Posts Tagged Forest City Enterprises
RTA Takes Us For The Wrong Ride
Posted by Roldo Bartimole in Economic Development on July 18, 2009
July 18, 2009… Is the Greater Cleveland Regional Transit Authority (GCRTA, bkna as RTA) taking us on another ride? As a transit system, it seems more like a servant of the same old special interests when it should be taking care of transit-dependent citizens.
Yes, I believe RTA does have a money problem with sales taxes and ridership down. Raising fares hardly seems the solution.
However, I also know that RTA hasn’t paid enough attention in the past to its spending. If it did RTA wouldn’t have to be cutting crucial services now.
We’re being told that there is a $5.5 million problem. The solution for RTA’s management is to cut services and raise the price by 25 cents.
That appears to be not a palatable solution.
If CEO and General Manager Joe Calabrese and his RTA board can’t find $5 million in his more than $240 million (2008) budget, then we need to get someone who can do the job.
RTA has become too accustomed to providing services that aren’t really necessary. Too comfy saying yes to the downtown scrounges.
The Euclid Corridor Improvement Project (Health Line) was a perfect example of spending transit money for non-transit purposes. The road was plenty wide for RTA buses. I’d like to know the annual upkeep costs of this Euclid Avenue beautification program.
If you’ve got a lot of extra money to spend, fine, beautify. However, RTA’s primary task is to move people from where they are to where they need to go, especially people who can’t afford to own vehicles.
RTA spent $69 million of OUR dollars for the Waterfront Line, rushing it to please Mayor George Voinovich and his buddy Dick Pogue. They wanted it up for the opening of the Rock Hall of Fame and their parties. To get it done, RTA had to forget about federal subsidy, which probably would have covered 80 percent of the cost. The Waterfront Line was ill-planned and now it ill-serves.
The Waterfront Line service has been cutback. It’s important that RTA tell us just how much it costs to keep this line operating at any level. Maybe it should be mothballed totally.
Equally unnecessary for RTA was the walkway from Tower City to Gateway, a cost of some $11-13 million. I’ve never been able to get an undisputed figure. RTA has to “reimburse” Tower City for utility charges on the walkway.
It’s time RTA got tough and told the Gateway Economic Development Corp., which operates the Gateway facilities, that it has to pick up the cost of the walkway and pay to have its fans delivered to its doors. Why should RTA’s riders pay for this?
Despite the fact that these RTA facilities help Tower City, RTA pays some $1 million a year to Forest City Enterprises, owner of Tower City. It’s annual fee for RTA’s use of space into Tower City. RTA pays an addition $32,000 to “reimburse” Tower City for central plant operations. It even pays a utility charge for use of the escalators! There’s room for negotiations here to lower costs.
Isn’t it time to renegotiate these fees lower since there’s less use and Tower City seems to always get reductions of its property taxes?
The County or the State needs to provide more funding to RTA, too. Why shouldn’t there be subsidies for mass transit? It’s a method of lowering pollution and reducing traffic. We build enough roads for cars.
A small surcharge on every car in the County each year should produce the kind of revenue needed for mass transit.
How Hypocritical Can Sam Miller Get Before We Laugh Him Out of Town?
Posted by Roldo Bartimole in Economic Development, Media, People on June 26, 2009
June 26, 2009… Hypocrisy – thy name is Sam Miller.
Forest City Enterprises Co-chairman and Treasurer Sam Miller says he’s willing to donate to the Cleveland libraries if budget cuts are made by the State of Ohio. Sam says that he will donate to keep libraries in poor areas open if the cuts are made.
Generous Sam.
He made that statement to The Plain Dealer as reported in its piece on protests against state budget cuts at the downtown public library.
The Plain Dealer the same day also reported on its front page about citizens attempting to lower their property taxes by lowering the value of the property as homes lose value.
Lowering the value of property hurts schools and libraries. It also takes from Cuyahoga County and the City of Cleveland by lowering revenue from property taxes.
Guess who is a champion of seeking (and getting) property tax reductions?
Well, of course, Sam Miller.
In other words, Sam takes dollars away from libraries and schools but in a pinch he’s willing to donate. Pennies, that is.
