Once-stellar F. Lee Bailey now broke, beleaguered

By Michael D. Sallah and Joshua Benton
Blade Staff Writers

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In 1981, F. Lee Bailey was still at the top of his game.

The defense attorney to the stars – with clients like Dr. Sam Sheppard and Patricia Hearst behind him, and O.J. Simpson still to come – was visiting a friend, wealthy agribusiness executive George Weasel, on a large estate about 25 miles southwest of Toledo.

Mr. Weasel had hired the flamboyant lawyer to handle his divorce. The two became fast friends, in part because of their shared love for flying jets.

One day over cocktails, Mr. Bailey suddenly stood up and said: “Do you want some lobster? I can get the best lobster anywhere,” Mr. Weasel recalled.

Without hesitation, the pair hopped on Mr. Bailey’s Lear jet and headed for Boston. They were met at the airport there by men with two large vats, filled with plump, live New England lobsters.

They got right back in the plane and returned to Ohio, where Mr. Bailey cooked up the catch. “Lee knew his lobster, and he knew how to cook it,” Mr. Weasel said.

Mr. Bailey was at the top of his profession back then, and he lived like it: imported scotch by the case, Dunhill cigarettes, casual jaunts to exotic places. He was the man America’s most famous people called when they ran into trouble, and those phone calls were very, very profitable.

Those old days must seem like another era to Mr. Bailey today. Last week, a Florida judge recommended that the 67-year-old litigator be disbarred. He is accused of taking millions of dollars worth of stock from a convicted drug smuggler he represented and refusing to turn it over to federal prosecutors.

The greatest irony for a lifelong high spender: Mr. Bailey says he needed the money because he’s broke.

Cantankerous, egotistical, and obstinate, he has been in scrapes with the ethical guardians of his profession before. He was almost disbarred 30 years ago when a Massachusetts judge said his attitude showed “a self-esteem of such proportions as to challenge description.”

But this may be the old warrior’s last chance. In the last year, his wife and mother have died, and his work load has been reduced by all the time he has spent in court defending his own actions.

“It’s sad, because this is a guy who was probably the most prominent lawyer in the country,” said Darrell Van Horn, a former assistant Lucas County prosecutor and friend of Mr. Bailey. “To go through this at this stage of his life has got to be tough.”

There’s a lien on Mr. Bailey’s million-dollar home near Palm Beach, Fla., and he claims he’s living off the good will of friends and associates. In a recent court appearance, he told the judge the only money he had was in his wallet.

His fall is all the more remarkable considering the pinnacles he once attained. Francis Lee Bailey was among the first lawyers to turn himself into a celebrity by using the news media in high-profile cases. And in the process, he became perhaps the most recognized American lawyer of the 20th century.

“I’ll hire F. Lee Bailey” became the potent retort of anyone facing thorny legal problems.


He first came to prominence in 1964 as a young man in a Cleveland courtroom. Just four years out of law school at Boston University, he convinced a judge to give a new trial to Dr. Sam Sheppard, the doctor who was accused of murdering his wife in the case that later inspired the television series, The Fugitive.

Mr. Bailey eventually got the U.S. Supreme Court to agree on appeal and won his client an acquittal in the retrial.

It was the first – but not the last – time that Mr. Bailey was in a “trial of the century.” Indeed, he seemed to be involved in most of them.

Mr. Bailey’s argument for a retrial centered on the massive pretrial publicity in the Sheppard case, which he argued had influenced the jury and meant his client could not get a fair trial.

But it was perhaps the last time the Massachusetts native complained about massive publicity. He spent much of his career seeking the spotlight, going after such high-profile cases and taking his arguments to the media.

His celebrity status thrust his social life into the headlines, particularly his protracted affair with singer Connie Francis. He rubbed shoulders with the famous and was a frequent guest on late-night talk shows.

And when he wasn’t appearing on television shows, he was sometimes hosting them. At 34, he was picked to host a show called Good Company, where he interviewed the rich and famous about their lifestyles. The show’s producer, David Susskind, said of his host: “He’s brilliant, he’s articulate, he’s sexy, he’s a natural for television.”

Years later, Mr. Bailey hosted another show, Lie Detector, where he sought such scoops as whether Zsa Zsa Gabor was telling the truth about whether she married men for their money.

His name was prominent in almost every medium. His books were best sellers, particularly his first, The Defense Never Rests. The book’s jacket gushes: “F. Lee Bailey is probably the most controversial – and certainly the most talked about – American lawyer since Clarence Darrow.” And his lectures were well attended around the country, including several appearances in Toledo.

To some attorneys, Mr. Bailey’s penchant for publicity was grating; even some of his clients didn’t like it. Newspaper heiress Patricia Hearst appealed her conviction for a bank robbery, saying Mr. Bailey spent too much time seeking a book deal to provide her a proper defense.


But many of his clients were still drawn to his undeniable ability in a courtroom. He was known for a razor-sharp memory, cross-examining witnesses for hours without using notes.

“He truly mastered the art of cross-examination, far more than most lawyers,” said James Tuschman, who spent a day with Mr. Bailey when the celebrated attorney visited Toledo for a lecture in the 1970s. Mr. Tuschman, a lawyer himself, now chairs the University of Toledo’s board of trustees.

