Who Sold Out the Towpath?

A 100-mile journey stalls within sight of its goal amid accusations of fraud

No public undertaking in Cleveland provokes the same righteous enthusiasm as the Ohio & Erie Canal Towpath Trail. The 101-mile recreational pathway — which, when complete, will connect Cleveland's lake shore to Central Ohio — is a key feature of one of the most ambitious park projects in state history. The trail stirs the hopes of cyclists, naturalists, history buffs, hikers and, of course, politicians.

An eager public has waited patiently; organizers of the Towpath Trail have spent almost two decades collecting money and buying land for the pathway, which runs through the Cuyahoga Valley National Park and along the Cuyahoga River. But, while slow, the project had encountered remarkably few obstacles or controversies — until recent months — in the six-mile stretch inside Cuyahoga County.

In January, news emerged that the planned trail crossed through radioactive land that still needs clean-up to avoid long-term exposure hazards. In the middle of the 20th century, employees at the former Harshaw Chemical plant, near the Harvard-Denison Bridge in Cleveland, had worked with uranium to develop atomic weapons, and their labor had poisoned the surrounding ground with toxic waste. While lingering contamination doesn't pose an immediate health risk, the Army Corps of Engineers announced that the cleansing could take five years and thus stall the trail project.

More damaging, however, might be reports of another type of toxicity.

The most recent land deal for the trail, involving 11 acres in the Flats, has raised allegations of rigged grant awards and inflated real-estate appraisals, and questions about accountability. At the center of the controversy are the two developers who owned the parcels and Tim Donovan, director of the nonprofit Ohio Canal Corridor and one of the most ardent and longest-serving advocates of the project.

Donovan, in an interview this week with Scene, says he has been the target of a smear campaign and denies that he tipped a recent grant-award process in his favor.

"I've been falsely accused," says Donovan. He says he doesn't understand the criticisms, which he calls attacks, but is suspicious of his detractors. "The accusations could go back to the people slinging my way. What do they want? Money? That's a simple motive."

Local officials who oversaw the grant awards now want to put any controversy behind them. Cuyahoga County represents the final piece of the Towpath Trail; 88 of the 101 miles of the path are complete and already attract hundreds of thousands of people each year. It would be embarrassing, to say the least, to see this grand project stall in Cleveland.

"I really want to see it finished," says David Beach, a local environmentalist who has tried to mediate the dispute. Beach calls the pathway "the most important recreational trail in the Midwest."

Few would argue against the worthiness of the entire canal corridor undertaking, which includes the Towpath Trail as a key element. 

Built between 1825 and 1832, the Ohio & Erie Canal allowed barges to travel deep into the state and included a parallel towpath for boat-tugging mules. After decades of neglect, conservationists focused on fixing up the best-preserved parts of the canal, earning a "national heritage corridor" designation in 1996.

Donovan, a former public-relations staffer under then-Cleveland Mayor George Voinovich, has headed the Ohio Canal Corridor since 1990.  While Akron nonprofit administrator Daniel M. Rice has focused on developing the canal park in Summit, Stark and Tuscarawas counties, Donovan directs the project in Cuyahoga County and spends his time lobbying politicians and donors. In the interview with Scene, he boasted that he once got former Governor Bob Taft to agree to a funding deal during a leisurely bike ride.

The recent controversy can be traced back to a couple of unremarkable land purchases on the Scranton Peninsula, in the industrial Flats. In 1988, Heritage Development, a subsidiary of the Wolstein real-estate empire, purchased a five-acre riverfront property along Scranton Road for $2.5 million. In 2005, Heritage petitioned the Cuyahoga County Board of Revision to reduce the value of the land for tax purposes. The board agreed and set the value at $1.3 million, or $5.78 per square foot.

In 2005, John Ferchill's Riverside Residential Associates bought a neighboring, six-acre piece of riverfront land from Fifth Third Bank for $2.6 million. And like Heritage, Riverside asked for a reassessment of the property's value. The Board of Revision agreed to a fair market value of $1 million, or $3.75 per square foot.

