Eighty-one-year-old Mary Catherine Scheele doesn’t have much money. She’s lived at the Anna Louise Inn since 1977, surviving these days on a modest retirement account and Social Security. She pays rent to live in the Inn’s dormitory-style apartments and says living there is nice because of the nearby park, convenient bus access and the safety it offers.

Scheele moved to Cincinnati from small-town Indiana at 19 and knows what it’s like to get kicked out of her home. She remembers living in the Fontbonne Girls Home on East Fifth Street from the time she came to town in 1949 until it was purchased in 1977 and demolished to make room for Procter & Gamble’s corporate office. She says residents were notified that January that they had to move out by May.

“I got that letter once, yes,” she says from behind her desk in a first-floor office at the Anna Louise Inn, where she also does part-time clerical work. “You just couldn’t believe it. You just said ‘I can’t believe this is happening.’ You were just shocked.”

Scheele isn’t the type of resident that Western & Southern and its employees have vilified for the past two years while the company argues in the courtroom and the public realm that the Anna Louise Inn is bad for the neighborhood and the city. But the Inn’s residents are mostly people like her — an elderly woman who walks with a cane and will move out if she has to, but mostly because she has no other option.

Scheele is one of 57 women living in the Anna Louise Inn’s subsidized housing for single, low-income women. Some are between jobs, others struggle with mental health issues and many, like Scheele, live there long-term. The Inn for more than 100 years has been a haven for women who need a safe place to regroup, find support and get their lives in order. Nonprofit Cincinnati Union Bethel, which owns the Inn, has been around since 1830 and is credited with starting a number of innovative social service programs like the first free kindergarten in Cincinnati and free medical services before the Health Department existed.

Western & Southern wants the Anna Louise Inn to move out of the neighborhood it’s been in since 1909 — years before Western & Southern moved into its current home at Fourth and Broadway. The Fortune 500 company already stalled a planned renovation of the Inn and has appealed every move its leaders have made to try to proceed. Executives at Cincinnati Union Bethel are tired of the drama but vow to fight to keep what’s theirs.

Standing on the Anna Louise Inn’s front steps, surrounded by historical landmarks and newly renovated buildings owned by the organization’s newfound opponent, Cincinnati Union Bethel Executive Vice President Mary Carol Melton points across Lytle Park toward Western & Southern’s corporate headquarters. She says the worst part of the ongoing dispute is how friendly the two sides had been for so many years.

“How do we get back to being shared neighbors?” she asks, looking out over the freshly cut grass toward downtown’s business district. “That’s the win-win we’re looking for.”

The Anna Louise Inn and Western & Southern have shared this neighborhood for nearly a century. Their leaders used to exchange friendly letters and emails, and Western & Southern regularly donated to the Inn’s fundraisers. One of Western & Southern’s highest-ranking executives served on a board that gave the Anna Louise Inn’s prostitution recovery program a high honor just a couple years before that same program was singled out by the corporation as bad for the neighborhood.

CityBeat last year reported the details of Western & Southern’s various legal challenges and arguments against the Anna Louise Inn staying in the neighborhood (“Bully on the Block,” issue of Oct. 5, 2011). Since that time, a local judge ruled in Western & Southern’s favor, blocking millions in federal loans for the Inn’s renovation, and the dispute continues today on several fronts, both in and outside of court.

Western & Southern refused to speak with CityBeat for this story due to “ongoing litigation.” CityBeat is unaware of another time when Western & Southern refused to speak with the media during the 15-plus months since W&S sued the Anna Louise Inn. Western & Southern CEO John Barrett spoke to The Enquirer in an interview that was published Aug. 12, after CityBeat’s interview request was denied. Even though Barrett refused to address the lawsuit, The Enquirer allowed Barrett to discuss “his vision for the east end of Downtown, how he handles criticism and his company’s role in the community.”

