, Mr. Gilchrist
ABSENT: Mrs. Wrice and Mayor Krasienko

Richard Klinar: Submission for Planning Commission approval of lot split at The Cottages of
Morningside. Held in abeyance from December 1, 2010 meeting. R-PUD Zoning. John
Evanson, applicant for Ontario Land Company.

Robert J. Gilchrist: Could you state your name and address for the record, please?

Tom Oster: Good Morning, Tom Oster, Ontario Land Company. 6150 Park Square Drive.,
Lorain, Ohio 44053. We’re here today to request a lot split at Morningside. We have a roughly
26-acre parcel and we’re trying to split off 14 acres and convey that to the homeowners. The
reason we’re doing this and I know John was here at the previous meeting but he wasn’t at
liberty to discuss things that have happened here recently but as you’re aware, Ontario Land
Company’s under a Chapter 11 reorganization and we had an auction scheduled for last week at
the request of Huntington Bank to auction off the remaining property of Morningside. What we
were attempting to do was split off the 14 acres, convey that free and clear to the homeowners
association because we had to conduct an auction and auction off the rest of the property. At the
auction K. Hovnanian Oster Homes which is an unrelated party to Ontario Land Company, was
the successful acquirer of all the lots and the remaining land out there. This is actually the
opportune time for us to do this, because Huntington Bank has agreed to release about 7 and half
million dollar mortgage on the property so we’re in a position that we can convey the property to
the homeowners free and clear. Like I said, it’s just a little over fourteen acres. The property
consists of a clubhouse, about $4 million dollars in amenities, the 13,200 square foot clubhouse,
indoor pool, outdoor pool, tennis court, bocce court, horseshoe pit, gazebo, boulevard, nine-hole
chipping and putting green, and some other amenities. We have homeowners here on behalf of
Morningside who would like to express their opinion for wanting to accept the property. Each of
the homeowners in Morningside does pay a $215 dollar monthly maintenance fee which is about
$2600 per year per homeowner. Currently there is about 125 homeowners living in the
community, so they are currently paying just under a quarter of a million and third of a million
dollars a year to support the lifestyle and the activities and the amenities that are out there. They
aren’t solely supporting it. K. Hovnanian Oster Homes has been contributing also because we’re
only 32% occupied and we need to be about 50% occupied for it to be self sufficient. Ontario
Land Company based on the issues we have, we need to dispose of the collateral and we got the
bank to agree to release it so it’s the opportune time to get a split and convey it to the
homeowners. I know John had mentioned at a previous meeting, there was some discussion
about other communities they don’t do it to the end and that’s the way that we generally do it,
and the reason that it’s generally done that way is because when a developer obtains financing,
the bank collateralizes everything so the developer is unable to convey those amenities until such
time as their development loan is paid off. In this case, we’re able to resolve that now and
convey that now, and convey that sooner than later so we’re requesting the split in order to do so.
We also need to do the split because based on the results of the auction, we do need to convey
the undeveloped land to a third party which in this case is K. Hovnanian Oster Homes, successful
bidder and we have to split their part out in order to convey that to them and then convey the
balance to the homeowners.

Robert J. Gilchrist: Thank you for that explanation. I do, just to refresh the Board’s memory,
last month, last meeting we had met and I believe there was a concern that there was no
representation from the homeowners association in addition to the explanation that you’ve just
given us. To assure this Board that that receiving of that property was something that that
homeowners association wanted, we could assume but there was no representation so I believe
that was one of the reasons it was held in abeyance to have some sort of representation, whether
it be documentation or whether it be someone from the homeowners association that’s over it to
express that to this Board. Is that something that could be done at this time?

Tom Oster: I assume that these gentlemen would like to come up and speak.

Robert J. Gilchrist: We would love to hear from them and think that was one of the reasons that
it was held in abeyance.

Richard Alvarez: I’m Richard Alvarez speaking for the homeowners of Morningside. We
understand that eventually we will be taking over this portion of the land and the Clubhouse is
part of our responsibility. I’m not sure that we’re quite ready to do that right now without some
assurances from Hovnanian and Oster, that they will continue to provide some subsidy for
amenities that Tom described.

Robert J. Gilchrist: Is that the only comment from the (inaudible)

Ken Kramer: Are these elected officers or they just homeowners in their association.

