Crawford County Court of Common Pleas has cleared the way for Conneaut Lake Park to head to a sheriff’s sale Friday to pay off more than $925,000 in overdue real estate taxes.
In an order issued late Wednesday afternoon, President Judge Anthony J. Vardaro overruled all four points raised in the Pennsylvania Office of Attorney General’s petition to halt a planned sheriff’s sale of the amusement park to settle its outstanding tax debt. Vardaro’s ruling means Conneaut Lake Park can be sold at auction at Friday’s monthly sheriff’s sale at the Crawford County Courthouse in Meadville.
“We are reviewing the order and determining whether we should file an appeal,” J.J. Abbott, spokesman for the state Attorney General’s Office, said in an email to the Tribune.
While county court’s ruling allows the sheriff’s sale to go forward, Trustees of Conneaut Lake Park has two options, according to Mark Turner, Trustees’ executive director. Trustees of Conneaut Lake Park is the nonprofit corporation that oversees operations of the amusement park.
One option is to file for federal bankruptcy protection in U.S. District Court prior to Friday’s sheriff’s sale, Turner said. A bankruptcy filing would halt any sheriff’s sale while the park seeks federal bankruptcy court approval to reorganize its debts and set a repayment plan.
The second option is the Trustees resign and turn the nonprofit corporation back over to control of county court, Turner said.
Turner said he plans to meet Trustees today either in person or by phone to determine the next move.
“The board will have to decide that tomorrow,” Turner said late Wednesday afternoon when asked what Trustees may do. “We met Monday and looked at all the possible scenarios on what the judge may do.”
On Sept. 10, Conneaut School District, Crawford County and Sadsbury and Summit townships filed a joint motion with county court for a sheriff’s sale to force payment of $927,812.95 in property taxes, interest and penalties owed to them, plus $14,029 in attorneys’ fees as well as costs associated with the sale to be added.
In October, the Attorney General’s Office petitioned county court on behalf of Conneaut Lake Park asking the proposed sale be halted, raising four points in its petition.
The state contended Conneaut Lake Park is exempt from a sheriff’s sale because the property is held within a charitable trust; the park’s land may have been assessed improperly for taxes; the land must be used as a public park because of deed restrictions on the property; and any sale of the park can’t be done through county court’s Civil Division, but the Orphans’ Court division because under Pennsylvania law Orphans’ Court has jurisdiction over property committed to charitable purposes.
In his ruling on Wednesday, Vardaro found the Crawford County Court’s Civil Division had jurisdiction over the matter, citing Pennsylvania case law from 1952. That case showed a sheriff’s sale and deed did not terminate that case’s charitable trust and end the charitable use for which the property was dedicated.
Vardaro also found that under Pennsylvania law, a petition to set aside a sheriff’s sale can be filed for up to 20 days after the sale, but not before the sale.
On the issue of taxes being improperly assessed, Vardaro found there was no indication an appeal or exemption from taxes was ever filed by either the Trustees or any court-appointed custodian of Conneaut Lake Park. Vardaro ruled Pennsylvania law states tax exempt status cannot be applied retroactively.
“To conclude that the defendant (Trustees of Conneaut Lake Park) is immune from this sheriff’s sale would be akin to suggesting that a charitable trust can go on and accrue debt which it cannot pay and the debtor is effectively without remedy.”
Vardaro noted while the commonwealth argues any potential buyers should be made aware of the charitable use restrictions that go with the land, there is no need to give notice at the time of the sheriff’s sale.
“We assume that any buyer at the sheriff’s sale who is prepared to spend the amount of money necessary to purchase this real property will exercise due diligence in determining exactly what they are purchasing,” Vardaro wrote.
Officials from two of the four taxing bodies — Crawford County and Sadsbury Township — were aware of the ruling.
“I’m sure the judge looked at it hard and long before making his ruling,” said Chairman Francis Weiderspahn Jr. of Crawford County Board of Commissioners.
Asked if he thought Trustees may file for bankruptcy to avoid Friday’s sheriff sale of the park, Weiderspahn said, “It’s up to the Trustees whether to file for bankruptcy.”
“That’s amazing,” Kevin Van Honk, chairman of Sadsbury Township Board of Supervisors, said when told of Vardaro’s ruling. “I thought it would get delayed.”
Van Honk said he wouldn’t be surprised if Trustees opt to file for bankruptcy protection for the park.
“He (Mark Turner) is going to do what he needs to do or wants to do,” Van Honk said. “I have no problem with that.”
Tribune attempts to reach William Agent, chairman of Summit Township Board of Supervisors, and Dr. Walter Thomas, president of Conneaut School Board, were unsuccessful Wednesday.
Keith Gushard can be reached at 724-6370 or by email at firstname.lastname@example.org.