Posts Tagged Hagan
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.
Interest on Med Mart Tax is Kicking Income Up
Posted by Roldo Bartimole in Economic Development, Politicians on November 23, 2009
November 23, 2009… Cuyahoga County expects the Medical Mart fund to be at about $80 million by the end of this year. That’s a few million dollars less than expected because sale tax revenue has been down. However, that doesn’t include investment earnings that add to the fund.
The interest rate presently earned on County money is 2.97 percent, slightly down from 3.17 percent, according to investment officer Terry Maltarich of the County Treasurer’s office.
Over two years the interest earnings are expected to be $1.2 million this year, some $2.4 million over the first two years of the tax. The tax was voted by Commissioners Tim Hagan and Jimmy Dimora. Collections began in January 2008.
County Administrator Jim McCafferty told City Council last week that revenue expected via the extra quarter percent sales tax was lower than expected. He didn’t mention that the County had invested those receipts or any resulting earned income.
Even at $40 million a year the 20-year tax should raise $800 million dollars, a hefty sum, primarily to be paid to MMPI, the Chicago firm hired by Commissioners to build and operate the Med Mart and Convention Center.
However, the sales tax is likely to produce far more than $800 million unless we never have an economic recovery.
The economic recession can be blamed for the lower than expected sales tax revenue. Lower inflation also hurts revenue derived from sales.
Over the 20-year period we are likely to have better economic times and price inflation. Both will result in higher sales tax revenue. That will likely kick the revenue on the quarter percent sale tax increase for the Med Mart above $40 million a year. Indeed, the first year’s collection totaled $42.1 million.
In addition, funds collected during this early period before construction costs kick in are being invested by County Treasurer Jim Rokakis.
So the Medical Mart fund is being enriched at some $1.2 million more than the actual collections this year, a year of slow sales tax collections. Interest rates are lower also.
We can expect higher revenue from the sales tax in coming years and more interest income until major costs of construction kick in.
MMPI has an enticing pot of gold to mine at a time when financing is difficult to obtain. This combination makes it hard to believe MMPI will leave Cleveland.
Something else is going on with MMPI’s recalcitrant attitude about negotiating a purchase of the corner properties where the Med Mart was originally scheduled to be built.
MMPI seems to be holding out for something it never should have – a building location on Mall C property overlooking Lake Erie for its Medical Mart.
MMPI should not be allowed to build on government land, particularly not on land long ago preserved for public buildings ONLY.