Posts Tagged Mall C
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 Gets More, County Spends Another $600K on Medical Mart Deal
Posted by Roldo Bartimole in Economic Development, Politicians on November 19, 2009
November 19, 2009… Cuyahoga County has paid MMPI another $1,240,799 in addition to the monthly fees of $333,333.33 according to figures from the County Auditor’s department.
The monthly fees have cost County taxpayers some $2.3 million to MMPI. As I noted earlier, MMPI collects this each month as a fee and gives no details of spending for the monthly check. The added $1.2 million went for other tasks performed for or by MMPI.
In addition, the County itself has spent $611,801 of the sales tax monies collected since January 2008. The total collected as of the end of October was $74,454,985.70.
The breakdown of the County’s expenditures is $61,517 in salary, $9,839 in benefits and $540,365 in contracts associated with the Medical Mart and Convention Center project. I am seeking a breakdown of the $540,000 payments.
The three payments made to MMPI, the Chicago firm contracted with to build and operate the Med Mart and Convention Center by County Commissioners Tim Hagan, Jimmy Dimora and Peter Lawson Jones, were in the amounts of $125,185, $385,129 and $730,485, according to the County Auditor.
MMPI this week sent its representatives to Cleveland City Council after it “trashed” – in the words of the city administration – Public Auditorium and decided the original deal was off. Public Auditorium and the city’s convention center were to be part of the new project. The city and county had agreed to a $20 million payment for both.
With the Public Auditorium out of the picture, the city wanted clarification.
MMPI also dropped negotiations with property owners at St. Clair and Ontario, nearby the present and proposed convention facilities. Representatives of the property owners claim that MMPI never seriously negotiated. The property was to be used specifically for the Medical Mart.
MMPI now apparently wants to put its Medical Mart on Mall C. This is city property and long has been held sacrosanct as part of the Group Plan. Only public buildings and the Malls make up this area of downtown.
None of the Group Plan, originated in the early 1900s as Cleveland grew, would ever have been open to a private business.
Council President Marty Sweeney rushed Tuesday’s meeting with MMPI representatives. Sweeney said at the outset of the meeting that they had a deadline so that MMPI representatives could leave City Hall in time to catch a flight at about 5 p. m. back to Chicago.
One guesses that the MMPI contingent at the meeting want to make sure the meeting at City Hall wouldn’t go long, so they set an early afternoon flight back to Chicago. Mark Falanga of MMPI, however, said he would agree to a request for four more meetings with the city. One would hope that air flights wouldn’t determine how brief the meetings would be. Maybe even the public might get an opportunity to make its views known on a project that appears ready to go off track.
The “trashing” of Public Auditorium, after the agreement seemed set, has angered city officials, including Mayor Frank Jackson. It could make the use of the hall impossible as the safety of the building is now in question.
The public ought to be even more angered by the attempt by MMPI to intrude on public land overlooking the lake.
Talk of the exclusive use of this land for public buildings goes back to the late 1890s.
“According to “Daniel Burnham’s biographer, Thomas Hines, ‘The first urban reformer to exploit Burnham’s talents was Cleveland’s controversial mayor, Tom L. Johnson,’” Eric Johannesen writes in his book, Cleveland Architecture – 1876-1976. Johnson was considered a leader of the Progressive Movement in cities. Johannesen wrote, “In this (progressive) atmosphere arose the ‘City Beautiful’ movement, of which the Cleveland Group Plan was a preeminent example.
It would be more than a shame to place a trade show building amidst these government buildings.
Talk about a Mistake on the Lake. This would certainly be it.
UPDATE… More on the breakdown of the $540,000 figure mentioned above. The breakdown is as follows: Fred Nance of Squire, Sanders & Dempsey, $175,000 for negotiating with MMPI for the County; Bricker & Eckler, another law firm for legal work, $60,000; Osborne Engineering, $152,342; and Conventional Wisdom Corp., of Orlando, Fla., $142,247 for providing the County with construction requirement of the project. Other incidental payments bring the payments to $540,000 in contracts by the County on the Med Mart/Convention Center project thus far.