CUYAHOGA COUNTY COMMISSIONERS PLAY DUMB AGAIN

Submitted by Roldo on Thu, 10/23/2008 - 20:04.

Did anyone expect anything less? Cuyahoga County Commissioners waived the $500,000 fee on the East 9th Street and Euclid Avenue property originally bought for a new County Administration Building.

The $500,000 check was made to the County to tie up the property for the developer. The developer should have eaten the fee and the County should be $500,000 richer.

Apparently, that’s too much high finance for the three County Commissioners to figure out.

There can be no doubt that the fumbling, stumbling County Commissioners have no idea of what to do with the property they bought for some $22 million and have invested millions of dollars more in asbestos removal.

So why not give it to some developers who also have little idea of what to do with what was the financial corner of downtown Cleveland.

What will K & D do?

Since they pay NOTHING to hold onto the land they sit and wait. Hey, lightening does strike somewhere.

Commissioners Tim Hagan, Jimmy Dimora and Peter Lawson Jones might as well have their finger right up you know where.

This property, already empty for a decade at least, can now be used by speculators – the K & D Group (doesn’t that sound impressive). It will be years and years before anyone sees anything done with that property.

This has been one of the biggest screw ups of all time in a city that has almost perfected the talent.

“The worst that can happen is they can’t consummate the deal and we sit on the property for another couple of years,” Hagan told the Plain Dealer.Doesn't that kind of comment give you confidence in your County leaders.

The worst will happen – Tim Hagan will be re-elected in November.

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WHICH 5OO,OOO IS WAIVED?

Here

is a photo of the bid check provided by K$D at the time of the bid.  But there was a second check due in 12 months.  

 

If the first check has not been cashed by the County, then there is more corruption here than the FBI is yet investigating.

 

Which 500 K check is it that the County is "waiving"?  The bid check, or the second installment? 

second installment

The bid document states that K&D will pay the $500,000 if they complete the financing and purchase the building. That check was being held in deposit for a purchase agreement - due October 31.

"Interested parties must submit  their bids to the County’s Office of Procurement and Diversity by submitting four (4) signed originals of the  Purchase Agreement included in the Bidders Package, along with a deposit of $500,000.00 by certified check, cashiers check or money order drawn on a solvent bank or Savings and Loan Association, payable to the Cuyahoga County Treasurer (the “Offer Deposit”).  Such signed Purchase Agreement shall constitute  an offer to purchase by the bidder on the terms and conditions set forth therein, which offer is irrevocable for a period of sixty (60) days after the Bid Deadline.  Upon acceptance of the offer by the County, the Offer Deposit received from the successful bidder (the “Buyer”) shall be deposited by the County into an escrow account with Chicago Title Insurance Company at 1360 E. 9th Street, Cleveland, Ohio 44113. An offer shall be deemed to have been accepted by the County at such time, if at all, that the County executes and delivers two (2) copies of the Purchase Agreement to the Buyer.  

On or before the Closing Date as outlined in  the Purchase Agreement,  the Buyer shall deposit the balance of the Purchase Price set forth in the Purchase Agreement into escrow."

From the PD article, "The deal would waive a $500,000 fee that K&D Group had agreed to pay if the company could not close a deal on the county-owned Ameritrust Tower by Oct. 31."

Now, unable to come up with $200 million in financing (credit) they have asked for more time. The BOCC has agreed to wait. Probably a good idea since they screwed up the first time by not casting a wider net. I would suspect that they may not find a new bidder in the current market.

It was K&D's first bid that was offered in two installments and rejected by the BOCC. They offered less than the bid deposit on the first round.

The first mistake was that the county bought the building in the first place. The second was a lame idea to tear down the tower. The third was that when they saw the light and decided to sell it, they did not advertise the sale beyond Cuyahoga County (Jeff - you'll recall that we asked Barb Shergalis about this at the bid meeting and she stated that she had asked if they wanted it posted in the WSJ and they had declined. From the bid document, "To be published in the Plain Dealer: March 4, 2008, March 11, 2008, March 18, 2008 and March 25, 2008.").

Poor planning resulted in a poor outcome for the city, the Breuer Tower, the Post Rotunda, the developer and the BOCC. Even though this project might have had a rosy afterlife 20 years ago when Jacobs bought it (had he had the vision to financing to complete the deal K&D set forth), that was not the case and so like so many wonderful Cleveland buildings, these will most likely remain moribund for years to come. Like so many other buildings in the city, their strong bones will have to wait for a refleshing until the current financial crisis has passed.  Too bad because the corners of East Ninth and Euclid and Prospect could have had a better fate.

K&D Westlake proposal rendering

The site of the bank that held the wealth accrued by some of the county's most heinous robber barons (Cleveland's polluting industrial giants) is experiencing the fate appropriate to such greed in the first place. Here at East Ninth and Euclid we see the signs of capitalism crumbling. A few blocks west, we see the signs of our County Government crumbling.