Cases that seemed hopeless to some turned into victories for Mr. Bailey. In 1971, he defended Capt. Ernest Medina, an Army officer implicated in the My Lai massacre during the Vietnam War. In his memoirs, Mr. Bailey calls Mr. Medina “the most decent man I’ve ever had the privilege to defend,” and despite significant evidence against his client, he won an acquittal.

Later, Mr. Medina admitted that he had been aware of what was happening during the massacre and had “not been completely candid to avoid disgracing the military, the United States, his family, and himself.”

Mr. Bailey also played a role in getting the release of one of Toledo’s most notorious gangsters, Thomas “Yonnie” Licavoli, who took over Toledo’s rackets in a wave of violence during the Depression. Licavoli was convicted of four murders, including the killing of Toledo bootlegger Jack Kennedy, in one of the city’s most infamous slayings.

In 1970, Mr. Bailey was hired as part of a legal team to try to get Licavoli out of the Ohio Penitentiary. At a speech in Toledo, he compared his new client to Dr. Sheppard, saying both were notorious in the state: “There seems to be a feeling Licavoli must be kept in prison as long as possible.” Licavoli was paroled two years later and died shortly after his release.

Mr. Bailey didn’t win all of his cases. His defense of Ms. Hearst was unsuccessful, as he couldn’t convince jurors that she was brainwashed by her Symbionese Liberation Army captors.

He was the lawyer for the alleged “Boston Strangler,” Albert DeSalvo, and recorded his client’s confessions to the crimes. DeSalvo was never charged in the crimes, however, and was killed in prison while being held on unrelated charges.

Mr. Bailey has had legal troubles of his own. Twice he has clashed with state bar associations, resulting in disciplinary action. In 1970, he was censured by a Massachusetts Supreme Judicial Court justice for doing what brought him his fame in the first place: talking to the news media about his case.

Justice Paul Kirk wrote that Mr. Bailey “is unwilling to concede that he could have been wrong; he believes that he alone should decide if ‘special circumstances’ exist to justify a departure from the established norms of conduct; he studies rules and judicial orders with a purpose of evasion rather than a will to comply with their spirit for the general good.”

He concluded that Mr. Bailey has developed “a philosophy of extreme egocentricity for the defense of criminal cases involving the use of news media.”

Disbarring Mr. Bailey “would not be essentially wrong,” Justice Kirk wrote. But the justice said he chose to merely censure him because disbarring Mr. Bailey “would close the door to possible reconsideration of values and standards by one who is still young in the profession.”

A year later, the Supreme Court of New Jersey suspended Mr. Bailey’s privileges to practice in the state for one year, again because of his efforts to plead his case through the media.

Over the years, a string of legal problems – including drunk-driving arrests and a mail-fraud case – exposed Mr. Bailey to the other side of the legal process. Often representing himself, he was never convicted of a serious charge.


Mr. Bailey sometimes used his legal troubles as a way to portray himself as a maverick, someone who was not part of the legal establishment. A former Marine jet pilot, he likened his role to a pilot fighting a lonely battle.

“If I ran a school for criminal lawyers, I would teach them all to fly,” he wrote in his memoir. “I would send them up when the weather was rough, when the planes were in tough shape, when the birds were walking.

“The ones who survived would understand the meaning of ‘alone.’ If I understand anything, I understand that.”

Colleagues said that Mr. Bailey didn’t try to ingratiate himself to judges and other lawyers. “Lee never gives an inch on anything,” said Seymour Gelber, former judge and Miami Beach mayor. “It’s not in his nature. That sometimes makes him extremely unpopular.”

But no matter who he was defending, Mr. Bailey did it in high style. He would fly across the country at a moment’s notice in his own eight-seat Lear jet, collecting huge legal fees.

“Lee would fly in, and I’d be expecting him to stay for a couple of days, and he’d no sooner sit down than the phone would ring, and he’d be off flying to somewhere else,” said Mr. Weasel, 75, whose Henry County estate was sometimes a home away from home for Mr. Bailey in the early 1980s. “He would stay here for weeks at a time, just to get away,” said Mr. Weasel.

By the mid 1980s, Mr. Bailey had decided that he wanted to move his practice from Boston to south Florida. He began to study for the Florida bar exam while living in an oceanfront condo in Palm Beach.

That’s when Mr. Van Horn, the Toledo lawyer, first met Mr. Bailey, when they were both studying. Mr. Van Horn’s wife at the time, Polly, was a close friend of Mr. Bailey’s wife, Patricia.

Mr. Van Horn, 52, recalls dining one night at the Palm Beach condo. “We were having a rack of lamb dinner, but Lee kept getting calls from people representing [Panamanian dictator Manuel] Noriega, trying to get him to take the case,” he said. “Then two minutes later, the Justice Department would call. He was back and forth on the phone all night.”


Soon after meeting him, Mr. Van Horn learned that Mr. Bailey’s connections to the Toledo area went back decades.

In the mid 1960s, when he was searching for a new venue for the Sam Sheppard case, Mr. Bailey drove around Ohio, talking to local residents in each city to see if they believed his client could get a fair trial there.

