Kokomo — County officials have rejected a proposal by a company currently leasing the former Howard County jail to lease the facility back to the county as a means of terminating a 25-year agreement.
Cedarbridge Treatment Centers took over the lease from Correctional Management in 2009 and is now looking for a new facility in Kokomo to reopen the former Kokomo Academy, which was renamed the Berkley Center.
Cedarbridge Treatment Centers closed the Kokomo Academy in April and have been in negotiations with the county on ways to terminate the lease, which runs through 2022.
Cedarbridge has missed the April, May and June lease payments, totaling $13,800, to the county.
According to records at the Howard County Treasurer’s office, Cedarbridge is delinquent on $69,766 in real and personal property taxes owed to the county. Treasurer Martha Lake said an additional $31,013 is due in November.
Cedarbridge spokesperson Roger Brummett acknowledged the taxes are owed.
Ron Hunter, president of Cedarbridge, said Wednesday the company will make the payments as it looks for a new location to open a second facility in Kokomo. The company also operates the Friendship House.
“Obviously we’re going to pay the back lease payments,” Hunter said. “I have been trying to resolve several issues over the past eight months. We want to re-open the Berkley Center at a different location
He said the company’s first choice for a new facility is the McKinley School, which is slated for closure.
Hunter said the company is looking to upgrade the treatment facilities to care for children.
Cedarbridge made two offers to county, officials which were rejected, said Howard County attorney Larry Murrell.
The first offer was for the county to pay Cedarbridge $2 million and the company would vacate the property. The second offer was for the county to sublease the property for $20,000 per month.
“He [Hunter] was under the assumption the county needed the facility,” Murrell said. “The commissioners asked the sheriff, Kinsey Youth Center director and Community Corrections if there was any use for the building.”
Murrell said it was determined the county has no current need for the facility and there would be a cost to renovate the building for any future use.
Hunter noted that Correctional Management made approximately $3 million worth of improvements to the Berkley Road facility, including installing a new gymnasium.
Brummett said Friday it’s Cedarbridge’s intent to reach an amicable agreement to return the facility to Howard County.
“There is a lot of communication moving back and forth,” he said. “In this tough economic climate, we’re trying to resolve a lot of issues.”
Brummett said all the former employees of the Berkley Center have been paid in full.
Murrell said Cedarbridge asked the county to forgive the taxes owed, a request that was denied.
“We have talked about the outstanding property taxes and how we can resolve the lease issue,” he said.
In April the Indiana Board of Tax Review denied the operators’ request for tax exempt status. The company contended the Kokomo Academy was an educational facility and entitled to the designation.
The state board determined because the facility was leased from the county and didn’t have authorization from Howard County, it didn’t have the authority to file the application.
Hunter said that ruling is being appealed to the Indiana Tax Court.
Assessor Jamie Shepherd said the request was denied at the local level because Cedarbridge didn’t own the facility as required by state law.