Posts Tagged Squire-Sanders
Stimulus Money to Save County Money on Medical Mart
Posted by Roldo Bartimole in Economic Development on April 30, 2010
April 30, 2010… Cuyahoga County could save up to $1 to $2 million a year in interest for the Medical Mart/Convention Center by using bond borrowings allowed by federal stimulus subsidies. The subsidy would decrease the cost of borrowing.
The savings would depend upon interest rates at the time bonds are issued, likely this year.
Federal stimulus programs allow the County to reduce interest costs on some $94.1 million in borrowing, according to County officials.
I questioned whether the subsidies could be used for other County projects. According to Matt Rubino, County director of Budget and Management, this subsidy could not have been used for other County projects.
However, Rubino said, other County General Obligation bonds – some $43 million – had been used already via the stimulus funding to help support the County’s new Juvenile Justice Center cost.
Tim Offtermatt, senior vice president of Stifel Nicolaus & Co., said that bonds for the project could be issued as early as September of this year. He is handling some financial aspects of the bonds. Squire, Sanders & Dempsey also will participate in the bond issuance.
The stimulus money gives the County the ability to borrow at a lower cost. It is not a grant but allows the cost of borrowing to be lowered as the feds subsidize some of the cost. The federal subsidy will apply to some 45 percent of the interest on $94 million in bonds, according to Rubino.
Cuyahoga County was able to increase the amount of bonding to be covered by the special funding because other counties in the state did not use the total allocated for Ohio. Money from the unused state allocation was then shifted to Cuyahoga County at its request.
The complicated allocation of subsidy allows the County to use some $20 million of borrowings on public aspects of the project. For example, the cost of new sidewalks, grass and reconstruction over the rebuilt underground convention center and new street reconstruction would be eligible for the subsidy.
The federal subsidy would lower the interest costs even below the cost that would apply to tax-exempt bonding for public purposes. Because of the private aspects of this development by MMPI of Chicago, bonds would not have necessarily been at tax-exempt rates.
Bonds that were not tax exempt would have cost the County project more dearly.
The County has collected more than $91 million in sale taxes on the quarter percent sales tax voted by the County Commissioners for this project. The tax has a 20-year term. It took effect January 2008. It will likely raise some $800 million over 20 years. The project’s estimated cost – without the cost of borrowing – is some $425 million.
I had questioned whether the County could have used this special subsidy to enable it to do other projects, for example, redevelopment of the Ameritrust property at E. 9th and Euclid Avenue.
According to Offtermatt, the Medical Mart/Convention Center project is the only one ready to go, a stipulation for the use of the special stimulus program funds via the state allocation.
County officials said that this should insure the project would come in within budget. We’ll see.
Can Anyone Expect a Public Official to Notice?
Posted by Roldo Bartimole in Economic Development, Politicians on April 3, 2010
April 3, 2010… Is there a Cleveland City Council member who can show any moxie when it comes to pursuing a bit of economic justice in this town? Nah. Too much to expect.
Public servants don’t seem to want to provide that service. Seeing justice is out of their line of sight.
Maybe it’s too much trouble too. Maybe they just don’t see the necessity. That happens a lot. They aren’t a very zealous crowd it seems. I don’t sense much passion there. More like bureaucratic. Short on compassion. Where’s Fanny Lewis?
Anyway there seems to be a dearth of people who even think in those 60ish terms any more. It’s a shame. We have lost so much of our passion about what’s wrong. Our city and culture reveal it.
The reason I’m bringing this up isn’t new. I’ve mentioned it before. Likely I’ll mention it again. And again. Probably AGAIN.
Here’s the deal: Billionaire Randy Lerner has a sweetheart contract. It was given to him by former Mayor Michael White and his favorite lawyer, Fred Nance of Squire Sanders & Dempsey. Quite a duo.
We continually pay dearly to see that the Lerner family does well. Since August of 2005, we county taxpayers have contributed $63,867,150.83 to help the City of Cleveland pay to build Browns stadium By the way, it is used about 10 dates a year.
That $63 million represents taxes we paid on cigarettes and various forms of alcohol as of the end of March. We also pay, but it isn’t recorded, 7.75 percent regular sales tax on the $63 million. That represents another nearly $500,000. This, folks, is real money.
Lerner, owner of the Cleveland Browns, pays almost no rent for a stadium built entirely by the taxpayers of Cleveland. A stadium, by the way, that pays no property taxes on the structure. He got the bargain $250,000 a year rent, never to rise. And the city gave the extra bargain of picking up the insurance costs of the stadium, thus the Browns.
As I’ve mentioned before, the city pays the property taxes on the land, which was provided by the city free of charge.
The city pays much more for the land property taxes than Lerner pays – or will ever pay – to rent the whole thing. The city pays more than $400,000 annually. Where can you get a deal like that? No where. Unless you’re very, very rich.
Do you think Mayor Frank Jackson would have the sense to tell Lerner – time to renegotiate the terms of the lease? You got a sweetheart deal, Mr. Lerner. Now, it’s time to pay a just price for use of the facility. Our city needs it. Our school children need it.
Jackson, of course, should have done this a long time ago. But he won’t. Makes too much sense.
Especially since the Browns have a training center in Berea. That means that though the Browns play all their games at the city’s stadium at really bargain prices, the wealthy Browns players only pay partial income (payroll) taxes in Cleveland. Berea gets to share the tax revenue.
You would think that Jeff Johnson or Brian Cummins – two of the more progressive Council members – would say, “Hey, the city’s getting taken. Time to renegotiation with the Browns. Let’s bring Lerner in here.”
Or maybe, Dona Brady or Matt Zone or Kevin Conwell or one of the new Council members.
Is there anyone awake at 60l Lakeside? Guess not.
Easier, I guess, to add bucks onto residents water bill for garbage pickup.
For more vile details: How Good It Gets for the Lerner Family