Mr. Van Horn said Mr. Bailey told him Toledo was one place where he felt his client could get an open-minded jury.

Mr. Van Horn also began to notice a Bailey trademark: heavy drinking. He recalls going to dinner with Mr. Bailey and his wife one night at a Palm Beach restaurant.

“I remember him ordering a double scotch on the rocks, and then he stopped the waiter and said to bring two. And before he finished his second drink, he was already ordering two more. By the end of the night, we were all singing Italian songs.”

Indeed, the opening words of Mr. Bailey’s second memoir, For the Defense, are: “Heavy trials make me thirsty.”

In 1989, Mr. Bailey was admitted to the Florida bar. But the next time most Americans heard his name was a few thousand miles west, in Simi Valley, Calif. In 1995, he was part of the legal “Dream Team” that defended O.J. Simpson in his double-murder trial. Mr. Bailey cross-examined Detective Mark Fuhrman on whether he had used a racial slur against African-Americans in the last 10 years.

Mr. Fuhrman’s denials came back to haunt him five months later, when the defense produced tapes of the detective using the “N word” dozens of times in an interview with a writer. The taint of racism left by the exchange was cited by many analysts as a critical point in Mr. Simpson’s eventual acquittal.

It was the last time Mr. Bailey was in the spotlight in a favorable way.

He has always been able to pull himself out of trouble, but with the latest charges, it may not be so easy.

“Lee’s in some serious trouble now, and he’s going to need a lot of help,” said Mr. Gelber, the former Florida judge and mayor.

Mr. Bailey told a Toledo audience in 1970 that he held drug smugglers in a special brand of contempt. He said he declined to represent smugglers unless he believed they were innocent.

By the mid 1990s, Mr. Bailey had evidently changed his mind, in a case that has come back to haunt him.


In 1994, federal drug agents made a major catch: They arrested Claude Duboc, believed to be one of the most important marijuana smugglers in the world, in Hong Kong. He was extradited to the United States and retained Robert Shapiro, another of O.J. Simpson’s “Dream Team,” to be his attorney.

Since Duboc’s trial was to be held in Florida, Mr. Shapiro contacted his old friend and mentor, Mr. Bailey, to handle that end of the case. According to federal documents, each attorney was to receive a $1 million fee from Duboc.

Their client’s guilt was never in doubt; Mr. Bailey even referred to him as a man “with no legitimate source of income.” But he was fabulously wealthy, with two large estates in France and valuable collections of cars, boats, and artwork.

Among Duboc’s assets was 602,000 shares of Biochem Pharma, a Canadian company whose research into a possible AIDS drug was likely to send the stock’s value soaring.

Mr. Bailey and Duboc’s other lawyers negotiated a deal: In return for a guilty plea from their client and what they called “extraordinary cooperation” – meaning Duboc would forfeit all of his possessions to the federal government – prosecutors would go easy on him and give him a lighter sentence.

Because the Biochem stock was expected to gain in value, Mr. Bailey kept it separate from Duboc’s other assets. Federal officials claim that that arrangement was temporary and that the stock was supposed to be turned over to the government as well.

Mr. Bailey claimed the stock was his to keep as part of his legal fees.

When he refused to turn over the stock in 1996 – by then worth more than $16 million – he was found in contempt of court. With cameras flashing and reporters watching, Mr. Bailey was led away in handcuffs and leg irons to jail.

He spent more than 40 days there before agreeing to give up his yacht and $16 million, having to borrow some of the money he handed over.

But his troubles weren’t over. The Internal Revenue Service slapped a $243,000 lien against him for allegedly underpaying his income taxes in the early 1990s. Last year, in a New York case, he said in an affidavit that “heavy reverse cash flows” have left him unable to pay his mortgage or office rent.

Big spending

Some who know Mr. Bailey would say that his big spending finally caught up with him. “If Lee made $1 million, he would spend $1.5 million,” said Mr. Van Horn.

And his handling of the Duboc stock led the Florida Bar to file a complaint against Mr. Bailey, alleging misappropriation of funds, lying in court, and attempts to influence a judge. On July 17, a special referee, Collier County Circuit Judge Cynthia Ellis, released her findings: He should be permanently disbarred.

“At the end of the day, [Mr. Bailey] has forfeited his privilege to practice law in the state of Florida,” she wrote. “Frankly, it is difficult for this referee to conceive of a more egregious act of circumstances than those which Mr. Bailey has brought upon himself.”

Mr. Bailey continues to defend himself, saying prosecutors are out to get him and are lying about the stock deal.

The final decision now lies with the Florida Supreme Court.

If he is disbarred in Florida, he would likely face a similar fate in Massachusetts, where he founded his practice. That would likely mean the end of his storied legal career.

The strain is clearly showing on Mr. Bailey. His face is haggard and tired, and his hands shake. He is still grieving the loss of his mother and wife.

But he refuses to give up his legal career. “I will continue to represent my existing clients with all appropriate vigor,” he said in a statement last week.

“He’s an old Marine, you know, and Lee’s not just going to lay down,” said Mr. Gelber. “He’d just as soon slug it out.”

