More than a decade ago, a lawsuit filed in Erie County Common Pleas Court claimed that an Erie company, SB3 LLC, wrongfully stymied the plans of another Erie company, Erie Renewable Energy LLC, to build a tires-to-energy plant on the site of the former International Paper Co. plant on East Lake Road.
The suit settled for $1.55 million in June 2021, according to court records.
The deal was meant to end the court fight between Erie Renewable Energy and its development manager, Gregory J. Rubino, and another well-known Erie business figure, Samuel P. “Pat” Black III, the founder and owner of SB3.
The litigation has restarted — and so has the animosity that accompanied the original case.
In a new lawsuit, Erie Renewable Energy claims that SB3 has breached the settlement by falling behind on its payments. SB3 was supposed to complete the payments over two years, according to the suit.
After receiving 12 monthly checks of $65,000 each, for a total of $780,000, ERE stopped getting payments from SB3 in August, according to the lawsuit, filed in Erie County Common Pleas Court on Monday.
ERE is demanding that a judge enter a judgment against SB3 for at least $195,000 — the total amount ERE claims SB3 failed to send it, as required, in September, October and November.
The suit goes beyond trying to hold SB3 accountable for what ERE claims is a broken contract.
The suit also questions the financial viability of Black and his SB3, which owns and operates the SB3 Industrial Park on the former IP site, originally the site of the Hammermill Paper Co. plant. The IP plant closed in May 2002.
SB3 is one of several companies that fall under the umbrella of Black’s Erie Management Group and operate at the SB3 industrial park. The other companies include the Hero BX biodiesel plant; Calypso Enterprises, Erie’s only medical marijuana grower and processor; and the recycling company Prism Glass.
New company:Prism, a new public-private company, will collect glass in Erie County for recycling
In language more akin to a shouting match than the typically staid pronouncements in a legal filing, ERE claims SB3’s failure to make payments on the settlement shows that SB3 and Black are not as successful as they hold themselves out to be.
“SB3 has worked hard to create the facade that Pat Black is a successful entrepreneur and job creator whose only interest is to do right for the Erie community,” ERE’s lawyer, John Mizner, claims in the new lawsuit. “Mr. Black’s boasts, which have already been shown to be nothing more than a lipstick on a pig, (have) now been rendered a complete sham by SB3’s current misconduct.”
To further its claims that SB3 is financially unstable, the lawsuit cites an email its says a lawyer for SB3, Anthony Angelone, sent to Rubino on Oct. 7. Angelone sent the email after Rubino questioned him about when SB3 planned to resume the settlement payments, according to the suit.
“We recognize the settlement document with Erie Renewable Energy,” Angelone said in the email, according to the suit. “Due to financial and organizational restructuring, my client cannot make payments pursuant to that document.”
In an interview, Mizner said, “We are stunned and disappointed that after ERE agreed to allow Mr. Black’s company to pay its $1.55 million debt over a two-year period, it first misled us into thinking delayed payment would be forthcoming and then it stopped making payments and returning phone calls asking about payment.”
Erie lawyer Gery Nietupski, who represents SB3 along with Angelone, said Monday that he had not had a chance to review the lawsuit and was not prepared to comment.
But Nietupski said he sees no reason to be concerned about Black’s other holdings.
Remembering International Paper:20 years after the last paper machine shut down, what remains of this Erie icon?
“We don’t have any reason to believe that this thing — whatever it is — will have any impact on those other entities,” he said of the lawsuit.
Hero BX, one of Erie Management Group’s best-known companies, uses mostly waste grease and used cooking oil to produce biodiesel. Historically, the company has had about 50 employees.
Calypso Enterprises, the marijuana grower and processor, has seen sales to dispensaries decline as dispensaries began to rely more on their own internal sources of medical marijuana. Calypso announced in August that it had laid off 55 employees, nearly three-quarters of its workforce.
Job loss:Medical marijuana grower/processor Calypso Enterprises cuts nearly 75% of its workforce
ERE filed its initial lawsuit against SB3 in Feb. 2, 2012. Mizner represented ERE and Rubino, who also became well known for his work on developing Presque Isle Downs & Casino, which opened off Route 97 in Summit Township in 2007.
Presque Isle Downs’ parent company at the time, MTR Gaming Group Inc., of West Virginia, had considered building its slots casino and horse racing track on the site of the former IP plant, which closed in 2001.
At the track:Presque Isle Downs & Casino earns more racing revenue in 2022 despite fewer horses
In its lawsuit, ERE claimed SB3 blocked its efforts to develop a tires-to-energy plant on two parcels on the former IP site on the south side of East Lake Road. The SB3 Industrial Park is on the north side.
ERE claimed in the initial suit that it had a deal to buy property on the south side of East Lake Road — property known as South Yard and the Dunn Brickyard — from what was then the Greater Erie Industrial Development Corp.
At the same time, SB3 leased property from GEIDC on the north side of East Lake Road. That property, known as the North Yard, includes a rail line, according to the suit.
ERE claimed SB3’s lease of the rail line from GEIDC required SB3 to allow other tenants of the former IP site to negotiate access to the rail line. ERE claimed SB3 failed to negotiate with ERE over access to the rail line. ERE claimed that failure to negotiate contributed to ERE’s abandonment of the tires-to-energy plant on the former IP site.
GEIDC terminated the sales agreement with ERE in 2009, saying ERE failed to finalize the deal after being given numerous extensions.
ERE moved its plans for the tires-to-energy plant to Crawford County, where they remain active, said Mizner, ERE’s lawyer.
Change of plans:Plan abandoned for tires-to-energy plant in Crawford County
GEIDC, part of the former DevelopErie, filed for Chapter 7 bankruptcy, or liquidation, in 2016. The bankruptcy ended a lawsuit that ERE filed in 2009 against GEIDC over the tires-to-energy plant.
SB3 bought the Dunn Brick Yard and South Yard properties following negotiations in the GEIDC bankruptcy case.
Fate of land:Trustee seeks OK for sale of IP property
In filing the initial lawsuit against SB3, Mizner claimed ERE had lost more than $2 million as a result of SB3’s actions over the rail line. SB3 denied any liability. The company said in court records that it “at all times acted reasonably, lawfully and in good faith in its dealings with ERE.”
Chapter 7:Erie County to lose $2.5 million in GEIDC bankruptcy
SB3 agreed to the $1.55 million settlement to end the case, ERE said in its new lawsuit. The agreement, according to the suit, was supposed to be kept secret between SB3 and ERE.
When SB3 failed to make payments on the $1.55 million settlement, the suit claims, “ERE was relieved of its duty to keep the terms of the Agreement confidential.”
ERE disclosed the deal in its new lawsuit.
Contact Ed Palattella at Follow him on Twitter @ETNpalattella.
Contact Jim Martin at


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