Posts Tagged Sohio
Major Institutional Failures Helped the Imperial Avenue Murderer
Posted by Roldo Bartimole in Economic Development, People, Politicians on November 11th, 2009
November 11, 2009… Were there failures or absence of institutional and community structure that helped make the mass murderer of Imperial Avenue get away with the killings so easily? Yes, there were.
People ask the question, why didn’t someone notice what was happening? How did this happen right under the noses of the police and the community? Where’s the “community?” What’s the matter with people?
Cleveland neighborhoods have been deprived of many things but likely most destructive has been the purposeful neglect and sometime suppression of community activism over a long period of time here. It has worked its destructive way.
You can’t have an aware, alive community that’s a repressed community.
Cleveland in the 1970s enjoyed strong community activism. There were many problems. But there was some fight in people! Neighborhoods formed their own power bases and community development corporations (CDCs) received federal and foundation funding for neighborhood improvement. People were feeling their power.
But there were flaws that eventually led to failure. It didn’t have to be.
Cleveland is a town with heavy upper institutional power. Lots of wealth. It rules. Not timidly at times.
Here’s Diana Tittle’s description in her book on the Cleveland Foundation called “Rebuilding Cleveland – The Cleveland Foundation and its Evolving Urban Strategy” that I believe has relevance to today’s situation:
“In funding community development corporations the Foundation reforged a precious link with the city’s community development department. But the narrow gauge of the Foundation’s interests exposed it to criticism behind certain doors. Because the CDCs concentrated primarily on rehabilitating commercial strips with new benches, street lighting, plantings and the like, the Foundation’s neighborhood program took on a decided bricks-and-mortar cast – much to the dismay of Harry Fagan, the architect of a burgeoning if loose confederation of neighborhood advocacy groups, whose activities the Cleveland Foundation seldom funded.”
Neighborhood groups in the 1970s got some funding and support, especially from the Catholic Commission. But it didn’t last, as we shall see.
The Cleveland Foundation and its sister the Gund Foundation could never countenance strong, demanding neighborhood groups. How could they accomplish their other desires – new stadiums, theaters, office buildings and other downtown amenities – AND neighborhood renewal? Attention strayed. There’s just so much to go around.
Tittle continued, “Executive director of the Commission on Catholic Community Action, the social-action arm of the Cleveland diocese, Fagan found the Foundation’s neighborhood program shortsighted and incomplete. ‘Any strategy that develops physical structure without developing people will fail,’ he believed. ‘The Foundation never understood that you’ve got to help moms and dads take responsibility for their neighborhoods.’
Help moms and dads take responsibility for their neighborhoods.
How important was that statement. Does not that say something about the failure of so many neighborhoods in Cleveland and elsewhere today? It does to me.
I think it has relevance to the Imperial Avenue killings.
Too much people power, however, makes civic and political leaders nervous. It can get out of hand.
The advocacy groups spurred by the Catholic Commission put pressure on officials. Sometimes too much.
A couple of incidents probably helped make neighborhood activism unacceptable to city leaders.
Mayor Dennis Kucinich, a progressive, got a taste he didn’t appreciate. It was the late 1970s.
During the Kucinich administration a Broadway neighborhood group went to the home of the mayor’s community development director making demands for a fire station. Instead of attention the director called the police. Later, a neighborhood organization dumped garbage in the office of Kucinich’s service director. Then some 500 senior citizens showed up at city hall demanding a meeting with Mayor Kucinich about safety. He ducked out of city hall but Council President George Forbes, his foe, walked out of his office to meet with the seniors.
The neighborhood groups were beginning to feel their power. They overplayed their hand.
In the early 1980s, neighborhood groups demanded $1 billion be set aside by SOHIO (Standard Oil of Ohio at the time) for conservation subsidies for low and moderate income people. At the time, SOHIO was enjoying mounds of cash flow from its Alaskan oil interests. It had more money than it knew what to do with. Literally.
But this was outrageous. A grab for an oil company’s revenue. Unheard of.