Finkbeiner to port: Don’t aid Rossford

By Joshua Benton
Blade Staff Writer

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Toledo Mayor Carty Finkbeiner wants to make sure that the Toledo-Lucas County Port Authority doesn’t get involved in efforts to revive the Rossford arena-amphitheater project.

“I’m certainly going to stand in the way of the Toledo-Lucas County Port Authority even entertaining any thought of it,” he said. “It’s not their job to bail out projects outside the county of Lucas that may not have been as well thought out as they should have been in the first place.”

The mayor’s comments were made soon after the port board’s newest member, Thomas Schlachter, advocated some form of assistance for the Rossford project, with other port officials saying they would be willing to consider the idea.

G. Ray Medlin, Jr., the port board chairman, said he has not been approached about assisting Rossford but added that he has “always been an advocate for regional cooperation.”

For almost a decade, officials in Rossford have been planning the development of the Crossroads of America, the area south of I-75 and the Ohio Turnpike.

Last year, Mayor Mark Zuchowski announced the centerpiece of the development: a hockey arena and an amphitheater. Officials set up the Rossford Arena Amphitheater Authority to build the structures, and construction began last summer. Retail, hotel, and other developments would surround the complex.

But the arena authority has had trouble finding the funding necessary to construct the $48 million project. Construction was stopped in November when temporary financing ran out, and officials have been struggling to find a way to jump-start the project since.

Mr. Schlachter, a local developer, said this week the port authority should look into ways to assist the Rossford project. On Thursday, the Lucas County commissioners named Mr. Schlachter the newest member of the port board.

“I’m impressed with the potential of the Crossroads concept, and I hate to see anything in the area fail because it’s a black eye for the entire region,” Mr. Schlachter said.

The port authority can provide low-interest loans to development projects in the region through the Northwest Ohio Bond Fund. The authority has arranged financing deals for such major projects as the downtown headquarters of Owens-Corning and Manor Care.

Mr. Schlachter said he doesn’t yet have any specific plans for the port’s involvement in the Rossford arena project, and he hasn’t spoken with any other port board members about the subject. But some local officials seemed cautiously interested in the idea.

Mr. Medlin said that he had not been aware of Mr. Schlachter’s comments, but said they were worth considering.

“With Tom’s background in development, I should pay attention when he says something like that,” he said. “If he’s got some ideas, I think we should hear them out. It might behoove Lucas County, Wood County, the Regional Growth Partnership, and the port authority to listen.”

He said that no one has approached him about a port authority role in the Rossford project.

He quickly added that if the issue was raised, he would remove himself from all discussion and all votes because of his conflict of interest. Mr. Medlin is business development manager for The Lathrop Co., the Maumee-based contractor that is managing construction of the arena and amphitheater.

Mr. Finkbeiner opposes any assistance to the Rossford project, in part because it could provide competition for the Toledo Sports Arena and its major tenant, the Toledo Storm hockey team.

But Mr. Medlin said that, if it succeeds, the Rossford deal would be beneficial to all of northwest Ohio. “There are some people who would see the success of a project like that as a threat to their own economic well-being, and that’s very selfish,” Mr. Medlin said.

Mark Zyndorf, a member of the port board’s finance committee, said that port assistance to the Rossford project should be considered like any other. He said the port authority gets much of its funding through the fees it charges for bond issues and other financing services for projects outside Lucas County.

But Mr. Zyndorf said he doubts that the Rossford project would qualify for port authority assistance because of its lack of financial backing. “My guess is that it would lack the credit enhancement or guarantees we’d need to qualify,” he said.

James Hartung, the port authority’s president, would “neither confirm nor deny” that the authority is in talks with Rossford officials. He said it is a long-standing port authority policy to keep potential financing deals confidential. He did say that the Rossford site is “a wonderful location.”

“We believe that Toledo and Lucas County can best be served through the development and growth of the entire region,” he said. “We know that our focus is Lucas County, but our broader mission sends us beyond the political boundaries.”

Mr. Finkbeiner’s response: “Balderdash. The taxpayers of Lucas County and the city of Toledo expect the port board’s focus to be upon the county of Lucas and the city of Toledo. The port authority should not be bailing out projects in other jurisdictions.”

He said that because Rossford officials did not initially ask for assistance from the port authority, they should not expect any now that the project has hit hard times.

Mayor Zuchowski said recently that he hopes to “regionalize” the funding of the arena-amphitheater.

Lucas County commissioners Sandy Isenberg and Harry Barlos said that Mr. Schlachter never shared his views on the Rossford project while he was under consideration for appointment.

Ms. Isenberg said the idea should be looked at, “but I’m not advocating it.”

If the port authority is involved, financing could be arranged so that Lucas County would share with Wood County in tax revenues from the project, she added. “And Wood County itself has to look at this project. It’s in their back yard.”

Mr. Barlos echoed the statements of many local leaders, like Mr. Medlin, who have called for greater regional cooperation in economic development. But he said that the mechanisms of cooperation should be worked out before Rossford is assisted.

“I would look first at regionalizing the [port] authority,” Mr. Barlos said, “without closing the door on the idea of assistance” to Rossford.

