Did anyone really expect anything but a screw job from the final deal for MMPI?
I love how the Plain Dealer has concentrated on the public having the legal document a week before the County Commissioners vote.
Does anyone believe that the public will have the opportunity to really change even a comma in this document?
Didn’t we already know that the County would pay $40 million a year to MMPI?
The County taxes will produce the funds to pay $36 million in bond interest. That, the deal says, is a “reasonable estimate.” What happens if it becomes not reasonable? I’d guess that the County will have to come up with more money.
The County can “terminate” if there is “no prudent alternative” for financing the bonds.
Yes, I can see Cuyahoga County terminating and not seeking new revenue sources if the Convention Center is two-thirds complete but has run out of money. Can’t you?
We all know and have known that the taxpayers will foot the bill. We have all known that profits will go to MMPI (Merchandise Mart Properties, Inc.). We always could figure that MMPI would never pay any property taxes. The deal says it doesn’t. (Why should anyone pay property taxes in Cleveland since almost anything built for private interests with public funding pay no property taxes?).
What did we expect to change? Did anyone think that Commissioner Tim Hagan and Fred Nance would negotiate a tough deal with Hagan’s Kennedy friends? Hagan himself has cited the familial connections he has with Kennedy.
Does all this sound as if Fred Nance of Squire, Sanders and Dempsey dragged some tough commitments from MMPI?
The deal calls for MMPI to recruit for the Med Mart 10 manufacturer of medical devices or equipment. There’s no description of what the 10 manufacturers will be selling. One, I guess, is supposed to believe that they will be outfits that will show medical equipment and devices worth millions and that thus will bring revenue to the city and county.
But it isn’t spelled out.
So the lease doesn’t tell us the quality and economic value of the ten. If you’ll remember one publication recently reported that the initial tenants envisioned by MMPI will of low economic impact. They deal with beds, chairs and floor tiles for hospitals, the article said. Whoopee! See it here: http://www.clevelandleader.com/node/9540
The deal also calls for five medical organizations to provide “shows or conferences” for the convention center. Another whoopee!
What size? It doesn’t say. That leaves quite a gap. Can three people put on a show? Is there any number of visitors required that would make these five events of real value? I can’t find any such description in the lease. I guess we take it on faith.
MMPI gets to lease the medical mart and convention center for $1 after the taxpayers pay to build it.
The document says that the county in the first three years will pay monthly rent (for a complex it paid to build) of $500,000 per month.
In Cuyahoga County taxpayers in the fourth year will pay monthly $429,166.66 or $5,150,000 annually.
Then in the fifth year to its end in 2027 the County will pay 103 percent – meaning a 3 percent yearly escalation factor. (I find it interesting that when Nance negotiated with the Cleveland Browns the annual rent was a measly $250,000 a year - AND NO ESCALATION CHARGE – so the rent for the Browns remains the same during its entire lease. Shows you how Nance was easy on the Browns, tough on the County.) The County, you remember, was to pay Nance up to $175,000 to negotiate.
The subsidies hardly end there.
The agreement calls for “cooperation” in seeking historic tax credits. In other words, more tax subsidies.
Other subsidies – federal, state and local – could be sought.
We’re told that MMPI, in addition to investing $20 million itself, will absorb all overruns. (MMPI receives a $12 million “construction management fee.”)
I don’t believe for one moment that MMPI will absorb all overruns. If there are significant overruns a “new deal” will be worked out, I have no doubt. It has happened before. No doubt it will again by Fred Nance or his successor. And the County Commissioners – even in Hagan is gone – will make excuses to the public why “WE MUST DO THIS. IT MEANS JOBS. IT’S OUR RESPONSIBILITY.” Bailouts have a history, don’t they?
When Gateway came up short millions and millions of dollars, Hagan with the help of Mary Boyle and Jim Petro – simply let new County bonds of $75 million and $45 million to cover the cost. One of the bond votes took 30 seconds. Hagan showed complete disdain for the small public that attended meetings about these votes. Should that surprise anyone?
After all, hadn’t he been elected to make these decisions?
Isn’t he still making these decisions? So, you, sit down and shut up.
The parade goes on. But the PD has given us a week before it officially takes place.
That’s what we call Progress here in Northeast Ohio.