A friend wrote me to say she had one drink at an E. 4th new street restaurant. The bill: $13. She questioned it. The server proclaimed, “This is DOWNTOWN.” Downtown? Downtown Manhattan, you mean?
I bring it up only because E. 4th Street’s development rests upon oodles and oodles of tax subsidies. And now one of its principals, Ari Maron, has inserted his mouth into the Medical Mart situation.
The Plain Dealer is welcoming all to this civic food fight. Its front page is wide open to manipulation. Developers aren’t missing a chance.
Everyone wants to get into the act. Maron has now attacked Dan Gilbert for backing the Tower City site.
He - as all developers - knows how generous government can be.
The city put fancy curbing and a brick road to service Maron’s East 4th development and closed the street to traffic, making it a private estate. The County had to reduce property valuations on Euclid Ave., thus taxes, to help with tax incremental financing for this development via a $9.2-million bond issue ($12.8 million with interest) from the City of Cleveland to subsidize building rehabilitation. (Council heard this legislation for 14 hours one day. A councilman, a lawyer, voiced his frustration of the lack of details saying, “After 14 hours, I can’t comprehend this information.” Just give us the money, cheapskates.
Across the street from East 4th at the Old Arcade subsidies also flowed: $8.26 million in a historic tax credit; $6.45 million in property taxes diverted to its fix-up; a city 30-year loan of $1 million with zero interest rate for 20 years and two percent thereafter; another $3 million loan for 20 years with a 6 percent interests and a 20-year County loan at 2.5 percent interest. Anything else you might want?
Cuyahoga County had to reduce some property tax values to help with the House of Blues in the East 4th & Euclid development. No problem.
Why even the bowling alley at the East 4th Street development got $1.5 million from the city. Economic development, don’t cha know.
So Maron understands the game. His opinion shouldn’t be given Page One exposure as an independent voice. However, the Plain Dealer is fueling the fight over where the new complex will go. Does Sam have an in there?
Developer John Ferchill also chirped in to counter arguments by Dan Gilbert of the Cleveland Cavaliers. Gilbert decried the Mall site. Ferchill decried Gilbert’s theory about sites.
Ferchill, however, has long had his sights on the historic Cleveland Board of Education administration building. It sits not uninterestingly right across from the city’s convention center and opposite Mall A from the Marriott. Ferchill wanted to spirit away the Board of Education building and a plot of school land behind it to build – guess what – a luxury hotel. His plot in the early 1980s fell apart. Dreams, however, linger forever with developers.
There’s more honey in this one than you can guess.
Sleaze is oozing by the ton here in Cleveland as that mountain of Cuyahoga County dough – up to $1 billion in cost to the taxpayer – sits around for a so-called Medical Mart and convention center.
The grabbing is so unappetizing. (Laugh here).
Is there a single business entrepreneur in town that will risk his or her own money? Not when the pols are giving it away so readily. Thank you again, Tim.
You’ll remember that the Tower City Gang – Sam Miller and Al Ratner and company – desperately wants to MM/CC (Medical Mart and Convention Center) in the backyard on its land (price $40 million or so).
So they brought out Dan Gilbert, Cavalier team owner, to cry against mall site. (The Mall was selected by the County Commissioner along with MMPI. The deal is not dotted and crossed yet.)
The Jacobs Gang is in favor of the Mall. It wants the $1 billion or so spent nearer the Marriott hotel, as evidenced by Sunday’s newspaper ad by son Jeff Jacobs. The ad – full-page – says that the Mall site is best. It just happens to be across from daddy’s project – Key Center and the Marriott, and the underground garage under Mall A given Dick Jacobs by George Forbes and George Voinovich. The Georges, as council boss and mayor respectively, were a tag team of delivery boys to Jacobs.
The Plain Dealer reported that Jacobs has sold his interests but still operates and manages the properties. Good enough for me to indicate family interest.
Further, Jacobs built the Key/Marriott complex on the north side of Public Square.
He got the same sweet deal from the two Georges to build on the west side of Public Square. That site remains a parking lot. Jacobs knocked down a number of office buildings that occupied that site in the late 1980s.
So the site sits conveniently diagonally across from the Key/Marriott complex.
