IN THE SUPREME COURT OF OHIO MOTION TO INTERVENE OF OSTER CONSTRUCTION, INC., BEVAT INVESTMENTS, LLC, AND K. HOVNANIAN OSTER HOMES, LLC

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1 IN THE SUPREME COURT OF OHIO The City of Lorain, Ohio, et al., Original Action in Mandamus Realtors, V. Case No Mark Stewart Lorain County Auditor, Respondent. MOTION TO INTERVENE OF OSTER CONSTRUCTION, INC., BEVAT INVESTMENTS, LLC, AND K. HOVNANIAN OSTER HOMES, LLC Thomas W. Janas # TRIGILIO & STEPHENSON, P.L.L Cooper Foster Park Road, W-Suite 102 Lorain, Ohio Tel: 440/ ; Fax 440/ j centurytel. net COUNSEL FOR OSTER CONSTRUCTION, INC., BEVAT INVESTMENTS, LLC AND K. HOVNANIAN OSTER HOMES, LLC Alexandra T. Schimmer ( ) (Counsel of Record) Scott J. Ziance ( ) Vorys, Sater, Seymour and Pease, LLP 52 E. Gay Street - P.O. Box 1008 Columbus, Ohio Tel: 614/ ; Fax 614/ atschimmer@vorys.com siziance@vorxs.com Michael S. Gordon ( ) Vorys, Sater Seymour and Pease, LLP 2100 One Cleveland Center 1375 East Ninth Street Cleveland, Ohio Tel: 216/ ; Fax: 216/ msgordon@vorys.com

2 Mark R. Provenza ( ) Law Director, City of Lorain 200 West Erie Ave., 7' Floor Lorain, Ohio Tel: 440/ ; Fax: 440/ COUNSEL FOR RELATORS Subodh Chandra ( ) (Counsel of Record) Jaime Bouvier ( ) The Chandra Law Firm, LLC 1265 W. 611' Street., Suite 400 Cleveland, Ohio Tel: 216/ Chandra Tel: 216/ Bouvier Fax: 216/ stanfordalumni.ore jamie COUNSEL FOR RESPONDENT

3 BRIEF IN SUPPORT Oster Construction, Inc., an Ohio corporation, Bevat Investments, LLC, a Delaware Limited Liability Company, and K. Hovnanian Oster Homes, LLC, an Ohio limited liability company, by and through undersigned counsel, move this Honorable Court to intervene as parties pursuant to Civil Rule 24. It is represented that the Intervenors have an interest in the subject matter of this action, that their interest is not adequately represented by the existing parties, and that disposition of this case without intervention may impair their ability to protect their interest. It is further represented that Intervenors' claims and defenses have common questions of fact and law with the main cause of action, herein. Statement of Facts 1. Pursuant to R.C , et seq., the City of Lorain has created and operates a program for Community Reinvestment Areas ("CRAs") in the city. CRAs seek to improve existing properties and promote new construction by offering tax incentives. 2. One of the Community Reinvestment Areas in the City of Lorain known as CRA#4 was established by Ordinance and amended by Ordinance Oster Construction, Inc., Bevat Investments, LLC, and K. Hovnanian Oster Homes, LLC are currently, and have in the past been, engaged in the business of residential real estate development, construction and sales in Lorain's Community Reinvestment Area and specifically in CRA#4. 4. In 2006 and 2007, the City of Lorain's Housing Officer approved 28 applications from homeowners in CRA#3 and 328 applications in CRA#4. Said applications were certified by the