Western & Southern sent CityBeat an 87-word statement saying the company knows of an approach that will benefit everyone in the community. “We have shared our thoughts many times with Cincinnati Union Bethel and still hope to reach an agreement that will be a win-win for all,” it concluded.

Western & Southern argues that redeveloping the neighborhood without the social services agency is what’s best for the city and has offered to help move the Anna Louise Inn to another location. But the Inn’s leaders say that’s not what’s best for their mission of providing safe and affordable housing for women, which they’ve been doing in the Lytle Park district since the Charles P. Taft family donated the building in 1909 and named it after their daughter.

“There’s no other place like this.” Melton says. “For it to leave the downtown area means this as a resource is just wiped away.”

WESTERN & SOUTHERN COULD ALREADY OWN THE ANNA LOUISE INN

The Anna Louise Inn is surrounded by money. The city’s only affordable housing provider dedicated solely to single, low-income women sits right in front of the entrance to the One Lytle Place luxury apartment building, a high-rise with panoramic views of the Ohio River, a rooftop sun deck and 24-hour concierge services.

Western & Southern owns more than 20 properties surrounding the adjacent Lytle Park, including the historic Phelps Building that Western & Southern renovated into a hotel; Western & Southern’s corporate headquarters on Broadway Street; and the Guilford Building, Eagle Realty’s recently renovated corporate office. Western & Southern also developed the 41-story Great American Insurance skyscraper, which towers over this upscale, eastern downtown neighborhood from the west.

Western & Southern has a lot of money, and its leaders have a lot of power. Western & Southern Financial Group has $53 billion in assets, made $281 million in 2011 and paid its CEO, Barrett, more than $3 million last year. Barrett’s salary climbed more than $750,000 since 2009 and he ranked fifth on a list of the Tristate’s most influential leaders last year by business publication Cincy magazine (he was No. 1 in 2009). Barrett hosted George W. Bush at his $2.5 million Indian Hill home for a 2006 GOP fundraiser and gave the 2011 commencement speech at the University of Cincinnati, where his brother Francis is on the Board of Trustees.

Even without the influence of one of Cincinnati’s most powerful executives, Western & Southern could already own the Anna Louise Inn. But it turned down an offer to buy the property for $3 million in 2009, thinking Cincinnati Union Bethel had no other option than to sell it for less.

Letters acquired by CityBeat show Western & Southern playing hardball with Cincinnati Union Bethel from 2005-09 when CUB was considering selling the building because it needed expensive renovations. The final Western & Southern offer was made in 2009 for $1.8 million, just $50,000 more than its first offer back in 2007. The property in 2011 was valued at $4 million by the Hamilton County auditor.

In a letter dated Dec. 1, 2008, Eagle Realty President Mario San Marco offered $1.8 million for the Anna Louise Inn. Eagle Realty is the real estate arm of Western & Southern. Cincinnati Union Bethel President & CEO Stephen MacConnell responded two months later with a counter offer involving the $1.8 million plus a combination of other contributions that would total $3 million in value. MacConnell suggested Western & Southern include things like endowment contributions, office space and moving expenses.

But Western & Southern didn’t take the offer. Six months later, San Marco wrote MacConnell a letter saying Eagle Realty couldn’t raise its offer higher than $1.8 million because of “challenges and complexities of development in our (Central Business District).”

San Marco added: “… we cannot pay more for a property than it is worth to a development project.”

MacConnell declined the offer within a week.

“With due respect, your letter offers very little by way of a counter offer in which we would be interested,” MacConnell wrote on June 10, 2009.

He added: “I do understand your statement that, given the challenges and complexities of development in the central business district, Eagle could not pay more for the property at this time. Therefore, while we continue to be interested in discussions with you that may be fruitful, it does not seem that our current negotiations are producing reasonable opportunities.”

MacConnell says he never heard back from San Marco, so he continued hosting developers interested in the property while also trying to find the funding to stay in the location.

It was about one year later, July of 2010, when Cincinnati Union Bethel won state-distributed federal funding to renovate the building. And it was around this time that Western & Southern realized it had blown its chance to acquire a property it wanted much more than San Marco let on.