Mr. Barlos said that the time may be coming to hold a “summit” between the various counties involved in the port authority to explore the issue of regionalization. “No one wants to see a project fail in any one of our neighbors,” he said. “Our prosperity depends on our neighbors.”

Aside from his involvement with Lathrop, Mr. Medlin has another tie to the Rossford project. He sat on the board of the Rossford Economic Growth Corporation, which did some of the planning for the arena project. His position on the board was based on his affiliation with the Northwest Ohio District Council of Carpenters, which has loaned $2.4 million to the Rossford project.

Mr. Medlin is the former executive director of the United Brotherhood of Carpenters health and safety fund.

Port board member Jim White, Jr., said he has heard of the idea and could not comment on it until “I know what kind of support they are talking about.”

Board member G. Opie Rollison said he could not comment because his law firm, Cooper, Walinski, and Cramer, represents the Rossford Transportation Improvement District, which is building the roads for the Crossroads project.

Other board members, along with Rossford officials, could not be reached for comment.

Don Jakeway, the president of the Regional Growth Partnership, which does economic development work in conjunction with the port authority, said no one had asked his organization to help Rossford. “The financial structuring seems to be where they’re having the most trouble, and I’m not sure we could really offer anything in that area,” he said.

Blade staff writer Brian Nearing contributed to this report.

Rossford arena-amphitheater project has troubled past, and no future in sight

By Joshua Benton and Brian Nearing
Blade Staff Writers

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In the last couple of weeks at the Blossom Music Center near Cleveland, you could have pogo-sticked under the stars to the B-52s or moshed to the Red Hot Chili Peppers.

At the Polaris Amphitheater in Columbus, you could have wigged out to the rootsy sounds of Phish or grooved to Sting.

And at the Pine Knob Music Theater north of Detroit, there were shows by Canadian rockers the Tragically Hip and country star Clint Black.

But on the site of the proposed Rossford amphitheater, where the country’s top name acts were also supposed to be playing this summer, there’s little more than a few steel beams, a construction trailer, and mounds and mounds of dirt.

Sixteen months ago, Rossford Mayor Mark Zuchowski announced his $48 million dream: a hockey arena and adjoining concert amphitheater to be located near the intersection of I-75 and the Ohio Turnpike. The arena-amphitheater project, he said, will push the so-called “Golden Triangle” area into the economic stratosphere, making it a destination site for miles around.

But today, more than a month after the amphitheater was supposed to hold its first concert, the project remains primarily on paper.

Financial analysts have told officials the deal is too risky, and local taxpayers have been reluctant to put their own money into the project.

While officials struggle to find one last way to save the millions already invested in the project – including the possibility of selling the entire complex – those who have given money are becoming increasingly interested in making sure their money hasn’t just been wasted.

Just two days ago, Perrysburg Township officials met with other project investors to find a way to keep their contribution to the complex from disappearing. But no agreement was reached, and if the project falls into more trouble, at least $5 million in township money could be gone.

“Our table is getting a little bare for the township,” said Nathan Hagemeister, a Perrysburg Township trustee and a member of the Rossford Arena Amphitheater Authority board. “We want to help avoid the collapse of this project.”

From the start, the arena-amphitheater project was handled by a small group of people.

It started in 1994, with the creation of the Rossford Economic Growth Corporation, a private group formed by the city of Rossford to develop the Golden Triangle, the area south of the two interstates whose access to highways had made it a sought after area for development.

In a 1995 memo to a potential tenant, Mr. Zuchowski called the growth corporation “a shadow organization [that] has been quietly and efficiently arranging options on a large assemblage of this land.”

The corporation’s board members included representatives from some of the area’s heaviest hitters in development: Toledo Edison, Lathrop Co., SSOE, Inc., and the Northwest Ohio District Council of Carpenters.

The growth corporation considered a variety of plans for the area, including an outdoors retail center and a gambling parlor. But over time, they came to focus on an arena and an amphitheater.

Purchase options were assembled on the land starting in June, 1997, according to corporation records supplied to The Blade. One of the first to option land was township Trustee William Miller, who signed options July 21, 1997, and Oct. 9, 1997.

Under the option agreements, the growth corporation had to purchase the land within two years, or the sellers could keep the option payments. Records supplied by the growth corporation do not indicate how much was spent on options.

Township residents have questioned at public meetings whether Mr. Miller was engaged in a conflict of interest because he stands to profit from anticipated land sales in that area, which they now call the “Crossroads of America.”

Last month at a township meeting, he acknowledged to an audience member that he had sold a portion of his land for $600,000.

Linda Holmes, Wood County assistant prosecutor, who attended a Perrysburg Township meeting last month when the issue was raised, said Thursday that she cannot investigate until she gets a written request from the township.

Mr. Miller has said he has no conflict, since he did not vote when the township decided to buy the bonds from the Rossford Transportation Improvement District, which undertook construction of the roads serving the area. Mr. Miller was a holder of TID bonds. But he did vote to loan $5 million to the arena authority to get construction going.

“I have heard this fact and that fact. There are some people who feel that something is wrong,” Mrs. Holmes said. “We certainly thought that we would be asked to investigate.”