Barthelme's writing returns to mind today. I posted it here on May 4, 2008 in response to other city planning agendas. "Areas of the city, they told us, had been designed to rot, fall into desuetude..." Indeed this will ensue even more widely as the financial crisis deepens. We can farm in the neighborhoods, but our urban core will require more insightful planning; planning that is more insightful than what we have seen so far to be sure.

Excellent recap and summary, Susan. Next steps?

Does this mean that as of October 31st the Breuer is back on the market?

I think it is overpriced but combined with other parcels and good development planning around E9th and Euclid and Huron there is great value to be captured here.

I'd like to cast a wider net - there is plenty of private development money in the world looking for bargains and Cleveland real estate is a bargain. I'm not stressed about finding a buyer, after Bush is out of office and the global economy starts operating right, for the first time in human history.

So what are the exact next steps with the Breuer - after Oct. 31 can other buyers come in? How do we begin the process of proposing other uses?

Disrupt IT

they're holding on with K&D

Just before the bid by K&D was accepted - after their first one was rejected, I made a for sale email plea to other developers, but they won the bid and I was hoping that they indeed could garner the resources.

I think that the plans for the corner are sound - using it for condos and a hotel, offices and parking. These plans are much better than taking it off the tax rolls, tearing down the tower and erecting offices for people who already have offices. However, K&D has several other projects afoot nearby so could we launch a campaign to interest other potential buyers? I don't know. Maybe others can suggest other developers who might be interested and we can craft an ad to send to them.

I liked your idea of auctioning the Breuer at Christie's or Soetheby's. I liked your suggestion of asking the Gund children for help, Graham the architect and Agnes the art mogul (what became of that?).

I envision a permanent exhibit of wealth accumulation and the industrial giants whose money was held there in the safes and safety deposit boxes when it is made over into a hotel lobby. I contacted Gainor Davis to suggest that Western Reserve Historical Society propose such an exhibit since they have all the documents and images associated with the history of Cleveland Trust. She thought it was a swell idea but never called me back to arrange to discuss it.

Carl Stein has asked to use Cleveland Trust as a case study for his book on preservation and modernism, but since the deal is not closed he may have moved on to another success story. Kristin Ohlson had written an article on the saving of Breuer for preservation magazine, but it too is awaiting the final denouement.

But as a peon (citizen taxpayer), I must say that at times I tire of finding solutions for others to adopt as their own. Realneo is a good platform for making suggestions that others can wear as feathers in their caps, but this is not a paid gig and making smart suggestions at realneo for elected officials and "professionals" to adopt as their own does not pay my mortgage. I hate to seem selfish, but I have to admit that I am a bit more than dispirited when many of us spent countless hours convincing the elected officials that they had it backward only to now be thwarted again. I'll recover and return with some next steps, but let me allow this financial crisis and the FBI investigation sink in a bit more, eh?

roldo...how do you rant and

roldo...how do you rant and rave about the commisoners on a website with PLJ's sign at the top of the page?

 

Now, I have read all of your pieces online at the other site.  Despite very different political views I have had a lot of respect and admiration for your wisdom and experience.  However, tonight a lot of that went down the drain when I came to this site and read the piece on Lakewood Buzz.

 

Very ironic...you rant and rave about taxes yet you say we can't afford a McCain presidency.  to make matters worse you rant about the commisoners on a site with PLJ's sign at the top.

 

Partisanship is blinding...isn't it. 

"...always remain devoted to the public welfare"

n.e.o.c., would you be more specific on what piece on Lakewood Buzz bothers you?

After seeing your post to Roldo, I went and read a bunch of Roldo's stuff on Lakewood Buzz and was really impressed (as always) with Roldo's insight. He is doing a remarkable job of monitoring a huge range of regional concerns and reporting on issues with greater detail and more relevant current and historical references than anyone else in town. He has more "institutional knowledge" about NEO than anyone still alive and active in the community, and we need that real-world perspective. 

He is also one local reporter who understands Pulitzer's wisdom, and he deservers the prize...

“A free press should always fight for progress and reform, never tolerate injustice and corruption, always fight demagogues of all parties, never belong to any party, always oppose privileged classes and public plunderers, never lack sympathy for the poor, always remain devoted to the public welfare,” said Joseph Pulitzer. 

As for the header - I am responsible for that and it is not an indication of anything Roldo, or an endorsement - it is just real NEO photography. It'll be different later today. 

Disrupt IT

Jumping the Gun- Fee not waived

Defered until the deal closes.  The first $500,000 and the current defered $500,000 will count towards final purchase so the money is just defered until the deal gets done.  In the face of the global economic catstrophy I think the commissioners are playing their only bet to get this deal done ever.