The property was clearly worth the $3 million MacConnell asked for, because Western & Southern soon offered that much or the higher of two independent appraisals for it. But the Anna Louise Inn was no longer on the market thanks to $10 million in tax-credit financing from the Ohio Housing Finance Agency. It later secured a $2.6 million loan funded by the U.S. Department of Housing and Urban Development that was awarded by the city. These pieces of federal funding are set aside for historical renovations and affordable housing.

Western & Southern started spreading word of its $3 million offer to local media, which consistently reported it in stories about Western & Southern opposing the renovation.

MacConnell takes exception to it.

“When they made a $3 million offer it was after we had received our tax-credit financing, and we had basically about a $17 million project ready to go with financing in hand,” MacConnell says. “They made that offer right before we were going in front of City Council with one reason: to delay if the city said ‘well, they’re still talking’ — which we weren’t because the building was no longer for sale — ‘then let’s give them more time.’ ”

City Council unanimously approved the $2.6 million federal development loan in late 2010. The next step was mostly a formality — council needed to see a signed development agreement, then the city manager could sign off on the loan. This didn’t stop Western & Southern from applying pressure at City Hall.

San Marco sent a letter to Mayor Mark Mallory, City Manager Milton Dohoney and all nine council members on Jan. 21, 2011, arguing that the city was mishandling the loans. San Marco also wrote that “(Anna Louise Inn) repeatedly rebuffed any and all efforts on our part to negotiate in good faith on a purchase of the building and offer much more suitable facilities at less cost and at no taxpayer expense.”

Western & Southern declined CityBeat’s request to speak with San Marco about the negotiations.

Even though the loan was unanimously approved by City Council, one council member changed his mind by the time the development agreement vote came around. Councilman Jeff Berding was the only person to vote “no” to the agreement, telling The Enquirer at the time that, “There has been an enormous emphasis on charitable investment and not enough support for for-profit investment. That’s why this city had a $60 million budget deficit.”

Berding was also the only council member who received a campaign contribution from the Western & Southern PAC during the 2009 council race. Berding received the $500 contribution on Nov. 2, 2009. He got another $500 from Francis Barrett, Western & Southern’s lawyer and the brother of CEO John Barrett. Francis Barrett also gave $500 to Councilwoman Leslie Ghiz that year. She voted with the other seven members of council who approved the agreement. (The Cincinnati Election Commission limits campaign contributions to $2,700 for PACs and $1,100 for individual contributions.)

The conditions of the federal low-income housing credits made Western & Southern’s missed opportunity even worse because they require a 30-year commitment to their intended use. Once Cincinnati Union Bethel renovates using these funds, the Anna Louise Inn will be in the neighborhood — and off the market — for a long time.

“I think they waited around and dragged their feet beginning five years ago thinking they were the only game in town, and, eventually, because the building needs maintenance — which is one of the reasons we’re renovating it — that they would be able to get it for a song,” MacConnell says. “And they waited around too long and then we got this tax-credit financing and that’s when they went crazy with the misinformation campaign about the Anna Louise Inn.”

NEIGHBORLY WAYS

Things changed dramatically between Western & Southern and the Anna Louise Inn once Cincinnati Union Bethel figured out a way to stay in the neighborhood. According to Cincinnati Union Bethel’s records, Western & Southern from 2007-09 donated $1,000 four different times to the Anna Louise Inn’s Off the Streets program, which helps women involved in prostitution turn their lives around. Back in 2005 Western & Southern donated $5,000 to Cincinnati Union Bethel to celebrate the organization’s 175th anniversary. By 2010 Western & Southern had apparently run out of giant checks to pose with.

But that’s not to say the corporation was without interest in the Anna Louise Inn’s programs — it just thought they were really bad now. One month after CUB got the $10 million loan, Anita Collins Purnell, Eagle Realty assistant vice president and director of multi-family management, wrote a letter to neighbors in the Lytle Park district on Eagle Realty letterhead describing Cincinnati Union Bethel’s renovation plan.

