The organization that puts on the annual Cleveland Boat Show asked a judge to appoint a receiver to oversee the the company that runs the now-closed I-X Center.
The Lake Erie Marine Trades Association, which puts on the Progressive Cleveland Boat Show and Fishing Expo, in its motion pointed to statements I-X Center Corp. has made that said it fell behind on rent payments to the city of Cleveland and other obligations.
I-X Center Corp. announced in September that it was closing the 2.2 million square-foot facility, citing the coronavirus pandemic’s financial toll on the events business after government officials either banned or strongly dissuaded large gatherings.
However, despite claims of financial problems, the company remains a going concern, particularly after leasing warehouse space, stated the motion filed Friday.
The association, which had a contract with I-X Center Corp. to host the boat show at the facility every January through 2024, asked Cuyahoga County Common Pleas Judge Michael Russo to appoint a receiver to ensure the company’s assets are protected so it can follow through with any event contracts and pay any damages if the court finds it violated a contract. It asked the judge to appoint property manager Zak Burkons, who has worked as a receiver in other cases.
“It appears that I-X Center Corporation has decided to simply change its business model and sublease warehouse space (in part of its space not previously used for the events) and to unilaterally cancel all of its contracts for events, without good cause, rather than honoring the terms of the contracts it previously entered,” association attorney Joseph Burke wrote.
The city has owned the facility, which neighbors Cleveland Hopkins International Airport, since 1999. I-X Center Corp. operates it with a lease that runs through 2024.
The company’s decision to close the facility and lay off most of its staff left event organizers scrambling for new space. Some struck agreements with the smaller Huntington Convention Center in downtown Cleveland to host shows. Boat show organizers elected to hold this year’s event virtually and in person, with some portions taking place online and others at dealerships.
Meanwhile, I-X Center Corp. in November entered a two-year lease with GOJO, the Akron-based manufacturer of Purell hand sanitizer, for 700,000 square feet of warehouse space at the center. That space is separate from the area of the facility where the public attended events.
The facility’s closure led to litigation. In December, organizers of several events, including the Cleveland Auto Show and the Great Big Home + Garden Show, filed suit. The organizers want the court to force the company to honor contracts for scheduled events over the next several years.
I-X Center Corp. in January sued the Lake Erie Marine Trades Association. The company asked a judge to declare that it does not need to honor its contract to host the Cleveland Boat Show, claiming that unforeseen circumstances – the coronavirus – rendered it unable to do so this year and in the future.
In one of several responses to I-X Center Corp.’s lawsuit, the boat show organizers said the pandemic only affects events scheduled while case numbers are high and it’s unsafe to gather. It should not be an issue once it is safe for people to be in large crowds, the motion said.
Burke did not immediately return a phone call, nor did a lawyer who represents I-X Center Corp.
Russo oversees all the cases and scheduled an April 13 pre-trial conference.
