City of Ontario soon to own 266-acre former GM site

ONTARIO - Ontario Mayor Randy Hutchinson Wednesday night announced the city has agreed to a settlement in lieu of filing a lawsuit against the company that purchased the former General Motors property on West Fourth Street.

The announcement comes after more than a year of negotiations between city representatives and the Ontario Business Park,

A short press conference took place prior to the Ontario Council meeting Wednesday night, with Hutchinson reading a prepared statement at 6:45 p.m.

Ontario Business Park has agreed to transfer all of the 266-acre former GM property to the city for the release of the $1 million being held in escrow and then a termination of the agreement, thereby releasing all liabilities under the agreement, Hutchinson said.

The site is still sitting idle long after the GM plant closed in 2010 and the buildings were demolished in 2013.

When the Adler Group, a Miami, Florida-based realty company, purchased the property in 2012, company officials said they planned to redevelop the former GM site into a modern, multi-tenant facility that would create 1,130 jobs over five years.

According to the redevelopment agreement with the city, signed in 2012, if there weren't 500 jobs on the premises in five years, the city would receive $1 million, which was to be held in escrow.

Ontario was to receive another $1 million at the end of 10 years if the promised jobs were not created.

In the summer of 2017, council sent a notice of default of completion guarantee to the Adler Group, which is a partner of Brownfield and Hilco Trading LLC in the redevelopment project.

In that notice, the city alleged that Ontario Business Park was in default of the agreement because it had not created the required 500 jobs on the site within the first five-year term of that agreement, and as a consequence, the $1 million that Ontario Business Park had placed into escrow securing the job creation obligation would be forfeited to the city, the mayor said in his statement.

"Upon receiving the notice, representatives of Ontario Business Park appeared in a council meeting and argued, among other issues, that the notice was untimely and threatened legal action if the city pressed forward with the default," according to the mayor's statement. 

The city considered every option available, including a lawsuit, receiving portions of the property in exchange for a reduction of job creation requirements, to a transfer to the city of the entire property, Hutchinson said.

Hutchinson thanked the Ontario Business Park for the opportunity to re-establish the property as a foundation of the city. "Because General Motors was a cornerstone of Ontario since its founding, we are excited about the potential for the property's renaissance," Hutchinson said.

Hutchinson said once the agreement is signed and the property is transferred, city officials will work hard to ensure the property is maintained and developed.

There are no plans for the site as yet, he said. 

When asked by Ontario resident Ron Speck if any federal money is available to redevelop the property, the mayor said there is New Jobs Ohio and there are some money available.

"Whether we can get that or not, I can't comment on that; we don't know," he said.

The Ontario Business Park officials tore down the former GM plant buildings, including the water tower and power plant, and scrapped all the materials for an unknown amount of money, estimated in the millions of dollars.

All that remains was unsightly deep pits. According to News Journal archives, the pits at the site, including the basement from the powerhouse and two large former press pits, started being filled in the fall of 2016.

When asked if the settlement was bittersweet, Hutchinson said, "We'll just have to move forward from this point."

Officials from the Adler Group of Miami, Florida, the developers of Ontario Business Park, were not available for comment Wednesday night. Ontario Business Park is a joint venture between the Adler Group of Miami, Florida, and the Hilco Organization of Northbrook, Illinois.

Thursday, Adam Mait, vice president of development for the Adler Group, said market conditions made it difficult to develop the former GM site despite their best efforts and significant investment of dollars.

"It was a pleasure working with the city. We're happy we could reach an agreement," Mait said.

Council will have an economic development committee meeting at 5:30 p.m. Oct. 9 at the city administration building on Stumbo Road.

lwhitmir@nncogannett.com

419-521-7223

Twitter: @LWhitmire