The letter claimed an obligation to inform residents about changes to the Inn’s facility and programs that might lead to an “increase in activity” in the neighborhood. It said the Anna Louise Inn was going to raise its total number of occupants to 180, but the project actually planned to decrease the number of residents from 100 to 85. It also said Cincinnati Union Bethel was considering “an increase of services,” which was not true.

The letter included contact information for both the Cincinnati city manager and director of community development, in case any residents wanted to “weigh in and express (their) thoughts.”

Later that year, one resident took her advice.

Dan McCarthy in November of 2010 wrote a letter to Cincinnati Police Chief Thomas Streicher describing the special kind of hell the women of the Anna Louise Inn had made his neighborhood.

“I am writing you as a concerned citizen and resident of One Lytle Place,” McCarthy wrote.

McCarthy was listed in the White Pages as Eagle Realty’s development manager at the time. A Daniel McCarthy is currently listed on LinkedIn.com with the same title at Eagle Realty.

McCarthy’s letter described a series of heinous scenes he witnessed, including the following:

“The most recent occurrence was last week when I walked through a circle of four women and one man as they passed a makeshift soda can-pipe (sic) from which they were smoking marijuana in broad daylight. The group completely blocked the sidewalk as I attempted to pass through their pungent smoke. …

“On another occasion I was walking home. As I approached the stairs nearest to Lytle Street (along the west wall of the Anna Louise Inn), three women sat on the steps, passing a marijuana cigarette in broad daylight. It should be noted that I was not the only passerby on this occasion, however the smokers still made no effort to be discreet. …

“On two occasions, as I walked across the round concrete feature in Lytle Park, I witnessed a man and a woman embracing in the shrubbery. During both occurrences, the man’s shirt was off, and during the second occurrence, the woman’s shirt was removed. They appeared to be having sex.”

McCarthy admitted that he only decided to offer these concerns because the Anna Louise Inn found a way to stay in the neighborhood.

“I should have complained earlier about these occurrences but had understood the Anna Louise Inn was to be closed and redeveloped,” McCarthy wrote.

Eagle Realty’s San Marco didn’t view the Anna Louise Inn like McCarthy, at least not before he missed his chance to purchase the building. Back in 2008 San Marco was on a selection committee that awarded the Off the Streets program the Over-the-Rhine Chamber’s Star Award, which is given annually to “outstanding individuals, organizations and businesses to recognize the positive impact they have made in Over-the-Rhine over the past year.”

The Off the Streets program helps women get out of prostitution by offering emergency needs, housing, medical care, mental health, education and employment resources. Nineteen women are currently in the program, which has a capacity of 25.

MacConnell sent San Marco an email in March of 2009 telling him that Cincinnati Union Bethel had won yet another award. San Marco responded that same day: “What good news for the good work that you and your colleagues do at CUB (Cincinnati Union Bethel). Congratulations to all of those involved with the Off the Streets program. I was delighted last year to be part of the selection committee when the same program received a Star Award from the OTR Chamber.”

San Marco also wrote that he would soon respond to MacConnell’s recent message about selling the building, with hopes of narrowing the gap between the $1.8 million offer and $3 million counter offer “by some creative means.” Three months later San Marco wrote the letter stating that Eagle could not raise its offer above $1.8 million because of the economy.

LAWSUITS, APPEALS AND ... MORE APPEALS

City Council approved Cincinnati Union Bethel’s development agreement, but that didn’t mean the Anna Louise Inn was home free. Western & Southern filed a lawsuit on May 27, 2011, five days before the Inn’s scheduled renovation, claiming the building was improperly zoned. The lawsuit, against the Anna Louise Inn and city of Cincinnati, froze both the state- and city-distributed federal loans and put the renovation on hold indefinitely.