The clock was ticking on those land options when, on Feb. 23, 1999, Rossford city officials created the Rossford Arena Amphitheater Authority to finance and run the project.

Just four days later, plans for the $48 million arena and amphitheater complex were announced. Ed Reiter, chairman of Mid-Am Bank, said the project should be able to attract necessary financing, likely at a 6.5 percent interest rate.

Things moved quickly. A month after the authority was created, it approved a deal with the Detroit Red Wings, owned by the Ilitch family, to bring the hockey club’s farm team there, and with Olympic Entertainment, also owned by the Ilitches, to run the complex.

The arena authority announced plans to issue $48 million in bonds by May of last year. Excavation work on the site began May 19, 1999, with temporary financing in the form of a $2.4 million loan from the Northwest Ohio District Council of Carpenters and, later, $5 million from the township.

Several members of the growth corporation board began to bring business to their companies.

For example, growth corporation President Dick Lee is vice president for business development at Lathrop, the Toledo construction company that got the project’s no-bid construction management contract.

Another growth corporation member, David Shapiro, is a vice president at SSOE Inc., an architectural design firm in Toledo hired to do design work.

Mr. Reiter, vice president of the growth corporation, is chairman of MidAm Bank, which is the growth corporation’s depository bank. In addition, MidAm invested in bonds issued by the Rossford Transportation Improvement District, which spent $6.8 million to build a road and water and sewer lines around the project.

Toledo Edison agreed to loan the growth corporation up to $2 million, using some of its property as collateral. In exchange, Toledo Edison got exclusive right to supply power to the development.

Toledo Edison is getting repaid by the growth corporation, utility spokesman Richard Wilkins said Friday.

“The most recent payment was $500,000…made within the last month or so,” he said. “We are getting repaid as expected.”

Mr. Wilkins said that Toledo Edison gets involved in a wide variety of economic development projects in the area, and that the Rossford project is just one of many.

He said that the growth corporation is using money it has made from selling land to developers interested in putting up businesses near the project.

Mr. Lee and Mr. Shapiro did not return telephone calls from The Blade.

Mr. Reiter declined comment through a spokeswoman. “He doesn’t think commenting would be in the best interests of the bank,” said spokeswoman Darlene Minnik.

In early fall of last year, the authority announced it was buying 127 acres of land that had been optioned by the growth corporation. But the authority was already running low on cash. Of the original $7.4 million it had from the carpenters’ union and Perrysburg Township, only about $2 million was left by Oct. 5, according to Mr. Zuchowski.

After Lathrop Co. filed a lien against the project for not being paid for at least some of its work, the arena authority agreed in early October to give Lathrop a mortgage against the property.

The carpenters’ union later that month offered to put up $2.2 million loan for the project, money that would be used to help buy 55 acres of land near the arena site, but that deal never closed. A call to the union for comment was not returned.

All of the temporary loans were supposed to be paid off as soon as the project got permanent financing through a bond issue. But that never happened.

It turned out Mr. Reiter’s prediction of a 6.5 per cent interest rate was far too low. The bond rating firm Standard & Poor’s gave the project a less-than-perfect rating, which meant the project was forced to deal with a double-digit interest rate. (At the arena authority’s request, Standard & Poor’s will not release its financial analysis of the project.)

With interest rates that high, the project was not doable because the arena and amphitheater wouldn’t generate enough money to pay off the debt each year. Rossford officials tried to get more backing for the project to make it more attractive, but with little success.

On Nov. 23, 1999, construction stopped because there was no money to pay for it. Work was roughly 20 per cent complete. The project has been idle since.

Phil Dombey, Perrysburg Township’s counsel, said a month later that the township faces a worst-case loss of between $10 million and $15 million.

The arena authority’s bond underwriting firm, Stifel Nicolaus and Co. of St. Louis, whose job it was to convince Standard & Poors to give the project a good rating, and hence a lower interest rate, was fired sometime before early December. Company representatives did not return a call for comment last week.

The last investor to come to the table, after serious questions had been raised about the project’s finances, was a Detroit-based corporation called Carpenters Success. It loaned the arena authority $1.7 at 9.75 per cent on March 10, 2000, about four months after construction had stopped for lack of money.

The money was loaned so the authority could buy 55 nearby acres that later would be sold to developers who want to put businesses there.

At the time, Rossford officials said that Carpenters Success was affiliated with the carpenters’ union in Detroit. And on Friday, Vince Langevin, the arena authority’s treasurer and Rossford administrator, described Carpenters Success as “a Detroit version of the carpenters union.”

Asked to explain what the group was, Mr. Langevin responded: “I don’t know, I think it’s a pension fund. It’s the name of a pension fund. I don’t know.”

But Mike Davis, chairman of the investment committee of the Michigan Regional Council of Carpenters and business representative for a Detroit Carpenters Local 687, said Thursday he had never heard of the group. “We are not invested in the Rossford project,” Mr. Davis said.

When told of Mr. Davis’s comments, Mr. Langevin said he didn’t know the names of any of the group’s leaders or backers. He said he knew the name of the group’s lawyer, but refused to say who that was.

