A brief filed with the Ohio Supreme Court this week argues that lower court decisions in a dispute over the proposed location of the Cleveland Foundation’s new headquarters have sent a clear message: Laws don’t matter in Ohio “for those who are wealthy or powerful enough” to circumvent them.
Both the Cuyahoga County Court of Common Pleas and the state appellate court in Cuyahoga County have ruled against plaintiffs who sued in 2019 to invalidate the sale of greenspace by the Dunham Tavern Museum to the Cleveland Foundation. The state’s high court is the last venue where an appeal may be heard. If it declines to adjudicate the case, the Cleveland Foundation may go forward with the construction of its proposed $25 million building on E. 66th Street between Euclid and Chester Avenues, (rendering above).
The Dunham Tavern Museum is the oldest standing residence in Cleveland. It had recently purchased the land in question, more than two acres adjacent to its structure on Euclid Avenue, following a fundraising campaign between 2012 and 2017. With nearly $700,000 in hand, the museum demolished a vacant industrial property on the site and planned to convert it to a public park, with enthusiastic support from its membership.
“We demolished the [warehouse], making Dunham green space the largest in Midtown Cleveland,” the Dunham Tavern Museum’s website read shortly after the demolition. “Your tax-deductible contribution is an investment in Cleveland’s cultural heritage and our community’s thriving green space.”
But shortly after the land was acquired, the 2019 lawsuit alleged, the Cleveland Foundation engaged members of the Dunham Tavern Museum’s board of trustees and privately negotiated a sale.
The terms were ironed out in secret, and many of the museum’s members and donors felt betrayed after they’d contributed money to see the land converted to a park. Twenty-six of them signed a letter calling the board’s actions “reprehensible” and vowing to remove the small museum from their estate planning. A few filed suit to invalidate the sale.
This week’s brief, filed by attorneys Peter Pattakos and Rachel Hazelet on behalf of their clients Christeen Tuttle and other former members of the museum, summarizes the case and argues why it’s crucial that the state supreme court intervene. Allowing the lower courts’ decisions to stand would not only set a dangerous precedent for corporate governance in Ohio, the brief asserts, it would undermine public confidence in the judiciary by conferring immunity on a large and politically connected organization that engaged in an unlawful transaction.
“With the release of recent census data giving rise to widespread reports that Cleveland is now the poorest large city in the U.S.—on top of what was already known about the city’s staggering inequality, poverty, and infant mortality rates,” the brief reads, “it would be hard to think of a worse time for Ohio courts to send the message that such an enormously influential and wealthy community foundation [the Cleveland Foundation], the oldest in the nation, is above the law; particularly in a case where the foundation seeks to usurp historic greenspace that was reclaimed by charitable donations intended precisely to preserve the land for the public’s enjoyment.”
Pattakos, (who is representing Scene in a concurrent, unrelated case), told Scene that after the initial suit, the Cleveland Foundation launched a “full-court press” of publicity which built premature excitement for the new location and its “transformative potential” while simultaneously pretending the lawsuit didn’t exist.
Ward 7 Councilman Basheer Jones, for example, in a comment to Plain Dealer reporter Steve Litt last year, said he was so excited by the Cleveland Foundation’s proposed relocation that he wanted to “yell it from the rooftops.”
“If I don’t achieve anything else, this move with the Cleveland Foundation moving to Ward 7 will be the best accomplishment I could achieve,” he said. “There could be nothing else that’s as great. It almost brings tears to my eyes.”
Cleveland Foundation President and CEO Ronn Richard has called the proposed move a “clear and emphatic statement” that the foundation intends to walk the talk by investing in historically poor, overwhelmingly Black neighborhoods and ushering in auxiliary development while doing so.
But the Dunham Tavern Museum members have been dismayed throughout the process, especially as they’ve watched the avalanche of plaudits from Cleveland’s political and non-profits elites.
“Why the Cleveland Foundation would act in concert — in concert — with a portion of a board that was defiling its organization’s purpose and shattering its membership is a mystery,” wrote Dunham Tavern Museum member Thomas Bier in a bitter condemnation of the backroom deal last year. “No end, no matter how grandiose its vision, justifies such means. The foundation’s conduct was wholly out of character.”
Chief among members’ questions is why the exact site that they’d just acquired for another purpose should be the only viable parcel in Midtown in the eyes of an organization with sufficient financial reserves (at least $2.5 billion) to locate anywhere.
“My clients are not opposed to the Cleveland Foundation building its new headquarters in the Midtown neighborhood, and would welcome such a development,” Pattakos said last year. “It just doesn’t belong on the Dunham Tavern greenspace that community members recently donated $700,000 to restore, consistent with the Museum’s mission and historical character. There are plenty of alternative sites that would do, and my clients are entitled to answers in court about who Mr. Collins and Mr. Wagner sought to benefit by rushing this transaction through in violation of the Museum’s bylaws.”
Ay, there’s the rub.
Tim Collins and David Wagner are the named defendants in the case. They are museum trustees who work as an attorney and a real estate manager, respectively, and who negotiated the sale with the Cleveland Foundation. They were alleged to have conflicts of interest and so-called “conflicts of responsibility,” which should have rendered the sale void, according to the plaintiffs’ interpretation of Dunham Tavern Museum’s bylaws. When reached by Scene, an attorney for Collins and Wagner said he had no comment, as litigation is pending.
One of the 2019 lawsuit’s arguments was that Collins and Wagner, who work in or adjacent to real estate development, could have reasonably inferred that the construction of the foundation’s headquarters, and the stated plans for additional development, would increase property values in the surrounding area, where they or their clients have investments. The lower courts dismissed these concerns as “speculative.”
And yet, the speculation was rooted in strong circumstantial evidence, not least the fact that the area in question is located in a federally designated Opportunity Zone, nor indeed that the Cleveland Foundation itself has promoted the idea of new development in the immediate vicinity.
Sure enough, three days after the Supreme Court filing, a collection of “nonprofits and colleges” saw fit to publicize that they had selected a developer to design a new “innovation district” on and around the Dunham Tavern Museum land in dispute. The group, which includes the Cleveland Foundation, JumpStart Inc. and the Midtown community development corporation, “wants to see the district grow over time and include office space, retail and housing.”
“MidTown Cleveland Executive Director Jeff Epstein said the soonest construction would start is in late 2021,” cleveland.com reported. “The building will go up at East 66th Street and Euclid Avenue, at the same intersection the Cleveland Foundation chose as the site of its $25 million new headquarters… That timetable may be optimistic, Epstein said, as that is contingent on finding the right mix of tenants to fill the building before construction, envisioning a setup where established companies and startups can work together in labs and other research.”
The timetable is evidently not contingent on the outcome of the current lawsuit. There was no mention of the suit, or for that matter of Dunham Tavern Museum, in the coverage of the proposed Innovation District.
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