Unknown: We have an elected officer; he happens to be on vacation right now. He did ask me to
attend the meeting in his behalf.

Jon Haag: My name is John Hade, 4737 Meadowlark Drive, 44053. On the thing that we want
to be assured of, we’re fully behind this rule. This is a process that is taking place, we want to be
sure that when we do actually receive this property, it’s not encumbered and that we are getting
what we think we’re getting; normal things you do when you receive property, we take a look at
it. We have no thoughts that there’s any problems or anything, but there’s a lot of people that live
there and we want to be assured that this was a good situation for us. It’s what we wanted when
we bought there. We wanted to have this property that we’re talking about here is one of the big
things that we almost looked at when we bought in there. It’s to our advantage to have it and
there’s a process to go through till we get to the point that we actually convey the property to the
homeowners and it’s all unencumbered and it is what we think that is.

Robert J. Gilchrist: Mr. Oster, or I don’t know if you or Mr. Evanson could possibly answer
some questions. I know there was one question about subsidizing and not kind of just turning this
over to the homeowners and walking away from it. I don’t know if unencumbered or
encumbered is the appropriate word, but I think I understand what the intent was. I don’t know if
you want to address those things. You may have already addressed it to the homeowners
association meeting but it would be very helpful for this Board to have that…

Tom Oster: Encumbered or unencumbered is appropriate terminology. Basically they’re saying
that they want to make sure that they’re obtaining free and clear of any liens or anything out
there. What we do and as we’ve talked about which is in the Minutes of the Homeowners
meeting is number one, we have what’s called a transition meaning we recommend number one,
that the homeowners go out and hire an engineer or somebody that they would like to go out and
inspect the Clubhouse, inspect the property and before they accept it, do a complete walk
through; we walk through it with them. If there’s anything that’s not up to snuff or their
expectations, then we take care of all that prior to conveying the property to them. We would
provide them title insurance so it would go through a title company to make sure that they do
obtain the property free and clear of any liens. K. Hovnanian, I can speak on their behalf because
I am an employee of K. Hovnanian, they’re a public company so I don’t have the ownership in
K. Hovnanian but as the area President for K. Hovnanian, it’s in K. Hovnanian’s best interest to
subsidize the association to make sure that the property is manicured, it looks fantastic, it’s not
boarded up. There are a lot of expenses, like I said, they’re taking in a quarter million dollars a
years, the budget’s a little bit higher than that. K. Hovnanian has provided about $900,000
dollars in subsidies since we opened in 2006. Under the current budget, there’s about an $80,000
deficit per year. Once we get a few more people in there, then the thing becomes self-sufficient.
K. Hovnanian is committed to subsidize. It is in their best interest. The other reason it is in their
best interest more so today than it was in the past is, prior to today, K. Hovnanian did not own
anything at Morningside. They were solely a public builder and when and if they found a third
party buyer that wanted a home built, they would buy the lot from the developer, Ontario Land
Company, and they would build a house. They didn’t have any stake in the property but now that
they’re the successful acquirer of the auction, they’re going to have the deed to everything, so
they going to own it. They’re pretty much stuck isn’t the word, but they’re pretty much
committed and invested in the community. It’s obviously in their best interest to make sure that
it’s self sufficient, so that they can sell homes, make sure it looks good.

Charles Grotsky: My name is Charles Grotsky, 4713 Meadowlark Drive, in Lorain,
Morningside resident. Just to add, again my understanding the purpose is really not convey or to
transfer this property to the homeowners. It’s to split the property into two sections which will
then allow that at some future date to be transferred to the homeowners. That is my
understanding; based upon that, I certainly support that process moving forward to split these
two parcels of land (inaudible) the next step within due diligence on the part of our HOA, then
possibly take possession of this land (inaudible) and the amenities that go with it. Again, I am in
support of splitting the property as being requested here at the Planning Commission. Whether or
not we take possession, it looks like we will, would be the next step in this process.
Robert J. Gilchrist: I appreciate that comment. It is, I don’t want to say one and the same, but
the intent behind one will lead to the other so that allusion is something we wanted (inaudible)
make sure that the homeowners understood and that this Board understood that as well. Yes, sir.

