Posts Tagged Gund

Gund Grant to Cleveland Schools… Such an Irony

Posted by Roldo Bartimole in Economic Development, Politicians on February 28, 2010

February 28, 2010… Think of the irony of it. The Gund Foundation is giving the Cleveland schools $2.5 million of dollars, according to a Page one story today in The Plain Dealer. Isn’t it ironic – or at amusing – or a dime on a dollar – that the Gund family took MANY millions FROM the city’s schools.

The Gunds were big property tax evaders.

Yes, it is a good move for the Gund Foundation to give $2.5 million with a promise of more. We should applaud for it. But let’s not get teary eyed.

It is so much as how the world works.

The rich get richer and they bequeath tax-free pennies from those they took.

The Gunds – George and Gordon – of course, once owned the Cleveland Cavaliers. Our sales (sin) taxes built the arena for them. They took us for plenty of dough.

They also benefited from an arena free of property taxes – millions of dollars each year. Most of it, ironically, from the schools. Cleveland schools that is. A peak at how millions are lost:

http://www.clevelandleader.com/node/11689

The Gunds bought the Cavs from Ted Stepien before the 1983-83 season for some $20 million. The brothers sold the team for $375 million in 2005. Nice profit. After, of course, we provided them with a new arena. And parking. And a couple of free loges. Nice deal if you can get it. And if you have the dough you can.

Ironically, David Abbott in the early 1990s was Cuyahoga County chief administrator. Gateway was launched in May 1990. Abbott, who left in 1993, was a Tim Hagan man. Tim, of course, promoted Gateway. He was chief lobbyist, along with Mike White, in obtaining a full tax exemption for the arena building. It will never pay property taxes.

Abbott today has his picture on the PD front page as Gund Foundation executive director ($300,000 a year). He has certainly become a favorite person of the Pee Dee, where (maybe another irony) he once was a reporter.

And not to be paranoid or anything, Abbott also was an original board member of the Gateway Economic Development Corp. Gateway was very, very good to the Gunds. Gateway board members sort of ignored big overruns on the Gund arena. No good deed goes unrewarded in this game.

Abbott is a past director of University Circle, Inc. UCI is pressing hard for the Opportunity Corridor $375-million road to UC. Of course, the Gund Foundation gave the road project pushers $100,000 to start.

Money goes round and round. Some sometimes trickles down to where it is needed.

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MMPI Gets $1 Million Every Quarter with No Details

Posted by Roldo Bartimole in Economic Development, Politicians on November 18, 2009

November 18, 2009… I find the way MMPI bills Cuyahoga County for its monthly “fee” an example of bad management taken to extreme. The billings tell the County nothing of what MMPI does for its healthy fee.

Here’s what the entire “invoice” from MMPI says as a description of what it did for $333,333.33 – or a penny shy of $1 million every three months:

“Const. Mgmt/Developer fee – $333,333.33. Total due $333,333.33.”

That’s it. Pretty much a blank sheet of paper.

No mention of what work might have been done. No mention of how many people did what. No mention of money paid out by MMPI. No mention of hours worked. Not a shred of documentation. Nothing. Nada.

Now that’s the way to be able to bill a client. Sweet.

Just take our word for it, says MMPI. We’ve been giving you $333,333.33 worth of service this month. And on every 15th of the month the bill comes. And we pay. Now, since March, MMPI has pocketed $2.3 plus million. So every quarter another $1 million goes from the County to MMPI on a fee basis.

You’d think that Tim Hagan would have learned the lesson from Gateway when he and Mike White allowed the construction of the arena to go forward BEFORE they got the signature of George and Gordon Gund on line to occupy the Gateway arena.

Having started construction, the Gunds had them over a barrel. And they rolled that barrel over and over again until they got as sweet a sweetheart deal as one could get. Now Dan Gilbert enjoys the same sugary deal.

MMPI, Hagan warns now, could walk away from the Medical Mart/Convention Center deal.

Wish that they would.

That $80 million or so collected on the quarter percent sale tax increase could go for better uses. Might even bring Public Auditorium to its former state.

The County also has a letter from MMPI attesting to other costs, $2,443,573 from “its pre-construction design building and various consultants for performing work on the feasibility plans, as described in Section 2.3 of the Development Agreement dated April 16, 2009, according to a July 15th letter to the County’s project director Barbara Shergalis. This is based on a request I made for documentation of billing.

The County does have backup documentation describing the different tasks that require $2.4 million in payment.

But this loose “fee” of a third of a million bucks every three months, worked out by the County and Fred Nance of Squire, Sanders & Dempsey, strikes me as the kind of an accounting that skips accounts. It allows a profit without a clear explanation of what the clients – we taxpayers – are getting for our money.

Hagan likes this kind of accounting for his friends of the Kennedy clan. The rest of us shouldn’t. It becomes more unacceptable as time goes by.

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