“It’s not relevant,” he said. “I don’t think it’s important.”

Mr. Zuchowski, the Rossford mayor and president of the arena authority, said he didn’t know the details of who was behind Carpenters Success, but he said he believed it was a joint effort of northwest Ohio’s and Detroit’s carpenters unions. “It’s just a corporation that was founded to help us out and get the project done,” he said. “I don’t know their business as much as they do, but they have funds available to invest in projects like this.”

Robert Bernius, a spokesman for the Northwest Ohio District Carpenters, did not return a telephone call seeking comment on the issue.

According to records from the Michigan Secretary of State’s office, Carpenters Success was incorporated on March 9 – the day before its loan to the arena authority. It was incorporated by C. David Bargamian, a Detroit lawyer.

On Friday, Mr. Bargamian said he was merely the group’s attorney and did not want to reveal who he works for. “I don’t know if it’s appropriate for me to comment on my client’s business,” he said

He said he would ask his clients if they wanted to reveal themselves and contact The Blade. As of yesterday, they had not.

But Carpenters Success’s role in the arena project didn’t stop with its March loan. It is currently in negotiations that will determine whether Perrysburg Township will risk losing all of the $5 million it loaned to the arena authority last year.

It’s a complicated situation, but one that could leave township taxpayers financially hurt by more troubles in Rossford.

In 1998, the township purchased $4.6 million worth of bond anticipation notes from the Rossford Transportation Improvement District, which used the money to build a 1.7-mile road from S.R. 795 to U.S. 20/23 through the Golden Triangle and install water and sewer lines. A bond anticipation note is short-term financing used as a bridge until a long-term bond is sold.

When the arena project backers needed to find temporary financing to start construction last year, a deal was struck between Perrysburg Township and MidAm Bank. The bank agreed to purchase the $4.6 million in TID bonds so the township could then use the money to loan $5 million to the arena authority.

But when MidAm signed the deal, it made the township agree to buy the bonds back at the same cost this summer. In essence, the bank agreed to loan the township $4.6 million, interest-free, for one year.

Had the arena authority’s financing plan worked as officials had hoped, the township would have been repaid for its loan to the authority, and it then would have had the money to buy back the bonds from the bank.

But because the arena’s financing has never materialized, the township has been forced to scramble for cash. On Monday, trustees voted 2-0 to sell $4.6 million worth of its certificates of deposit to buy back the note and avoid paying $800 a day in interest on the loan. Mr. Miller abstained; Mr. Hagemeister and trustee Richard Britten okayed the move.

This was not the first time the township had taken over a local bank’s obligation to the project. Last month, it came up with $1.3 million to buy out Fifth Third Bank’s share of the transportation district’s note. The TID was about to miss a payment on the note and the township bought it from the bank to keep the project from defaulting.

The TID has had trouble collecting the property assessments charged to landowners in the district to pay for the roadway and water and sewer improvements.

Several landowners have sued over the size of the assessments.

On Friday, one woman sued after being assessed more than $280,000 for her property, which she contends is landlocked and not touched by any of the roadways in the development.

In any event, the loan the township made to the arena authority is not secured.

If the authority were to declare bankruptcy or otherwise collapse, the township would risk losing its entire $5 million investment, Mr. Hagemeister said.

Other investors in the project have mortgage security. Those investors – including Lathrop, Toledo Edison parent First Energy Corp., and Carpenters Success – will be able to claim ownership of the land and any other assets if the authority defaults.

Township trustees have been trying to find a way to secure their millions. The latest plan: give the township a mortgage on the 55 acres of land purchased in March. The mortgage would be for $5.2 million: the principle plus $200,000 in missed interest payments. That would mean that the property, purchased a few months ago for $1.7 million, would be mortgaged for significantly more than its assessed value.

But Carpenters Success already has a mortgage on the land, and would have to approve a second mortgage holder, Rossford law director Keith Wilkowski said.

On Friday, Mr. Hagemeister met with representatives of Carpenters Success and Mr. Wilkowski to iron out a deal to be presented to township trustees at their meeting tomorrow.

“If we can’t get this, we’re back to square one,” Mr. Hagemeister said before the meeting Friday.

Afterward, Mr. Wilkowski said no deal had been reached and that negotiations could take another month. Mr. Wilkowski repeated that Carpenters Success is a joint Ohio-Michigan union effort, but refused to give any details. He said that Carpenters Success was represented at the meeting by an unidentified lawyer, not one of the principals or Mr. Bargamian.

Mr. Hagemeister did not return phone calls after the meeting.

Earlier this year, officials considered something that was never before an option – building only the amphitheater and putting off the arena until later.

The new plan by Seasongood and Mayer, a Cincinnati bond counsel hired by the authority last year after they fired their original counsel, would be accomplished through a smaller bond issue of only $10 million to $15 million.

And instead of being backed by the project’s own revenues – which could be influenced by market conditions – it would be backed by Rossford and Perrysburg Township.

If the project couldn’t pay off the debt, the two governments would guarantee to make up the difference, a deal that would make the bonds much more attractive to investors and allow them to be sold at a lower interest rate. Once the amphitheater was built, officials would then turn their attention to an arena.