The two parcels create a fork that sends one path upward toward Whiskey Island and the lake, and another path to the proposed Canal Basin Park (currently city-owned parking lots under the Detroit-Superior bridge). A county official, Paul Alsenas, had tried to set up a reported $2.9 million deal for Ferchill's land about four years ago, but it fell through. However, with a floundering economy bringing a halt to downtown construction in 2009, the developers dangled the land to prospective buyers.

That's where the Trust for Public Land, a national nonprofit land-conservation organization, enters the picture. Working with the Ohio Canal Corridor, the TPL worked out a deal for the land with both developers and by August 2009 had an option for $4.8 million — $2.4 million each for Ferchill and the Wolsteins. In both cases it was slightly less than they'd paid, but much more than the county considered the land to be worth for tax purposes.

TPL then hired a Parma-based appraiser to assess the land. She compared the vacant riverside properties to Warehouse District parking lots, a riverfront cement terminal and parcels where buildings were either set for demolition or already cleared, and concluded that the parcels were worth a combined $11 million — $6 million more than the already negotiated and seemingly generous price.

Still, with the appraisals in hand, TPL and Donovan's OCC could seek a grant from the state to complete the transaction.

In October 2009, 19 local nonprofits competed for roughly $6 million in state money from the Clean Ohio Fund, a voter-approved $400 million grant program that provides funding for conservation projects. The grant applications were reviewed by the Cuyahoga County Natural Resources Assistance Council (NRAC). Donovan was one of the council's 11 appointees, and as such, had to "score" the 19 proposals. The proposals included wetland and creek conservation projects, an expansion of a small local museum, and the Ohio Canal Corridor and Trust for Public Land's purchase of the two Flats properties.

The scoring process to determine which groups get money is complex and highly subjective, NRAC members say. On October 14, the council members met to share their scores. Donovan's scores shocked a few members.

"I'm looking at the [scores] as the meeting is beginning," recalls Alsenas, director of the Cuyahoga County Planning Commission, "and I notice everybody's scores. What I noticed was that Tim had very low scores for every other project — the lowest or second-lowest scores for every other project. The project he had submitted, he had scored very, very high. I said 'Whoa — this is an anomaly.'"

Alsenas and another member, a volunteer conservationist who declined to comment for this story, refused to submit their scores at the meeting in protest.

Alsenas stresses that he supports the Towpath project. But the scores disturbed him, he says, and without the time to analyze the stats, he declined to participate.

"I was definitely troubled," says Alsenas. "When you [sit] on that board, you have a duty to act as if nothing else matters but promoting the program and its rules and how it should happen. I have a sacred duty to score [projects] as objectively as possible."

Donovan admits to giving his own project high ranks because, as he sees it, many of the other proposals complement the canal project.

Minutes from the meeting show that Donovan suggested the council move to ratify the rest of the scores. Donovan says critics have unfairly accused him of rushing to vote and that there was ample time for discussion.

Whatever the case, the council voted, and Donovan got the money he needed.

But it came at a price: In December, a county board refused to reappoint Donovan to NRAC. In a meeting to determine whether Donovan should be reappointed to the council, one dissenting member — Moreland Hills Mayor Susan Renda — said she would not support Donovan because of the scores he'd submitted at the October session.

"Having served on the NRAC board, and just once, I would say that there were some anomalies in voting in the past session that made me uncomfortable with supporting Mr. Donovan," said Renda at the reappointment meeting.  "I don't want to be negative, but my concern is that when the [grant score sheet] goes to the state, that there will be concerns with it, and I think it reflects badly on our board."

Robert Valerian, board director for the Cleveland Rowing Foundation, was more blunt. The rowing foundation was among the 19 groups seeking funds, and in a December 7 letter to a state official who oversees the grant awards, Valerian wrote, "The scoring sheets reveal that [Donovan] appears to have manipulated the voting process to ensure his own project would get funded."