City libraries get 7.96 percent of collected property taxes. Cleveland schools get 55.13 of property taxes.
So every time Sam gets a reduction in taxes, revenues fall by those above percentages for the libraries and schools.
Does he really care?
No, he doesn’t. Sam has been a major downtown property owner who consistently applied to lower the taxable value of his properties. That’s good ole Sam. Not so generous.
Back in 1994 – and other times through the years – I’ve written that Forest City Enterprises – of which Sam is a top executive and shareholder – has sought large decreases in property taxes.
I reported tax reductions given for Tower City in 1990, 1991, 1992 and 1993. Tower City is owned by Forest City.
They were hefty reductions, too.
In 1990, tax reductions awarded to Sam and his boys were as follows: Reductions in 1990 of 21 percent; in 1991 of 20 percent, 1993 of 17.3 percent; 1993 of 12.4 percent. It’s a wonder they paid any taxes.
The reductions in value for those years totaled $160 million. Assessed value would be 35 percent of market value. The money value of the taxes was $56 million, 35 percent of $160 million. I guess Sam could have been a bit generous but he wasn’t.
Indeed, the Cleveland Teachers Union at the time asked Tower City, Gateway, National City Bank and Dick Jacobs at Key Center to forgo their tax abatements for one year because of the funding crisis of that time. One year!
Neither Sam nor any of the others found a charitable bone for the Cleveland schools. The answer was “NO.” Generosity can go just so far. And that ain’t very far for these guys.
At the time, of course, our civic cheerleaders were pounding home the message that downtown Cleveland was booming. Comeback City, they claimed.
The only boom – aside from publicly funded and non-taxed private ventures as Gateway – was the noise out of Sam’s office asking for tax reductions.
Generous Sam. He knows how to do PR and the PD knows how to report it without context. Context isn’t taught at the PD.
At the time Sam was asking for these reductions, the PD reported some balderdash under this headline: “Tower City Could Add Two Anchors to Complex.” The paper quoted Al Ratner, Forest City chairman, saying that “… he hopes to add two department stores to the Tower City Complex soon.” Yeah, empty ones. Such amusing claims of progress. And at the same time asking for tax reductions because business was bad.
I’ll say one thing about Sam and the Ratners. They sure know how to juggle.
The Pee Dee added that Ratner said, “Gateway has been a very big impetus for this project.”
Should we all laugh loudly now?
Miller at the time said the real estate industry in Cleveland was “well on its way back to once again becoming the darling of the investment community.”
My response at the time was: “Ho, ho, ho.” It hasn’t changed.
Miller and the Ratners also arm-twisted City Council (not hard) to give a tax abatement of 100 percent for 20 years for the Ritz-Carlton Hotel at Tower City. The hotel had already been planned but they saw that Council gave Dick Jacobs a $120-million tax abatement for the Society Center (now Key) and Marriott Hotel.
So they wanted to escape paying property taxes, too. Generosity? No. Rapacity? Yes.
It’s a game these guys play. Let’s shift our taxes to others. It adds to our profits.
I wonder how much a role tax abatement for housing downtown has played in the foreclosure issue as the city’s neighborhoods empty out. Those with more money, however, can get new housing without having to pay taxes. The revenue resources of the city decline.
Years ago Robert Reich, then Secretary of Labor, said, “Bidding wars that are initiated and conducted by companies, or joined in by states or localities, can have a pernicious effect with regard to undermining the abilities of states and locales to use their resources to educate and develop the human capital of their workforces.”
He went on to say, “These tax abatement, these subsides, can be the most insidious form or corporate welfare… (that) put competitors at a competitive disadvantage if they do not get the same largess, because they rob local jurisdictions and states of the resources that they otherwise might have to invest in people, in infrastructure, and because they are often, in the classic sense of the term, zero-sum games in which jobs are simply moved from one place to another, and there is not a net improvement in job growth or the quality of jobs.”
He could make the speech in Cleveland and talk about Sam any day for the last 40 years or more.
The truth is Sam Miller isn’t a philanthropist. He’s a greedy businessman.
Sam, we don’t need your stinkin’ donations. Just pay your rightful taxes.