4 Housing Officer and forwarded to the Respondent, Lorain County Auditor, for placement on the tax exempt list. 5. On or about August 16, 2007, the Respondent, without authority to do so, rejected the applications and refused to place the properties on the tax exempt list, therein maintaining that Lorain's CRA program is fatally flawed as established and as administered. 6. Of the 328 CRA#4 applications rejected by the Respondent, Movants Oster Construction, Inc. and/or K. Hovnanian Oster Homes, LLC developed and sold the land and improvements to more than 50% of the home owners in question. 7. On or about December 11, 2007, the City of Lorain filed an Original Action for Mandamus in the Ohio Supreme Court, In said mandamus action the City of Lorain seeks an order compelling the Respondent to place the abovementioned properties on the tax exempt list. 8. A ruling in the mandamus action compelling the Respondent to place the properties on the tax exempt list will return the incentive for new residential construction in CRA districts. 9. As of January 16, 2008, the Movants continue to have a significant financial interest in Lorain's CRAs. Due to the nature of their business, ownership of real property by the Movants is not static and can change as residential development progresses; however, records of the Lorain County Auditor reveal the following: A. Oster Construction, Inc. owns more than 300 sublots and other land exceeding 100 acres in CRA#4. B. Bevat Investments, LLC owns two parcels of real estate totaling acres in CRA#4 that is projected for residential development. C. K. Hovnanian Oster Homes, LLC owns more than 40 sublots in CRA#4.

5 10. The ruling of this Honorable Court on the Mandamus action will have great financial impact on the Movants and no party to this cause of action adequately represents the interests of Oster Construction, Inc., Bevat Investments, LLC and K. Hovnanian Oster Homes, Inc. See attached Exhibit "A". Civil Rule 24(A)(2) Law and Argument Civil Rule 24(A)(2) affords a right to intervene when the following requirements are met: (1) The applicant claims an interest in the property or transaction that is the subject of the action, and (2) The applicant is situated such that disposition of the action may impede or impair the applicant's ability to protect that interest, and (3) The applicant's interest is not adequately represented by the existing parties. The Movants herein, Oster Construction, Inc., Bevat Investments, LLC, and K. Hovnanian Oster Homes, LLC, meet all of the requirement stated above. Specifically, they have an interest in "the property" in that all three Movants own real estate in CRA#4. Furthermore, by virtue of their business activity, they have an ongoing interest in "the transaction" which is the program and procedure for obtaining CRA tax exemptions in the City of Lorain. Movants also meet the second criteria for intervention. If the Ohio Supreme Court upheld the Respondent's refusal to honor the CRA applications that were approved and certified by the Housing Officer, it is foreseeable that this would have an adverse impact on new residential construction. Furthermore, other challenges would be controlled by stare decisis and pose a practical disadvantage to Movants. See Fouche v. Denihan (1990), 66 Ohio App. 3d 120. Finally, a review of the parties to the Mandamus action reveals that no party represents the interests of the Movants. The Respondent has refused to honor Lorain's CRA program and clearly

6 has a position diametrically opposed to the Movants. The Relators presently seek to compel the Auditor to place the properties on the tax exempt list; however, this does not automatically mean that they adequately represent the interests of the Movants. The City of Lorain is governed by elected officials who serve citizens with diverse interests in this pending matter, some divergent to that of the Movants. Furthermore, as elected officials change, as evidenced by the recent change in the office of Mayor for Lorain, so may the position the City takes in this litigation. Finally, none of the current parties to the mandamus action are representing their standing in this suit by virtue of being an owner of real property in the subject CRAs. Thus, neither the Relators, not the Respondent, adequately represents the interests of the Movants who own, develop and sell residential real estate in the CRAs. Civil Rule 24(B)(2) Civil Rule 24(B)(2) affords an opportunity to intervene when there is no "right" established under Rule 24(A). Permissive joinder as an intervening party is proper when the movant's defense or claim has a common question of law or fact with the main action. Herein, the Movants' claims and defenses maintain that the Respondent has exceeded his authority by unilaterally refusing to honor the applications for tax exemption. As such, Movants also qualify for permissive intervention under Civil Rule 24(B)(2). When considering the case law on the issue of intervention, it is clear that courts have held that Civil Rule 24 is to be liberally construed in favor of intervention. See State ex rel. Superamerica Groun v. Licking Cty. Board of Elections (1997), 80 Ohio St. 3d 182. When specifically applying intervention to issues involving real estate, courts have again liberally allowed intervention by persons who are "interested" by virtue of being a neighboring land owner or a citizen in the