It took a full year for Hamilton County Judge Norbert Nadel to decide the case, and it went in Western & Southern’s favor. Nadel determined that because certain programs at the Anna Louise Inn — specifically the Off the Streets program — help women who could be defined as homeless, the entire building should be designated a “special assistance shelter.” The city classified the Anna Louise Inn as “transitional housing” under its “Homeless to Homes” program in 2009. Nadel’s ruling means the Anna Louise Inn is now in violation of the city’s Land Use Regulations and brings to question zoning rulings in other neighborhoods and development districts. Both Cincinnati Union Bethel and city of Cincinnati appealed the ruling.

On top of the $12.6 million it can’t access, the lawsuit has cost Cincinnati Union Bethel money in other ways. The Anna Louise Inn rented an outside office for its administrative services during the proposed construction, which they’ve been in for more than a year now, and the legal fees continue to add up, though supporters have helped with some costs.

Rather than proceed with a renovation that would move the Inn’s residents out of their dormitory-style rooms and into individual apartment units, Cincinnati Union Bethel fights on in court. While appealing Judge Nadel’s ruling, its lawyers are trying to get a conditional use permit from the city’s Historic Conservation Board — which, ironically, involves identifying itself as a “special assistance shelter,” as Judge Nadel ruled.

“Even though we’re not a shelter and we don’t believe that we ever were a shelter, Judge Nadel found that we were,” MacConnell says. “Since he found that, oddly, we’re going to go back in for the Conservation Board saying that we’re a special assistance shelter. Special assistance shelter designation conditional use is permitted under the zoning code.”

But there are steps to get that, too, and they can be appealed. The Anna Louise Inn on June 25 received a certificate of appropriateness by the Historical Conservation Board, meaning the exterior renovations complied with the neighborhood’s guidelines. The Inn already received this once, but Judge Nadel threw it out over a technicality — it was essentially approved in the wrong order the first time.

Nadel is a well-known local Republican who consistently runs unopposed. Cincinnati Union Bethel’s lawyer, Tim Burke, is also the chairman of the Hamilton County Democratic Party. Burke says Western & Southern filed the orginal zoning lawsuit early, before the city made any administrative decisions. Once the city acted in favor of the Anna Louise Inn, Western & Southern appealed, which consolidated the cases under Nadel, Burke says.

“They filed the case early to get it in front of Nadel,” Burke says. “That’s who they wanted as their judge and they got him.”

Last month Western & Southern filed its appeal of the certificate of appropriateness, waiting 29 of the 30 days it could to do so. Burke says it’s typical of Western & Southern to wait until the last minute, trying to draw out the legal process to hurt its opponent.

“It’s sickening to me to see one of our largest and, frankly, best companies doing this to Cincinnati Union Bethel and the Anna Louise Inn, which has been nothing but good for the Lytle Park neighborhood,” Burke says. “They’ve been an anchor in that neighborhood as long as Western & Southern has and they do nothing but assist this community in being a better place to live.”

An evidentiary hearing is scheduled to take place Aug. 27. Cincinnati Union Bethel will argue that the Anna Louise Inn is a special assistance shelter and ask for a conditional use permit, which would get around Nadel’s zoning ruling. Burke is confident the renovation can comply with the requirements to get the conditional use permit, even though he disagrees with Nadel’s opinion that Anna Louise Inn is a special assistance shelter.

Even if the Inn proves itself to be a shelter and receives the conditional use permit, Burke expects Western & Southern to appeal. When asked if it’s inevitable that Cincinnati Union Bethel eventually will win either the conditional use permit or its appeal of the original zoning ruling, Burke says: “I didn’t think we could lose the first time.”

The end result is most likely another date with Judge Nadel — after approval by the Historical Conservation Board and a series of appeals by Western & Southern. In the meantime, the appeal of Nadel’s zoning ruling will move forward in the 1st District Court of Appeals.