Jacobs in 1989 planned to build a second office building and a Hyatt Hotel. The real estate market declined and the site remained empty.
Awaiting a market change.
It would be a block from the MM/CC. Still advantage Jacobs.
The battles between Jacobs and Sam/Ratners have a long history. They fought to get Cuyahoga County to buy buildings for a new headquarters. You’ll remember Jacobs’ E. 9th and Euclid Avenue Ameritrust corner won out over Sam/Ratners’ Higbee’s building as the future home for County government. The County choose Jacobs.
They both fought a battle never settled for development of the Bluffs area, west of Jacobs’s Galleria. That fight, too, awaits another time.
Now they are fighting again, despite the lack of direct ownership at the Marriott.
Our Sleaze characters have perfected how to glom up public subsidies. They are on the trail of another bonanza.
Time to take another look at the rapacity. I try to keep it a simple accounting. Know, however, that you helped pay for it.
Here are some of the goodies given to Jacobs and to Sam & the Ratners:
DICK JACOBS:
- $3.5 million for the Galleria. (This and others below are loans that typically last 20 years and carry no interest with payment due at the end of the 20-years. A number were cashed in early at reduced rates.)
- $10-million for Key Center.
- $10-million for the Marriott Hotel.
- $2.5 million for the Mall A underground parking facility in front of the Marriott.
- Tax abatement for Key Center, Marriott Hotel and Mall A parking facility.
- A $138-million road improvements at I-271 to Chagrin Highland development.
- $181-million for Jacobs Field (now Progressive Park).
- Rights held for years to build on city properties at E. 12 & St. Clair. Never built and had to return land to city.
- $22-million from Cuyahoga County for the East 9th Street corner (with added costs expected to be a $37.4 million cost plus $4 million for asbestos removal).
- The County agreed to honor Jacobs with a metal plaque to be placed on any new building at this site. It would read:
“Richard E. Jacobs – Mr. Jacobs has consistently and selflessly devoted his insight, skills and resources to the development, redevelopment, and preservation of Downtown Cleveland and Cuyahoga County. This complex, which includes the historic Rotunda, symbolizes the legacy that Mr. Jacobs has established through his leadership in development and owning many of this County’s major commercial, retail, and recreational facilities.” How nice of Tim Hagan, Jimmy Dimora and Peter Lawson Jones.
SAM MILLER & RATNERS:
- $10-million for Tower City retail building.
- $2.7-million for Tower City III renovation.
- 2.04-million for Tower City IIIa renovation.
- $7.9-million for Ritz-Carleton hotel.
- $9.2-million Tower City-Old Post Office building renovation.
- $9.2-million Halle Office Building on Euclid Ave.
- $69-million RTA Waterfront line serving Tower City.
- 20-year, no interest tax abatement on Ritz-Carleton hotel.
- $10-million from RTA as a result of a lawsuit as Forest City acted as construction manager for RTA’s station in FOREST CITY. (Add $1.7-million ruled by an arbitrator who tacked on $708,000 with an interest rate of $16.5).
- $13-million by RTA for walkway from Gateway into Tower City.
- RTA pays about $1 million a year to Forest City for common area maintenance at its Tower City station. Then Forest City charges $75 a month (may have gone up) for rubbish collection; and tens of thousands of dollars for electricity, heating and air conditioning (2000 figures).
Sam and the Ratners have asked, as far as I know, for no plaques. Just give them the money.
I guess we’re still going to spent $1 billion on an unnecessary convention center because our Civic Leeches can’t think of what else to do.
The Economist Magazine took a look at Cleveland in the late 1990s in an article appropriately entitled: “Has Cleveland mortgaged its tomorrows?” I’d say Cleveland just gave tomorrow away.
The article ended this way: “New buildings look good, but often money is better spent on people. Oddly, the city’s earlier barons knew that. John D. Rockefeller poured his millions into education (In Chicago, however, since our leaders spurned his offer). The Mathers, of coal fame, put theirs into hospitals. And even the Van Sweringens, who ran a huge railway trust and were great builders, had a different view of urban development. They financed a whole new suburb, Shaker Heights, early this century. And they did it without a public subsidy.”
Now, the private interests simply line up for a swig and the swag at the public trough.
Human pigs. Very big appetites.