AVALON SOUTH GOLF COURSE Contract didn't mention tax status, papers show

Records show that the city began getting property tax bills in 1989.
By PEGGY SINKOVICH
AND DENISE DICK
VINDICATOR TRUMBULL STAFF
WARREN -- City officials learned in 1989 that Avalon South Golf Course was taxable but allowed the course's operator to believe through a 1993 contract that it was tax-exempt.
A copy of the contract, signed by Tony Joy, operator of the city-owned golf course, states that the course "is used for municipal purposes and is therefore free from taxation."
The contract also states if the law changes and the property becomes taxable, Joy would assume and pay all taxes.
What the contract doesn't state is that the property became taxable in 1989, according to documents at the Trumbull County Auditor's Office.
Auditor's letter
A March 3, 1989, letter written by then-auditor Edward Bush to James Rounsley, then Howland Township administrator, states that Avalon South Golf Course would be taxed. The course is in Howland Township.
Township officials in 1988 had asked that the county make sure the course was paying property taxes. Before '88, Warren City Chamber of Commerce, a nonprofit organization, operated the course, so it was not taxable, county officials said.
County records show the city began getting property tax bills in 1989.
Sferra says he didn't know
Dan Sferra, Warren mayor through 1995, said when the city entered into the 1993 contract with Joy, Sferra thought the property was not taxable.
"I remember that I got tax bills [before 1993] but I thought the property wasn't taxable so I gave the bills to our law director and told him to take care of it," Sferra said.
The law director at the time, Bill McLain, could not be reached to comment.
Greg Hicks, city law director, said he came into office in 1992 and found out in 1994 that the property was being taxed and the city owed back taxes.
The city appealed the tax issue with the state Department of Taxation in 1995. The state, however, rejected the tax-exempt status for the golf course, saying the agreement between the city and Avalon South Management was a lease rental agreement rather than a management contract.
The golf course was being leased by a for-profit company. The course wasn't being used for a municipal purpose, Hicks said.
Joy should have known the property was taxable because it's all a matter a public record, Hicks said.
"That's ridiculous," said Atty. Richard Schwartz, who represents Joy. "If Mr. Joy didn't know it was taxable, how would he know what public records to ask for or to even ask for public records."
Case history
The city in February tried to evict Joy from the course, citing unpaid rental fees and property taxes, failure to pay a bank loan and failure to maintain liability insurance.
Joy sued for breach of contract, contending officials told him he would be credited for improvements he made to the facility, which include a new clubhouse and that in 1988, the city's safety-service director told him he would not have to pay property taxes.
The course remains open and Joy is still operating the facility, officials said.
A trial is set for December 2003, but attorneys for both sides have said they hope to reach a settlement before then.
sinkovich@vindy.com
dick@vindy.com