Then the unforgivable happened. It is described richly by Randy Cunningham in, “Democratizing Cleveland – the Rise and Fall of Community Organizing,” You can find my review of the book here:
The attack on the exclusive Chagrin Valley Hunt Club in Gates Mills. Cunningham writes:
“What occurred when the 600 demonstrators landed at the Hunt Club was not just a political event. It was a collision of worlds that barely recognized each other’s existence, and that never came into contact. That afternoon at the Hunt Club, the club chairman’s Saturday lunch was in progress. The veranda was full of well dressed diners while on the grounds members in English outfits were tending their mounts, gather for the afternoon’s equestrian events. (The target was SOHIO’s top executive Alton Whitehouse, who wasn’t there.)
“Pouring out of the buses were organizers in jeans and working-class and poor people in polyester. The Hunt Club never before seen so many African-Americans or so many who were not among those the English call ‘the great and the good.’ As Marlene Weslian of CBBB (one of the organizing units) remembered, ‘How dramatic to see the difference in how people live…. It was so clear who had it and who didn’t when you went there.”
The elite didn’t like it. Funding dried up.
The head of the SOHIO public relations staff said, “That was the last straw that really caused us to take steps to be sure that the usual funding organizations in the city knew what these groups were doing. Whether they were defunded, I don’t know.” The money dried up.
Here’s another example I’ve written about before. I’ll be brief.
A bonafide citizen’s organization fighting for better schools (what’s would be more important in Cleveland?) couldn’t get Mayor Michael White’s attention. So they went to his future wife’s Winton Place apartment to seek the mayor’s attention. Once again, it was the hoi polloi visiting the high on the hog.
They got White’s attention but the results were bad.
At the time the organization, Education/Safety Organizing Project (ESOP), a truly low income group, was on line for some foundation grants.
The Cleveland Foundation dropped them. $85,000 gone. The Gund Foundation dropped them. Another $85,000 gone. The Joyce Foundation of Chicago, working with the other two, dropped them. $160,000. Not a cent.
Cost of the little demonstration at the doorstep of the mayor’s girlfriend: $320,000.
“That’s severe punishment for a group whose parents are not only interested in the Cleveland schools but see their children being destroyed by the schools and the conditions around them.
“If anyone has the right to radical action, these parents do,” I wrote at the time.
Couldn’t the Cleveland and Gund Foundations handle it differently?
Couldn’t the non-profits try another approach? Cutting community activism has backfired on all.
Then, too, the CDCs became more as little housing developers than neighborhood-focused problem solvers. More creatures of City Council members. Not the teachers Fagan pictured to get moms and dads to take responsibility for each other and the neighborhood. Community became a victim.
Neighborhoods have fallen apart. They left no real glue of community to hold them together.
Cunningham quotes a former neighborhood staff member: “I don’t think they understand or see the need to empower people. Their goals are just mainly to develop real estate. They don’t do any other type of organizing.”
The civic and political leaders got more silent neighborhood reaction. They un-powered the neighborhoods. The neighborhoods got more apathetic. Apathy trumped controversy. Apparently, the exchange suited Cleveland’s leadership.
So the eyes and ears to watch over neighborhoods that would be encouraged by organized citizens – not there anymore.
It hasn’t been a good exchange for neighborhoods.
Eleven women may have paid the ultimate price for the comfort of civic and political leadership.
Neighborhoods continue without street leaders. That was too uncomfortable for some. The city continues its steep decline.
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Park Building – From Tax Reduction to Tax Abatement
Posted by Roldo Bartimole in Economic Development, Politicians on August 5th, 2009
August 5, 2009… I was passing by the Park Building on Public Square and Ontario Street recently and stopped to ask about the new condominiums promoted for the old office building.
The Park Building is historic in many ways.
Its handout says, “The Park Building, one of the most elegant buildings in Cleveland, offers the only residential units on Public Square in over 100 years. The Cleveland landmark features 25 exclusive condominiums, including four stunning two-floor penthouses with large ‘window walls,’ and balconies with inspiring views that take in Public Square, Lake Erie and the entirety of Cleveland’s downtown.”
The condos range in $269,900-$359,000 price to an offer of a custom penthouse “starting in the $700,000’s,” a flyer says. Pricey, no?
As long ago as 1919, the Park Building had a special place In Cleveland.
“The southeast corner of Ontario Street and Public Square, the land on which the Park Building and adjacent structures stood was the most valuable acre in Cleveland, being assessed at $2,178,000…” wrote William Ganson Rose in his Cleveland history, “Cleveland – The Making of a City.”
