CRY FOR CLEVELAND OR HAVE I ASKED THAT BEFORE

Submitted by Roldo on Wed, 01/07/2009 - 13:47.

In the 1990s, Cleveland had a rather highly educated City Council. I can’t remember the number but the percentage of lawyers among the 21 members was high.

Cleveland also had an intelligent, crafty and feisty Mayor in Michael White.

Today, City Council appears – with a few exceptions – to be inept and even farcical. Mayor Frank Jackson may be steady but one wouldn’t call him artful or exciting.

Does it make any difference?

Here is an example where it definitely didn’t. The city and its citizens have been paying dearly for it ever since despite the best and the brightest at city hall at the time.

I asked the city recently to provide me with payments by the city for two garages the city built during the White Administration for Gateway.

The documents they sent me detailed the costs of the garages to the city since September 1996 through September 2008. Each September and each March, the debt service figures are totaled of payments made.

The cost since 1996: $30 million. All City money.

The city has had to raid its “parking meter collections” and its “parking garages/lots collections” – money that could go into the general fund to pay for police, fire or any other city service – to pay debt on the Gateway garages.
This was a disgraceful method of insuring that the bondholders would be secure.

There was a reason to be highly skeptical that the garage parking revenue would ever be enough to pay the bondholders.

Why? Simple. County Commissioner Tim Hagan and Mayor White, leaders in the subsidy train to Gateway, gave away so many parking spaces in the garage to Dick Jacobs and the Gund brothers. Garage revenue could never pay off the debt.

In order to meet the debt the city – not the teams, not the owners, not a private developer - HAD to build the two garages.

I go back to the days of the Cleveland Edition for my memory of how many parking spots our leaders gave the team owners to utilize free of charge. The two owners got 250 parking spaces each free every single day for their private use - game or no game on those days. Jacobs also got 1,250 parking spaces for each home game or 82 times a year. The Gunds – Gordon & George – got 1,450 spaces for each of 42 games. The free spaces go to premium and loge ticket holders. (These special fans never have to set foot on a Cleveland street.)

No private developer would build if a significant portion had to be free. So White - who admitted that a private developer “would lose money” -came to the rescue, as I wrote, “with City Council as his posse.”

Finance director at the time, Steve Strnisha - also a Gateway board member at the time - sold the deal for White, He promised Council – always eager to have a leaf to hide behind – that the garages would be “a good investment on the part of the city.” Some investment.

Strnisha, who later went to work for Cleveland Tomorrow - now the Greater Cleveland Partnership, - told Council, “The fact is that if these garages are not built…Gateway will not occur.” (Not unless Jacobs and the Gunds were forced to pay their own way.)

REMEMBER this when it comes time for either the city or the county to add money for the garage or garages for the medical mart and convention center. Plans for the new convention center include only 925 parking spaces, far too low for its needs.

So good, the Gateway garages poor financial performance has eaten into the city’s coffers for $30 million. This financial drain will continue for years to come.

Now, the Gateway scheme for paying for the garages had to be legislated.

In fact - presumably to make it more palatable - Mayor White had to add a third garage. The city hall’s Willard Parking garage – it was said – needed to be replaced as it was dangerously decaying. Why not bundle the three garages in one bond issue? So convenient.

So a third city garage was used as an excuse really to build two more at a total cost of some $73 million. This doesn’t include interest. One study at the time said that the Willard - built as a city contribution to urban renewal was attached to the 1916-built Cleveland City Hall - could actually be rehabilitated for $12-million. The Willard was built during the Ralph Perk administration, which puts it in the mid-1970s. The garage was less than 20 years old.

This was the deal that the late Fannie Lewis claimed, “This ties up the city like you tie up a hog.” She couldn’t have been more correct.

Lewis was likely the least formally educated member of that above-average Council but wisest as to the best interests of her constituents.

Finally, excuse me for laughing: Gateway was given $3.1 million by the city to coordinate construction of the garages for the city.

