Conneaut Lake Park is overseen by a charitable trust and should be exempt from paying property taxes, the state Attorney General's Office said Wednesday in a bid to halt a looming sheriff's sale of the storied amusement park.
The filing marks the first time the Attorney General's Office has argued that the park should be tax-exempt.
“I'm pleased that they feel protective of the public trust. To me, that's really key. It's great to see that happening,” said Mark Turner, executive director of the seven-member Trustees of Conneaut Lake Park Inc. board.
At stake are more than $925,000 in back taxes, penalties and interest owed to the county, Sadsbury and Summit townships and the Conneaut School District. All four taxing bodies support a sheriff's sale, scheduled for Nov. 7, to recoup back taxes.
“We're leaving this to our attorney and other attorneys in court and the attorney general to figure all of this out,” Crawford County Commission Chairman Francis Weiderspahn Jr. said.
The board of trustees said it may seek Chapter 11 bankruptcy protection to avoid a sheriff's sale so it can work out a plan to reorganize and pay off debts. Turner said the board wants to avoid a bankruptcy filing, as it could cost $250,000 in fees.
“We hate to do that,” said Turner, also the executive director of the Economic Progress Alliance of Crawford County, which oversees park operations. “We know what the ramifications are. We could enter Chapter 11 and leave it solvent, but we really hate to take that route.”
The Attorney General's Office acts as a guardian for the state's nonprofits. Last year, it demanded the removal and reorganization of the park's board of trustees, saying that it failed to insure two historic buildings destroyed by fire and fell behind on taxes.
The board resigned June 12 under a consent decree with the Attorney General's Office, and a new board formed.
As part of the decree, the old board's insurance company agreed to pay $200,000 to the new board for park expenses. Turner said the board proposed using $100,000 to put a dent in the back taxes, but the taxing bodies rejected that offer.
In its filing with Crawford County Court on Wednesday, the attorney general's office said the court ruled in 2003 that the park “constitutes a charitable trust,” and that no one has ever challenged that designation, though “some portions of the park may be taxable” depending on how they're used.
The Attorney General's Office said that if the sheriff's sale proceeds, any buyer must use the property as a public park because of the trust.
The trustees want to convert the park from a summer attraction to a year-round venue under a 10-year plan that could cost $10 million to $20 million.