The building, and its one-time owner David Swetland, had an even more significant impact on property values and taxes for the entire State of Ohio. Swetland sued the County, claiming in essence that his office building should not pay more taxes proportionally than his home.
Indeed, that ALL property should be taxed at the same value.
In that historic Ohio Supreme Court case – known as the Park Investment case – in the late 1950s, the whole system of taxing property was changed significantly. Homeowners paid the price. The change helped commercial and industrial properties to shift more of the burden of taxes from real estate interests to homeowners.
The Ohio Supreme Court ruled for Swetland that property should not be taxed at different rates. Commercial and industrial properties – because they involved profit – had been paying taxes at a higher level than property used to house families. Taxes are paid on 35 percent of the market value as set by County Auditors.
The Park Investment case tipped taxes from real estate interests to the owners of homes.
Commercial and industrial properties had been taxed at 49 percent of their market value. Homes were taxed at 35 percent of market value. The Court leveled the payments for both classifications at 35 percent. So, commercial and industrial property owners enjoyed a 14 percent reduction in their taxes.
What does that mean? Well, the value for 2009 property taxes of commercial and industrial properties in Cuyahoga County is $8.4 billion, according to the County Budget department.
A 14 percent savings is $1.176 billion. That’s for one year! Multiply that by the years since 1959 and you see that it’s a whole lot of money.
Without tax abatement. However, since the late 1970s, tax abatements have been generously given to property owners.
The Ohio Supreme Court, as might be expected, gave those with wealth a big financial break. It’s a gift that keeps on giving, year after year.
One might say that this ruling sets a precedent that communities should not be able to offer tax abatement since they allow properties to be taxed at different levels. It gives an unfair preference to newly develop property. Sometimes that unfair preference is very significant, as properties are abated at 100 percent for 20 years.
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Note: I recently reported on the cost of tax abatements for just for two years on eight Cleveland properties. The cost came to $48 million. That was just for the most recent two years. The detail of each property is published here at ReadRoldo.com. Simply click here to reference.
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The abatement subsidy started in the late 1970s when Squire, Sanders & Dempsey, acting for major property owners, wrote the state law that passed in the Ohio legislature.
It promptly became an issue in the 1977 Cleveland mayoral election when Mayor Ralph Perk bestowed a tax abatement for a new National City Bank building at the southwest corner of East 9th & Euclid Avenue and one for Sohio (at the time) for a new building behind Tower City. (When Sohio moved to Public Square it didn’t ask for tax abatement since it was drowning in North Slope cash. Sometimes unseemly does win.)
Dennis Kucinich beat his general election opponent Edward Feighan on the head over tax abatement since Feighan had voted for the legislation as a state legislator. Kucinich opposed abatements and gave none.
Abatement thus became a hot political issue and it took a few years before local politicians to believe it cooled enough to restart the give-aways.
Mayor George Voinovich and Council President George Forbes revived the practice with hefty abatements for major projects. It grew during the White administration and expanded even more when Mayor Michael White and County Commissioner Tim Hagan took it a bit further with tax EXEMPTIONS for stadiums and arenas. Multi-millions of dollars in tax revenue went down the drain.
Giving away tax revenue became so pervasive that the Cleveland Teachers Union, under Rich DeColibus, decided to do something about it in the late 1990s.
The rub was the city gave the tax abatement; the schools lost the most revenue.
The mayor and city council enacted tax abatements but the Cleveland school system lost the bulk of the revenue, usually near 60 per cent. Presently, the schools lose slightly more than 55 percent while the city loses slightly more than 15 percent.
Abatements thus don’t much disturb city finances. In fact, they may enhance city revenues since the city alone gets payroll taxes, which may increase from jobs and new residents. They do great damage to the schools, however, which don’t share in any income related taxes.
That’s the way it stood until the summer of 1997 when the Teachers Union got 33,000 signatures to put an issue changing tax abatements on the ballot.
The Park Building, as we’ve seen, played an important part in lowering property taxes for commercial interests. Not much has changed. The Park Building Condominiums are offering 12-year tax abatements, 75 percent the first five years; 50 percent the second five; and 25 percent the final two.
Some things never change – for the better.
I’ll talk about that vote in subsequent comments.