Can you cry for Cleveland? Or have I asked that too often.

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This tells me to build the MedCon by these garages

You bring up interesting observations, which include that we have a surplus of city owned garages in the Gateway area... that is also where we have all the freeway access - and a tunnel to the rapid lines and tower city.

So if a MedCon is to be built, it should be on the bluff on the other side of Ontario from Jacob's Field - that site is spectacular and could even justify a rapid stop below Jacob's Field, where the rapid lines pass Gateway to Tower City.

And, I don't believe it is Forest City property, so the County... we taxpayers... won't get screwed!

At least it is vacant land now, so we don't have the carbon tax of demolition or the extra expense of historic restoration. It would be chaep to develop over there and there is room for growth of other businesses as a result of any positive benefits of a Medical Mart and/or Convention Center.

As we plan replacement of the Innerbelt Bridge, and redesign of the trench, we can now plan great freeway access to that side of Cleveland, intentionally cut off from redevelopment by the same crooks that brought us the poorly-planned Gateway district of today.

Here's to a better tomorrow, without any of the failed planners of today.

Ban Steve Strnisha from all future regional planning and government.

Disrupt IT

My problem, Norm, is that

My problem, Norm, is that Cuyahoga County has no business spending $1 billion for a med mart and covnention center that will evenutally cost even more.

Where should the Med and Con be, if they are to be?

I certainly haven't seen a business plan for the Med or the Con, beyond typical con BS, so I don't expext the con to work, in the long run. To help speed up the deathg of the con, it is important to challenge every assumption of the con, including every aspect of the site selection process, including the two site pool the analyses considered. Why those two sites and no others?

I would challenge the Convention Center site if it altered or demolished that historic building so I don't believe that site is realistic. And I expect Forest City to go bankrupt or at least scale way back so I don't consider them a safe partne... and their site sucks, for the Med and the Con.

So if the Med or Con are to go forward, other sites must be comsidered... may as well play the GCP hame with our $40 million and propose where we want the con to play out, if the powers really want it to be.

1,000s of acres of free land available all over Cleveland - the idea of paying Forest City for their land is a joke.

Where should the Med and Con be, if they are to be?

 

IT

I looked up an older PD

I looked up an older PD article on this at CPL database and it provides some interesting numbers as well:

Cleveland takes financial hit on Gateway garages Downtown facilities could end up costing city more than $75 million

Plain Dealer, The (Cleveland, OH) - Sunday, February 12, 2006
Author: Joel Rutchick and Mark Gillispie, Plain Dealer Reporters

 Every time you plug a nickel, dime or quarter into a Cleveland parking meter, you're shoring up the two underperforming garages built for the Indians and the Cavaliers.

That loose change amounted to nearly $2 million last year alone – money that once helped pay for police officers, firefighters and other essential city services.

And over the last dozen years, the city has channeled nearly $31 million – most of it from meter collections – to help pay off loans used to build the garages. Without some kind of relief or reversal of fortune, the garages could cost the city more than $75 million by the time construction loans are paid off in 2022, if the city continues to subsidize the debt at its current pace.

then there was this friendly reminder - they didn't even pay tax for a period. Do they now?

GATEWAY AGREES TO PAY TAXES ON JACOBS FIELD , GUND ARENA

Plain Dealer, The (Cleveland, OH) - Tuesday, December 24, 1996

Author: JAMES F. SWEENEY PLAIN DEALER REPORTER

Jacobs Field and Gund Arena are moving off the list of tax deadbeats.

Gateway Economic Development Corp. yesterday signed a contract with Cuyahoga County to pay current and delinquent taxes on Jacobs Field and Gund Arena. The overdue taxes, most of which are owed to Cleveland schools, will be repaid over five years.

"I think it's a step forward. We take them one at a time, but I think it's a significant thing," said Gateway Chairman Craig S. Miller.

Gateway last paid property taxes for the second half of 1994 and owes the county $1.6 million.

County Commissioner Mary O. Boyle welcomed the news that Gateway will begin erasing its debt.

