YOUNGSTOWN Deal settles suit over CCA prison

CCA wanted the lawsuit to be resolved before trying to reopen the prison.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- A new tax deal and "best efforts" at reopening the closed private prison are the main features in a major legal settlement.
City Law Director John McNally IV said he is confident the prison's owner, Corrections Corporation of America, eventually will reopen the prison with the lawsuit resolved.
"They need to open this prison. They can't have it sitting," he said.
A lawyer representing CCA at the council meeting, Timothy Bojanowski, deferred questions about the prison's future to the company's Nashville headquarters. Corporate officials couldn't be reached to comment Thursday evening.
Avoids trial
City council approved the settlement at a special meeting Thursday. The deal, after a year of talks, avoids a trial first scheduled for last summer but delayed while the deal developed.
At issue was the 5-year-old suit the school board filed against CCA and the city over tax breaks granted to the company. Millions of dollars were at stake.
The school board is expected to approve the deal soon. Lock P. Beachum Sr., the school board president, last week called the settlement a "win-win situation" for all involved.
A major element is how CCA will pay the city and school board.
The 12-year deal gives CCA a 100-percent abatement on property taxes. Instead, CCA will make payments in lieu of taxes.
The payments will be split between the school board and the city. The schools will get 70 percent and the city 30 percent. The schools typically receive about that proportion of all property taxes.
Previous deal
Previously, the city gave CCA a deal that said the company would pay only a small part of its property taxes in the first five years. The bulk of that would go to the city schools.
In the second five years, CCA would continue paying its school tax bill and a large lump sum directly to the city alone. The school district would get none of that money. The deal also called for the schools and city to share in income tax revenue.
The school district protested the deal, and the Ohio Tax Commission never approved it. That left CCA to pay its full tax bill since opening the prison. Payments continued despite the prison being emptied of prisoners two years ago when a federal contract expired. CCA has paid about $5 million in property tax to date.
CCA pledges in the settlement to make its "best efforts" at reopening the prison as soon as possible.
CCA wants to reopen the prison, McNally said. The company wanted the lawsuit to be resolved, however, before trying to reach a contract with governments to supply inmates to the Youngstown lockup, he said.
The deal also says CCA can transfer the property to a new owner that will open the prison, with the city's permission.
The federal government and some local officials have talked about buying and operating the prison.
There are no major changes to the city's federally approved prison operations contract with CCA.
Medium security, as defined by the state, will continue to be the highest classification of inmate allowed.
Number allowed
The maximum number of inmates will be 2,016, the number of beds originally built. Female inmates aren't allowed now but could be if the city approves.
The city retains the right to have a prison monitor track CCA's compliance with the operations contract. CCA, however, will not have to pay the monitor's cost as in the past. The city will pick up that tab.
Each side will pay its own legal fees under the settlement. McNally expects that to be around $100,000 for the city.
rgsmith@vindy.com