Also in December, local lawyer Daniel Wright, who says he represents a "whistle blower," challenged David Beach, the scholarly environmentalist who chairs the scoring council, to rectify the perceived wrongdoing. Wright also questions the deal to buy the land in the Flats. The appraisals, Wright wrote in a letter to the NRAC, raise "questions as to the veracity of the Ohio Canal Corridor's application and the integrity of the process used by the Cuyahoga County Natural Resources Assistance Council at the time when the public's confidence in Cuyahoga County government is at an all-time low."

In February, Rich Cochran, president and CEO of the Western Reserve Land Conservancy, spelled out similar concerns in an e-mail to Beach: "The point here is fairness, and it is the NRAC's job to create a level playing field. When appraisals are clearly inflated, that by definition violates that principle. The integrity of the entire round was compromised by the inflated appraisals, by the egregious scoring of interested parties, by the rush to vote on the ranking that stymied a discussion and alarmed Paul Alsenas so much he refused to vote.

"I urge you to reconsider," continued Cochran. "At the very least, OCC should not be awarded more than 29 percent of a reasonable land value. At best, this entire round should be revisited. We are only as good as our worst decision, and in this case, that is pretty bad. We feel that this decision is damaging our organization and our mission, and it is our fiduciary obligation to pursue this such that we are treated fairly."

Critics have also complained to state administrator Michael Miller of the Ohio Public Works Commission and other local and state officials about the disparate appraisal numbers.

Beach notes repeatedly in an interview with Scene that he and the other NRAC members are just volunteers. But he's had no choice but to deal with the fallout.

"I don't have the capacity to confirm the facts independently," he wrote to other officials in February. "But I am aware that land appraisal is more of an art than a science — and that there can [be] differing opinions on the value of unusual parcels, such as those in the Flats of Cleveland."

At a February meeting, Beach took on this first issue: Donovan's scores. In a nearly three-hour-long affair, Beach analyzed Donovan's scores and noted that if certain reforms were adopted to avoid any seeming manipulation, Donovan's project still would have received full funding.

And if Donovan's voting for his own project seemed unseemly, it wasn't unheard of: Other NRAC members have had organizations in line for money.

Voted off the council two months earlier, Donovan watched silently from the audience.

Two Trust for Public Land officials who spoke to Scene defended the appraisals and expressed dismay that doubts had been cast over the legitimacy of their work. "You can't go to your appraiser and suggest a value," says David Vasarhelyi. "It's unethical, immoral — it's illegal."

That's true, but it's also unlikely to placate the critics.

Wright's law firm requested copies of public documents from the Board of Revisions to examine how the developers got their taxes lowered. But there was a problem: The 2005 appraisal of developer Ferchill's property was missing from the file. Even stranger, Wright was informed that Ferchill had ordered the appraiser not to release a copy of the document missing from the public record.

"We have reason to believe that [the requesting lawyer] and his client are involved in a fraudulent act that we are having investigated by the proper authorities at this time," wrote Ferchill in a letter distributed to local and state officials. "We do not wish to be complicit in the matter and appreciate your cooperation."

Beach too has criticized Wright, calling him a "mystery" lawyer in an interview and at last month's NRAC meeting. Wright has refused to identify his client. He also declined an interview for this story. In a letter to Beach, he stated that the client is fearful of retaliation and pointed to the Ferchill letter. (Ferchill did not return a call from Scene seeking comment).

The deepening controversy has stalled the grant award, and Donovan thinks other nonprofits tried to sabotage the entire process in hopes of securing dollars for their causes. TPL officials say they are awaiting a $500,000 chunk of funding from a state to finish the deal, but that agency is reviewing the challenged appraisals.

Donovan has received support from city and business officials (an OCC board member called the claims against Donovan "scurrilous"). Donovan says he continues to work to wrangle millions in competitive grant money. He admits that he worries about the negative attention, but believes his efforts to see the Towpath Trail complete will redeem him. He cites an old saying: Don't just look at people's lips; look at their feet.

"It's about action," says Donovan. "Look at my lips and look at my feet — they're going in the same direction."

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