"At the beginning of the year, I wasn't at all confident Gateway would make it to the end of the year, much less be in a position to pay its taxes," she said.

Gateway is in a position to pay because of an agreement reached last week with the Indians. The team will pay $561,000 in rent to Gateway this year and has agreed to a formula that should increase future rents.

In addition to rent, Gateway is counting on other sources to pay taxes: the sale next year of a half-acre parcel on E. 9th St.; income from advertising or other use of the plaza between the ballpark and arena; and an expected $626,000 judgment against a Gateway vendor.

The agreement will not settle all of Gateway's bill.

The contract does not cover the taxes owed on the Gateway parking garages or the half-acre parcel that Gateway hopes to sell or lease to a hotel developer.

Miller said Gateway hopes the developer of the parcel will assume its tax bill. Gateway is reviewing its contract with Bolivar Parking Joint Venture, the company formed by the Cavaliers and Indians to manage the garages, to see who is responsible for the property taxes.

County Auditor Timothy McCormack, one of Gateway's harshest critics, welcomed the tax money.

"Working out a payment plan on taxes is a very good first step because of the awkwardness of having the property hanging out there with such a high profile. Not paying property taxes was something that couldn't be tolerated," he said.

 

When do other tax abatements run out? Or have those folks already moved out of those tax abated properties?

Now if we could only get CCF and UH to make PILOTS (payments in lieu of taxes)...

talking about money

Roldo, an intelligent discussion of money is what has been absent since I can remember from the local politics here--they prefer to exist in a world of ideas, of bullshit, of non-accountability, of dodged consequences.

You can't begin to talk about green things, sustainability, preservation, develpment, infrastructure, maintenance, and the like without talking about money, cost, value, time, and energy.

Thanks for once again providing a perspective absent from the local scene.

Susan: The story on Gateway

Susan: The story on Gateway paying property taxes is misleading.

There are no property taxes on the structures when abatement is given. However, the land taxes remain.

Gateway - which will NEVER have to pay a penny because its abatement is really an EXEMPTION via state law at the behest of Tim Hagan and Mike White - fell behind even on its taxes on the land.

So Gateway finally began to pay taxes on the land.

But it never will have to pay on the buildings.

So the tax abatement on Gateway - unlike those given for 10 or 15 years - never runs out.

the numbers I'd like to see now

Here's what I'd like to see: how much we paid and will pay

To finance the garages: It seems like we're at 30 million, but will eventually pay 75 million

How much did we pay for the ball field and the basketball court?

If they pay no taxes on the structures, what is the opportunity cost on that? In other words what would be in the city's coffers if they did pay tax on the structures?

Just as Laura would like the PD to do a story that maps the demolitions, I'd like to see them do a "what if there wasn't tax abatement" story. It could include sites where the abatements do run out like residential structures via the Community Reinvestment Act and places where it won't like Gateway (which others?). Not BP apparently, but this article is interesting re: Eaton nonetheless.

I don't think Clevelanders are angry enough, but if we could put this into opportunity cost figures...so for example, if Gateway paid taxes like the rest of us, how many fire and police and road services would that fund? How many schools could be rebuilt? How much lead poison erradication could be accomplished?

Could we map the properties that are tax abated so we would know where they are, who is making out on the deal and which neighbors are not paying taxes and which are? Now those are some things I would imagine inquiring minds would want to know.

The big loser in tax

The big loser in tax abatement or exemption, as with Gateway, is the Cleveland school system. Generally speaking, the schools would get some 60 percent of that money. So over the years the schools have surely lost tens of millions of dollars.

I've tracked some these figures in the past, mostly the big abatements as Gateway, Key Center, Tower City, Ritz Hotel, Marriott, Wyndham. Didn't get that much response, however.
Those figures, however, are old now and need updating.

It would be a project for a student or two at the County Auditor's office.

Roldo, do you defend?

  Any current council members?  Can you find a decent one among them? Who are the "exceptions," and why?