7 community. See State ex rel. Strategic Capital Investors, LTD., v. James McCarthy, Auditor, et al. (1998), 126 Ohio App. 3d 237 and State ex rel. McCord, et al. V. Delaware County Board of Elections, et al. (2005), 106 Ohio St. 3d 346. The Ohio Supreme Court has examined this issue and granted, in the past, intervention to land owners in Lorain County. Specifically, in State ex rel. Committee for the Referendum of City of Lorain Ordinance No v. Lorain County Board of Elections, et al. (2002), 96 Ohio St. 3d 308, officers of Oster Construction, Inc. were granted intervention in a mandamus action that sought a referendum on Lorain City Ordinance No that rezoned property. This Honorable Court granted intervention, noting that Oster Construction, Inc. is "...a corporation engaged in the business of real estate development, construction, and sales..." and "...owns a portion of the real property rezoned by Ordinance No ". It is submitted that the facts and law supporting the grant of intervention in the above referenced case are applicable herein. Timeliness of Motion to Intervene and Attachment of Required Pleading A motion to intervene must be made timely. In this case, Respondent has been granted leave to answer on or before January 17, As such, the filing of this motion prior to Respondent's answer date clearly constitutes a timely filing. Also, it has been held that the filing of a motion to intervene after the filing of evidence and briefs by the parties is not timely. See State ex rel. Citizen Action for a Livable Montgomery v. Hamilton County Board of Elections (2007), 115 Ohio St. 3d 437. As there has been no submission of evidence or briefs by Realtors or Respondent herein, the motion to intervene is timely. Pursuant to Civil Rule 24(C), an Answer to the Action for Mandamus is attached hereto as Exhibit "B".

8 Conclusion/Prayer for Relief Wherefore, as intervention by the Movants is consistent with Civil Rule 24 and poses no detriment or prejudice to any party, it is respectfully submitted that the motion to intervene should be granted, forthwith. Respectfully submitted, Thomas W. Janas # TRIGILIO & STEPHENSON, P.L.L Cooper Foster Park Road, W-Suite 102 Lorain, Ohio PH: 440/ ;fax 440/ el.net Attorney for Movants Oster Construction, Inc., Bevat Investments, LLC, and K. Hovnanian Oster Homes, LLC Certificate of Service The ^dersigned certifies that a copy of the foregoing has been sent by regular U.S. mail on this I 6 day of January 2008 to the following: Alexandra T. Schinnner ( ) (Counsel of Record) Scott J. Ziance ( ) Vorys, Sater, Seymour and Pease, LLP 52 E. Gay Street - P.O. Box 1008 Columbus, Ohio

9 Michael S. Gordon ( ) Vorys, Sater Seymour and Pease, LLP 2100 One Cleveland Center 1375 East Ninth Street Cleveland, Ohio Mark R. Provenza ( ) Law Director, City of Lorain 200 West Erie Ave., 7t Floor Lorain, Ohio Subodh Chandra ( ) (Counsel of Record) Jaime Bouvier ( ) The Chandra Law Firm, LLC 1265 W. 61" Street., Suite 400 Cleveland, Ohio Thomas W. Janas # TRIGILIO & STEPHENSON, P.L.L. Attorney for Movants Oster Construction, Inc., Bevat Investments, LLC, and K. Hovnanian Oster Homes, LLC,