Women living in the Inn, including the 81-year-old Scheele, filed a federal lawsuit alleging that Western & Southern has violated the federal Fair Housing Act. It accused Western & Southern of villifying residents, photographing them without their permission and accusing residents of engaging in criminal activity and other inappropriate behavior in the neighborhood.

Cincinnati Union Bethel also filed a countersuit against Western & Southern for damages and interference with its business relationship.

“Of course, we could settle the case at any time,” MacConnell says. “But based on what they’ve done so far, we’re guessing that they’ll do everything they can to delay. If they do that and it gets back to Judge Nadel’s courtroom, we think by then the 1st District Court of Appeals will have reversed and vacated his first decision.”

WHAT WOULD JESUS OR LARRY MCDONALD DO?

While women like Mary Catherine Scheele wonder whether they’ll soon have newly renovated individual apartments or be moved to a new neighborhood, a growing number of social justice activists are rallying in support of the Anna Louise Inn. The Greater Cincinnati Homeless Coalition last month hosted a “Christmas in July” rally in Lytle Park. A street theater team reenacted Barrett denying Mother Mary a room at the “Inn” until protesters swayed Barrett to do the right thing and give her a room.

The Homeless Coalition was also involved in a May 9 rally outside the Hamilton County Courthouse in response to Judge Nadel’s ruling against the Inn. The group marched to Western & Southern’s headquarters to request a meeting with Barrett. Rev. Troy Jackson is the pastor of University Christian Church and a leader of Ohio Prophetic Voices, an organization dedicated to protecting the poor and vulnerable. His organization marched with the coalition to Barrett’s office that day. Jackson says Western & Southern’s actions seem too unreasonable to be true.

“We basically said, ‘We must be missing something,’ ” Jackson says of a letter they delivered to Barrett requesting a meeting. “These kinds of reasons don’t fit with our values as a faith community or as a city. We want to sit down and hear what your rationale is. They ignored it.”

About three months ago, Jackson collaborated with Matt Dawson, a member of local organization Cincinnati Faith and Justice, on a satirical video parodying a Western & Southern spokesperson proud of his company’s attacks on the Inn. Dawson says his group wants to help protect the Anna Louise Inn as part of its ongoing dedication to uniting Christians around biblical justice.

“When Jesus talked about whenever you take care of the poor, the hungry, the oppressed, the ones in jail, he says you’re actually taking care of me,” Dawson says. “So that’s a picture of him joining us as we’re suffering. By taking care of the oppressed we’re actually administering to him.”

In the video, fictional spokesperson Larry McDonald strolls along the Anna Louise Inn’s front steps wearing a dark suit and gold tie, frequently removing his glasses for emphasis and pointing them at the viewer. At one point he picks up a “Support the Anna Louise Inn” yard sign, tosses it to the side and says:

“It’s 2012 people — it’s not 1909. And in these times of economic hardship, what could be more American than making a corporation like Western & Southern richer and stronger? After all, what’s good for a corporation must be good for everybody, right?”

The video was online for less than a week before The Enquirer ran a story about it, and then it was removed from YouTube for copyright infringement the same day. Western & Southern didn’t return calls from CityBeat or The Enquirer asking if the company knew what made the video disappear. It was kicked off another video-hosting site for the same thing, and a week later organizers posted the video on a private website, www.southernwestern.net, where it still exists.

“When David’s fighting Goliath you have to find any stone that you can,” Jackson says. “This video was a stone — an attempt to try to figure out a way to get them to pay any attention to the injustice. Their response to this video shows that at least one of our stones landed.”

Jackson says Western & Southern is putting itself in a bad position in the community by using its corporate power against a nonprofit. He believes Western & Southern is harming its own reputation by purposely hurting people who don’t have the resources to defend themselves. And he thinks the entire ordeal is part of a larger societal issue.

Jackson says: “What a lot of us are saying is, ‘If Western & Southern can do this to a shelter or a women’s low-cost housing provider that’s been there 100 years, what can’t a corporation do to our city or our nation?’ ” ©