Posts Tagged Jim McCafferty
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.
MMPI Playing with Cleveland, Cuyahoga County
Posted by Roldo Bartimole in Economic Development, Politicians on November 17, 2009
November 17, 2009… I talked with MMPI’s Mark Falanga after a three-hour Council briefing to ask a simple question. Did MMPI expect to build a private medical mart on public land at no cost?
MMPI’s Falanga told Council that among a number of possibilities examined, MMPI wanted to build its Medical Mart on the Mall area between City Hall and the County Courthouse overlooking Lake Erie. Well, who wouldn’t, especially for nothing.
Falanga kept saying that the County was paying the City of Cleveland $20 million, as if that answered my question. The $20 million was for convention center and public auditorium. The latter Falanga has tossed out as useless or worse.
The site originally expected to house MMPI’s Medical Mart was on private land that had to be purchased. MMPI failed to make a deal.
I asked Falanga that since MMPI was rejecting the purchase of private land at St. Clair and Ontario Avenues was he now proposing to build it on private government land, the Mall, at no cost. He told Council members that the owners wanted $24 million, a budget breaker, for the St. Clair site.
But he wouldn’t answer my question. He kept dodging it by referring to the $20 million deal between the county and city.
A cost for the city land hardly got mentioned by city officials.
Not until late in the three-hour meeting did a Council member address the question of payment for the site Falanga proposed for the Medical Mart. Zach Reed asked Falanga, “Are you going to pay for Mall D?” That’s what Falanga called the site where he wants to build. I’ve never heard of Mall D. It’s really Mall C and the overhang down toward the railroad tracks.
He told Reed that it was included, apparently referring to the $20 million price tag agreed to by the city and county. Reed, unfortunately, dropped it there.
Since he was expecting to pay $17 million – an estimate set by the Greater Cleveland Partnership – for the Ontario/St. Clair site, what was he going to pay for the city’s land, I continued to ask.
Falanga did the fandango.
Here he was bald-facedly expecting me to believe that he shouldn’t have to pay for a site overlooking the lake because he couldn’t – or wouldn’t – deal for a site overlooking St. Clair and the side of the Marriott hotel.
Falanga – who one Councilman credited with a good poker face – gave me the poker face. He said that the County was paying the city $20 million for the convention center, indicating that that covered the price where his business was going to go.
Apparently, that’s what MMPI has wiggled itself into and seems to be making progress convincing City Council and the Frank Jackson administration.
MMPI told Council that it couldn’t deal with land owners at St. Clair and Ontario. They were asking too high a price. These properties were needed to build the medical mart as part of the deal for a new convention center. Falanga said that the price of $17 million was too much. Two representatives of the owners at the meeting said after that MMPI had not negotiated with the owners. One said MMPI had made two telephone calls to his client. Another said MMPI offered $800,000 to one parcel owner and the owner countered with $6 million. But there was no dickering. No counter offer. They just walked away.
Council members were worried about the future use of Public Hall. Three, unfortunately, pressed County Administrator Jim McCafferty to press the County Commissioners to extend the sale tax increase voted to fund this project.
Council members Brian Cummins, Mike Polensek and Matt Zone asked that the quarter-percent sale tax increase be extended five more years beyond the 20 years the Commissioners voted. That would bring in more than $100 million. McCafferty said that the Commissioners had extended themselves as far as they would on the sales tax.
The idea that Cleveland would allow a private business to build a Medical Mart on public land at no cost and violate the Group Plan for government buildings going back to the start of the last Century attest to how corrupting and indifferent our governing bodies have become.
It’s likely unthinkable that any city administration would even consider allowing a private business to occupy that Mall space.
This is what Harper’s Weekly said of the Cleveland plan back in 1904:
“Probably no city in the country, outside the capital, has undertaken the systematic development of public architecture and parkage (parks) on so splendid a scale as has the city of Cleveland…. (The creation of the Group Plan Commission is) the most significant forward step in the matter of municipal art taken in America. It is comparable to the designs of Napoleon III, who remade Paris… or to the prescience of Jefferson, who called to the aid of the new government a distinguished architect in the laying out of the national capital on its present scale… Here is a city among the most radical in its democratic tendencies of any in the country courageously authorizing the expenditure of from ten to fifteen million in the development of an idea. It suggests a new conception of the municipality.”
And we’d ruin that for a so-called medical mart.