Posts Tagged National City Bank
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.
Has Cleveland Really Changed Since 1988?
Posted by Roldo Bartimole in Economic Development on June 16, 2009
June 16, 2009… I’ve been rummaging around in old stuff trying to put some old writings in some order. I came across a column from June 1988, that I’ll repeat below.
I think it stands up 21 years later and provides some background or, if you will, history. It was entitled “When Duties Become Incentives” and appeared in the Cleveland Edition. Boy, do I miss the Edition. Here it is…
I have a friend who from time to time chastises me about the nature of my negative attitudes toward the Cleveland Establishment and its role in Cleveland affairs.
He suggests that in addition to writing about the problems one should be encouraging the Establishment to take on a role in solutions.
He has the belief that “if they knew,” they would do something about the conditions.
My view of the track record makes me rather skeptical – even horrified – of inviting the Establishment to roll-up its sleeves.
The fact is, however, the Establishment knows only too well about the city’s condition in leadership and direction.
Indeed, it is that conglomeration of Special Interests that we call the Establishment that benefits most from the way things are.
Oh, yes, things could be better and that would be fine.
But the important factor is that nothing interfere with what’s crucial – business and profit.
Corrupt government is tolerable. As long as it is corrupt in the correct direction.
The Establishment is interested in stability and predictability.
In the late 1960s and the 1970s, what my friend wants for Cleveland now, was called Corporate Responsibility. Even that was a misnomer. It really was, “keeping the lid on.”
The Civil Rights Movement and the street riots put pressure on the city and the Establishment because it was disruptive and unpredictable. That condition no longer exists. And without the pressure there’s little incentive apparently to deal with the problems and frustration in the 1980s.
But it has been the experience of more than 20 years here that when the Establishment gets involved, it isn’t as much to benefit the city as itself.
When there was instability in the Cleveland schools in the early 1960s, the Establishment moved, responding with a new superintendent and an edict. No criticism, give him a free hand.
Paul Briggs, with that edict, brought peace. He also built school after school in segregated neighborhoods leading directly to the discrimination ruling of the federal court and today’s problems.
Cleveland’s devastated neighborhoods also can be traced to Establishment involvement.
A HUD official once told me that Cleveland in the 1960s was his department’s Vietnam.
“We’d like to get out but we don’t know how.
What happened was that the Establishment, eager for renewal – particularly development downtown – pushed the city into applying for more renewal projects than the city could possibly handle.
When the job was bungled, the disaster led to mass movement of displaced people who had no replacement housing. The result is what you see in much of the eastern inner city today.
One summation by a Cleveland banker always rings too true as an explanation of this chapter of Establishment involvement. He said that renewal worked well for some – commercial, industrial and institutional interests – but not for housing, thus not for the people of the city.
He then added: “I wish I could believe that all of this was accidental and brought about by the inefficiency of well-meaning people – but I just can’t. The truth, it seems to me, is that it was planned that way.”
Books can be written about these two aspects of Establishment involvement and thus how cities are governed.
In 1967, the late James C. Davis, managing partner of Squire, Sanders & Dempsey, gave a remarkable speech, “Cleveland’s White Problem.” It essentially blamed white ethnics for the problems of blacks thus absolving the Establishment.
Davis became a hero and began pushing his own agenda with the notoriety he got, a perfect example of an Establishment leader “getting involved.”
One Davis project was the Jetport in Lake Erie, a massive development to cost some $3 billion in the early 1970s. (I was shocked when I heard Brent Larkin recently on some program saying that this was Cleveland’s major mistake- not building the Jetport. What he’s saying is that we should have built – at incredible public cost – an island separated from the city. That’s what the Jetport would have been with office buildings, housing and much more.)
What Davis didn’t say when selling his program was that his law firm was the major bond counsel in Ohio thus could be expected to earn handsomely from the business of bonds to finance the venture.
But that wasn’t unusual – more like standard procedure when civic duties become business incentives.
A few years later, Squire-Sanders was the law firm that wrote the state enabling legislation for tax abatement allowing Cleveland to abate property taxes.
And, true to this form, Squire-Sanders was legal counsel to National City Bank for its abatement building at E. 9th Street.
It is now even more ironic that today’s $100 million or so tax abatement for the Society Tower complex will directly benefit Squire-Sanders.
The law firm will be a major tenant in the Jacobs’ tax abated tower (now Key Center).
I’m afraid that relying upon the Establishment as a panacea for today’s ills would be foolhardy.
The answer lies in all of us becoming true citizens and paying attention to our leaders. And in expressing some outrage at the despicable conditions we allow in Cleveland.