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Courts and Crime


Cuyahoga County sues over the soured Ameritrust deal
Targets include the county's real estate adviser and the former auditor's son
by WKSU's M.L. SCHULTZE


Web Editor
M.L. Schultze
 
Cuyahoga County ended up spending more than $42 million on the complex that it sold for about $27 million.
Courtesy of KEVIN NIEDERMIER
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In The Region:

UPDATE 2:40 p.m.: Jones Lang LaSalle has issued a statement saying Staubach did nothing wrong and has cooperated fully with investigators. You can find the statement at the bottom of this story.

Cuyahoga County is suing 10 people and companies over the ill-fated Ameritrust complex in downtown Cleveland.

The suit says bad advice and back-room deals left the county with a purchase that soured as soon as it began. WKSU’s M.L. Schultze has more on claims that date back to the corrupt old days of government in Ohio’s largest county.

Like most lawsuits filed in common pleas court, this one comes in at the floor level: $25,000 in damages.

But County Law Director Majeed G. Makhlouf says it likely won’t stay there.

“It’ll be in the millions at least.”

Makhlouf helped frame the suit against the son of former County Auditor Frank Russo, against the county’s former real estate advisor and against eight other individuals and entities. 

The core of the argument has been public for years: A company known then as Staubach collected $3 million from the county over five months to recommend the sale of the downtown tower to Cuyahoga County. Over the next 10 years, the county never moved in and it ended up losing $18 million.

But the lawsuit fills in new details along with the old allegations, including that Staubach paid some $550,000 paid to five entities tied to Vince Russo and others for so-called “government relations work.” 

Makhlouf  says, “All the records that Staubach seems to have is the actual contract itself and the checks paying for it, but nothingsof the reports or analysis or anything of that nature that people who do that kind of work provide for you. We couldn’t find any record of actual services rendered for that money.” 

Staubach is now owned by Jones  Lang  LaSalle, which denies it did anything wrong. Documents show the firm may have recommended a different structure for the deal than the one the county agreed to, but Makhlouf says under no structure would that complex have served the county’s interests.

Here's the statement from Jones Lang LaSalle

We are disappointed to hear that Cuyahoga County Executive Ed Fitzgerald has decided to move forward with a baseless lawsuit against JLL over the County’s acquisition of the Ameritrust complex.  Although we are limited in our comments as we have not yet seen the complaint, we do wish to say the following. 

First and foremost, no one at JLL or at its predecessor, Staubach, engaged in any wrongdoing in connection with the Ameritrust project. We have cooperated fully with the federal and state authorities investigating this matter, including providing access to all of our files, making witnesses available to meet with prosecutors, and testifying before the grand jury on behalf of County prosecutors.  The County prosecutors even thanked us for our efforts.  No one has ever accused anyone at JLL or Staubach of having knowledge of any illegal activity, or of having participated in it.  Although perhaps now it seems politically expedient for Mr. Fitzgerald to make such accusations, we have not been advised of any information suggesting that circumstances have changed. 

We support the work we did for the County and believe we provided exceptional service. Despite media reports to the contrary, including in a Plain Dealer article as recent as last night, Staubach never recommended that the County purchase the Ameritrust complex. Staubach’s recommendation instead was that the County lease the space from a developer who would bear the cost and risk associated with the property renovation. The County commissioners, some of whom are those involved in the corruption scandal, ignored Staubach’s recommendation and proceeded to purchase the property.  This decision led to Staubach’s removal from the project.  It also led to redevelopment expenses that the County has contended created circumstances that allowed the bribery to fester. If the County had followed Staubach’s lease recommendation, those circumstances would not have arisen. In fact, the County now has decided to pursue a lease for its new offices, confirming that Staubach’s original recommendation was the right one.  

JLL fully supports Mr. Fitzgerald’s efforts to bring to justice those actually involved in corruption and we have worked with the County in support of those efforts.  We believe, however, that litigation against JLL is a complete waste of County resources.  We will continue to monitor this matter and will respond legally if and when that becomes necessary. 

 

 

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