Tom Oster: We will not convey it until you’re willing to accept it. Like I said, we are in Chapter
11, reorganization plan which we do need to finalize sometime between June and December so
that will be part of the plan that at will some point have to be conveyed and the court will
approve that. Today we want to split it. We do have to convey the undeveloped land to K.
Hovnanian based on the auction results, but we will hold it until you guys are ready to accept it.

Robert J. Gilchrist: Any questions or comments from the Commission?

Dr. Ramirez: We’re satisfied that the homeowners know what’s going to transpire and are
comfortable with that, so that’s what our concern was.

Robert J. Gilchrist: Ok, is there a motion to forward this to Council for…

Richard Klinar: This doesn’t go forwarded to Council, that’s it. Once the Board approves it, we
can stamp it and sign it and that’s it.

Dr. Ramirez: I move to support the lot split at the Cottages of Morningside.

Ken Kramer: Support.

Robert J. Gilchrist: It’s been motioned and properly supported. Mr. Klinar, can you take the

Richard Klinar: Mr. Kramer?

Ken Kramer: Yes.

Richard Klinar: Dr. Ramirez?

Dr. Ramirez: Yes.

Richard Klinar: Mr. Gilchrist?

Robert J. Gilchrist: Yes.

Richard Klinar: Ok, it’s been motioned and seconded to approve the lot split at Cottages of

Tom Oster: Thank you.

Robert J. Gilchrist: Thank you, sir.

(Mayor Krasienko joins meeting already in progress at 9:36)
Richard Klinar: Next item on Planning Commission agenda, Z.C.A. #1-2011, Submission for
rezoning of property located at 2601 Broadway from I-1 Special Land Use to B-2 General
Business. Greg Paul, applicant for Craig Catanzarite.

Robert J. Gilchrist: Is the applicant present? If you could state name and address for the record,

Craig Catanzarite: My name is Craig Catanzarite, 13000 Darice Parkway, Strongsville.

Robert J. Gilchrist: I remember this coming to the Planning Commission before. If you can
give us a little background history I think that would be helpful in understanding why it went
from B-2 to I-1 and now the request to go from I-1 back to B-2.

Craig Catanzarite: We did have a sale contract on the property for a cabinet maker who used a
special kind of glue. From his research, it was required that it get zoned as an industrial property.
That deal has fallen through since that time we continued to have the property for sale or lease
and everybody that looks at the property is requested that be a General Business zoned property,
you know, and they want to know that in advance before either they sign a lease or a sales
contract. That’s the reason for the request.

Robert J. Gilchrist: So just to refresh the Commission’s memory, this came to Planning
Commission because of the pending sale and it was originally B-2, but because of the nature of
that business, the need was for it to change from a B-2 to an I-1. That sale obviously didn’t
happen which is a good thing that there is interest in that property albeit the interest is from
individuals and companies are needing a B-2 which is what it was originally zoned as.

Craig Catanzarite: Correct.

Robert J. Gilchrist: Questions or comments from the Commission?

Ken Kramer: I so move to accept the application for 2601 Broadway.

Robert J. Gilchrist: That motion that you’re making is for the approval of it going from I-1
back to B-2?

Ken Kramer: Yes.

Robert J. Gilchrist: Is there support on that motion?

Dr. Ramirez: I’ll second.

Robert J. Gilchrist: It’s been properly motioned and supported for the rezoning of 2601
Broadway. Mr. Klinar, can you take the roll? Now does that need to be forwarded to Council?

Richard Klinar: Yes. This will go to Council.
Robert J. Gilchrist: This motion would include it being forwarded to Council for their approval,

Richard Klinar: Yes.

Robert J. Gilchrist: Mr. Klinar, could you take the roll?

Richard Klinar: Mr. Kramer?

Ken Kramer: Yes.

Richard Klinar: Dr. Ramirez?

Dr. Ramirez: Yes.

Richard Klinar: Mr. Gilchrist?

Robert J. Gilchrist: Yes.

Richard Klinar: And Mayor Krasienko?

Mayor Krasienko: Yes.

Robert J. Gilchrist: That motion has been passed. Thank you, sir. Good Luck on the sale of that
building. If you need any support from the City, let us know.

Craig Catanzarite: Appreciate it, thank you.

Robert J. Gilchrist: There being no further items to discuss, this meeting of the Planning
Commission is now adjourned. (The time is 9:45 a.m.)


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