10 Exhibit "A" STATE OF OHIO COUNTY OF LORAIN : SS AFFIDAVIT OF THOMAS J. OSTER I, Thomas J. Oster, being first duly sworn, depose and say that: 1. I am the President of Oster Construction, Inc., Manager of Bevat Investments, LLC and Co-President of K. Hovnanian Oster Homes, LLC. Further, that as President, Manager and Co- President, respectively, I am duly authorized to execute this affidavit on behalf of said entities. 2. As of January 16, 2008, Oster Constructiop, Inc. owned more than 300 sublots and other land exceeding 100 acres in CRA#4. 3. As of January 16, 2008, Bevat Investments, LLC owned two parcels of real property totaling acres in CRA#4 that is projected to be residential development. 4: As of January 16, 2008, K. Hovnanian Oster Homes, LLC owned more than 40 sublots in CRA#4. 5. Of the 328 applications for tax abatement rejected by the Lorain County Auditor in CRA#4 and referenced in Relators' Original Action in Mandamus, Movants Oster Construction, Inc. and/or K. Hovnanian Oster Homes, LLC developed, constructed and sold the land and improvements to more than 50% of the home owners. 6. Tax exemptions on improvements to real estate established by the City of Lorain's Community Reinvestment Area legislation, has encouraged development and created a financial incentive to develop and own residential real estate. The refusal of the Lorain County Auditor to honor the applicants approved and certified by the Housing Officer directly affects the rights and interests of the Movant Intervenors as land owners and developers of residential real estate in CRA#4. 7. Substantial effort and expense have been expended to purchase real estate, obtain necessary rezoning, and submission of preliminary and final plans for residential development. This constitutes further evidence of Movants' plan for development in the future and their substantial interest in the property and transaction that is the subject of this mandamus action have read the Motion to Intervene and supporting memorandum of the Movants

11 herein and the facts and assertions contained therein are true to the best of my knowledge. FURTHER AFFIANT SAYETH NOT. ^A/2 7z4 (- HOMAS.OSTER, Authorized Representative /^- STATE OF OHIO COUNTY OF LORAIN SS. Sworn to and subscribed before me on this a day of January, NOTARY PUBLIC TH2'9E+ iai, W. satddbs, Natmry PuLeEi, Se.ce.a o"a Oiaio Wq Caasimis.siarc ias no Upiraeiadt Dpwe This Instrument Prepared By: Thoneas W. Janas, Esq. Trigilio & Stephenson, P.L.L Cooper Foster Park Road, Suite 102 Lorain, OH (440)

12 Exhibit "B" IN THE SUPREME COURT OF OHIO The City of Lorain, Ohio, et al., Original Action in Mandamus Realtors, V. Case No Mark Stewart Lorain County Auditor, Respondent. ANSWER OF OSTER CONSTRUCTION, INC., BEVAT INVESTMENTS, LLC, AND K. HOVNANIAN OSTER HOMES, LLC Thomas W. Janas # TRIGILIO & STEPHENSON, P.L.L Cooper Foster Park Road, W-Suite 102 Lorain, Ohio Tel: 440/ ; Fax 440/ centurvtel.net COUNSEL FOR OSTER CONSTRUCTION, INC., BEVAT INVESTMENTS, LLC AND K. HOVNANIAN OSTER HOMES, LLC

13 FIRST DEFENSE 1. The answering Intervenors admit the statements and allegations contained in Paragraphs 1 through 18 of the Original Action in Mandamus. SECOND DEFENSE 2. The answering Intervenors claim that Respondent's refusal to approve the tax exemptions is based upon his determination that the City of Lorain's CRA program is "fatally flawed" as created and administered thereby resulting in an unlawful administrative determination of underlying constitutionality/legality of the ordinances and it's application. THIRD DEFENSE 3. Movants reserve the right to assert any other defenses or claims, at law or in equity, that may become known to them during the pendency of this action. WHEREFORE, Movants pray that the original action for mandamus be granted and a writ issue - f ^ Thomas W. Janas # TRIGILIO & STEPHENSON, P.L.L. Attorney for Movants Oster Construction, Inc., Bevat Investments, LLC, and K. Hovnanian Oster Homes, LLC,