After a year of financial troubles, this was viewed by some as a last-ditch bailout plan. At a March meeting of township trustees, Andrew Brossart of Seasongood and Mayer told trustees: “This is the last way we can figure on how to finance this.”

The proposal promised a financial position for the project. While a new arena would provide a year-round venue, it would face a long established competitor in the Toledo Sports Arena, whose major tenant, the Toledo Storm, would fight for public attention with the Red Wings affiliate, the bond counsel reasoned.

In contrast, an amphitheater would have no competitor nearer than Pine Knob. And thanks to their low cost of maintenance, amphitheaters are generally much more profitable than arenas.

According to an Arthur Andersen analysis of the proposed Rossford complex, the amphitheater would produce more than $2.7 million in revenues in its fifth year, against only $287,000 in expenses. In contrast, the arena would produce almost $4.7 million in revenues, but against almost $2.8 million in costs.

But some residents of Rossford and the township were outraged at the idea of spending tax money on the arena. The township residents felt their trustees had invested enough in the project already, given the fact the investment was unsecured. City residents said they believed they had been deceived – Mr. Zuchowski had assured them repeatedly that no local tax dollars would be used.

“It is misleading for anyone to say that the amphitheater/arena project uses City of Rossford tax dollars,” city officials wrote last year in a “Special Notice to the Citizens of Rossford.” “The amphitheater/arena project will pay for itself – using future tax revenues from the project itself to pay for the bonds,” the notice assured.

Dozens of angry residents showed up at meetings of the city council and the township trustees, calling taxpayers “sitting ducks” about to be taken by a bad deal.

The plan to use tax money to back the bonds died after township trustees rejected it. “Everyone was opposed to that,” Mr. Hagemeister said. “We were opposed to putting any more Perrysburg Township money into the project.”

Now, much of the optimism of a year ago is gone. Mr. Langevin said he wouldn’t venture a timetable for when a new deal might be announced. “We’re just still trying to put the whole bundle together,” he said.

At Monday’s arena authority meeting, there was even some discussion of selling the project off to a private group. “We have been contacted by several parties who have said they would buy one or the other [facility] or both,” Mr. Langevin said later. “Our comment was everything is for sale if the price is right.”

Mr. Langevin said that if everyone who has invested money in the project “can be made whole, that’s the selling price.”

Meanwhile, waiting for some sort of resolution of the situation is the Ilitch family.

Led by Mike Ilitch, who founded the Little Caesars pizza chain and owns the Detroit Tigers and Red Wings, the family is slated to play a major part in the Rossford deal. Aside from their commitment to bring a minor league hockey team to the arena, one of their companies, Olympia Entertainment, has signed a deal to manage both the arena and the amphitheater.

Under the deal originally signed, the Ilitch companies stood to make millions, including portions of all food sales, suite license fees, and naming rights fees.

In addition, the original deal included significant financial penalties for the authority if an arena was not ready to start hosting hockey by November of 2000. Those penalties were to compensate the Red Wings for most of their costs. Over the course of a season, that could total $3 million.

Rossford officials said in January that the deal with the Red Wings was being renegotiated to improve the penalty agreement.

Mr. Langevin said the penalties had been eliminated entirely. “They are very supportive,” he said. “They’ve said that whatever we need, they’d help on. Except for giving us $47 million, of course.”

Representatives of the Red Wings and Olympia could not be reached for interviews, but Mark Corey, group vice president for Olympia, issued a statement through a spokeswoman.

“We were not aware it’s for sale, but we are keeping the lines of communication open with the city,” he said. “We are aware that they are searching for financing alternatives and are hopeful that they will be successful.”

So are Rossford officials, who haven’t given up hope. They acknowledge that things haven’t gone the way they planned.

“I’ve certainly learned a lot from this,” Mr. Zuchowski, the Rossford mayor, said. “A lot of things were prematurely announced, and it didn’t happen. We weren’t able to get the financing together.”

He said that the pressure to have an arena open for this winter’s hockey season forced Rossford to rush into things and move too quickly.

“That’s the mistake we made, letting the deadline dictate how we do things,” he said.

Some things, he said, were done out of the proper sequence: “We shouldn’t have started construction until we got financing.”

Mr. Zuchowski hopes that Wood County or the state of Ohio might be convinced to contribute backing for the project, although the county commissioners have publicly indicated they do not intend to risk their excellent bond rating or reserves on the project. He said the project needs to be “regionalized” and draw upon the resources of something bigger than his small city and the township.

The mayor said that getting Rossford and township taxpayers to back the issue with their own money is still possible.

Meanwhile, development at Crossroads of America is continuing, with construction already under way on a shopping center. More retail development is in the works, along with long-term plans for a movie theater complex and hotels.

“The ironic part of this is that the arena and amphitheater were supposed to be the magnets to draw development,” Mr. Langevin said. “But the development is coming anyway.”

Mr. Zuchowski said Rossford has learned its lessons.

“We’re making a more disciplined effort at putting baby steps together,” the mayor said.”We’ve got nothing to report at this time. We’re still trying, still working hard, and hopefully we’ll be able to announce something soon.”