Posts Tagged Tower City
Ritz-Carlton Asks for Two More Tax Reductions
Posted by Roldo Bartimole in Economic Development on September 4, 2009
September 4, 2009… Signs continue to suggest disaster for local government as property taxes are ready to tumble. Tower City folk are seeking more reductions in the property value of the Ritz-Carlton.
The downtown luxury hotel had enjoyed a 20-year, 100% tax abatement. Back on the tax rolls it now asks for reductions via a reduced valuation on the luxury hotel.
I reported earlier this week that the owners of the Ritz-Carlton, a partnership of Tower City, a Forest City Enterprises connected operation, asked for one parcel to be reduced in value for taxation by $105,736.
Two other filings at the Cuyahoga County Board of Revision show requests for parcels 101-23-103F and 101-23-108F to be reduced by $63,752 and $71,952, respectively. Another $135,704. The parcels are on Huron and Prospect Avenues. These reductions would affect last year’s taxes and could mean that money either hasn’t been paid on these values or will have to be returned if found acceptable.
The Ritz-Carlton got a 20-year tax abatement and a $7.9 million grant from Cleveland in the late 1980s.
Tower City – Sam Miller and the Ratner family – made out almost as well as Dick Jacobs in the 1980s.
Tower City received a number of UDAGs (Urban Development Action Grants) from Mayor George Voinovich and Council President George Forbes. UDAGs went to cities with severe urban problems but the federal money, filtered through the city, went primarily to downtown interests.
Easy come, easy go was the George and George policy. After all it was only government money. (Voinovich, of course, is the great fiscal conservative. I never noticed it when it came to wealth interests.)
Here’s how helpful the pair of Georges were to Forest City Enterprises’ interests:
- Tower City got a $10-million retail UDAG.
- $2.7 million and $2.04 million grants for other portions of Tower City.
- $7.9 million for the Ritz.
- $9.2 million for the Tower City/Old Post Office building.
- In addition, the owners got a $9.2 million UDAG for the Halle Building on Euclid Avenue.
Typically these grants were given zero interest rates. Many lasted for 20 years with not a dollar of interest or principal payable until the end of the period. Those paid back to the city early were repaid at a reduced amount.
Easy payments, as the ads say. But in these cases the pitch was very valid. Mayor Voinovich was very generous.
How good is life in Cleveland when your name is Sam or Al Ratner? As good as it gets apparently. Miller and the Ratners are very big political donors. A dollar given usually means millions in return in my experience.
Watch who gets their dough and you’ll know who’s friendly at any level of government.
As they can say, Cleveland been very good to us.
That never stopped the Forest City gang for asking for more.
We can expect a likely avalanche of tax reduction filings next year, starting in January, as complaints will be received by the Board of Revision asking for reductions, even if the properties have already been reduced by the Auditor’s office.
This tax situation is especially vital to the Cleveland School System. It gets 55.13 percent of property tax collections on city property. So it will be hurt most.
The rest goes as follows: Cuyahoga County, 21.24 percent; City of Cleveland, 15.68 percent; and Cleveland libraries, 7.96 percent. (This may not add to 100 because of rounding off of figures.)
Whenever there is abatement or a tax reduction the above levels of government lose revenue. Cleveland faces severe fiscal problems in the near future as the revenues decline.
We will get to more requests by downtown property owners for decreases in property valuation.
Property Value Reductions to Slam Cleveland, Schools
Posted by Roldo Bartimole in Economic Development on September 2, 2009
September 2, 2009… A filing by the Ritz-Carlton Hotel Partnership/Tower City Avenue LLC – i. e., Sam and the boys, have asked for a value reduction on parcel number 101-23-101F. It is ever so with the Tower City bunch. Reduce my taxes, please!
The filing asks a reduction of $105,736 in the value of the property to be taxed. They say the value of the Ritz should be lower than what the County has set it.
The request is justified for the following reason, according to the filing: “Recent sale(s) or comparable properties. Physical, economic, functional depreciation or obsolescence. Economic valuation based on gross or net income.”
According to an official of the Board of Revision, which takes such complaints, the part of the form that must be filled out, wasn’t done. The four selections remain blank.
I wonder if guests know that the Ritz-Carlton says it’s not as good as it is supposed to be.
The requested tax relief comes even though the Ritz has enjoyed 100 percent tax abatement in the recent past.
It is hard to expect, as I said in a previous posting, the Ratners and Sam Miller not to seek property tax relief, or evasion of a type. It’s in their financial DNA to not want to pay taxes, in my experience.
I reported recently that they asked for a $17 reduction of a property. Hardly seems worth it, right? But with such developers it’s the principle of it, I guess. They shouldn’t be paying property taxes at all is the way they must figure it. Let somebody else do it.
I did ask the Board of Revision for other tax reduction requests in the 101 portion of downtown Cleveland.
The Tower City boys had the most. The other reductions they sought include $425,288 for parcel 101-23-100C; $253,420 for parcel 101-23-100A; and 191,821 for parcel 101-23-085E. As I have said before the Tower City properties have many parcel numbers because there are a number of levels to the buildings there.
The total reductions come close to $1 million for these Tower City properties. Expect plenty more in number and value next year as the latest valuations are contested.
Because of this year’s reassessments next year many property owners downtown will be seeking reductions because of economic reasons, i.e., the economic downturn.
What this will mean for Cuyahoga County and especially Cleveland since downtown properties are all in Cleveland we know – a dismal economic outlook.
Here again is a reason why tax abatements hurt so much.
Buildings such as the Ritz-Carlton, the Marriott, Key Center and other downtown properties have been paying no taxes for much of the last two decades. Not that there’s a money crunch (and even before) the city will be suffering from the lack of revenue.
As these abated properties finally come back onto the tax rolls, what happens? The owners seek substantial reductions in the value of their properties. Some have sought reductions even when under abatement, foreseeing the desire to lower their taxes when back on the rolls.
Instead of an uptick in tax revenue, Clevelanders and Mayor Frank Jackson, the likely re-elected mayor, will really have a problem in the next few years. Cleveland schools, which get some 55 percent of the property tax revenue, will be hit even harder.
As a community we face a coming disaster with the loss of property tax revenue.
Here any cries of the danger from the Plain Dealer or Brent Larkin, who is worried about who is going to be the one County official that the Establishment can control come County reform. He’s even picking the one for the job. (I thought he was going to leave the editorializing to Betsy Sullivan, his replacement. He said he was but I guess he was not telling the whole truth. Then I should have known.)
Add to that, of course, is the tax exempted stadiums and arena and the likely new Medical Mart – tax to never pay any property taxes.
We can thank George Voinovich – who always gets credited for fiscal responsibility – George Forbes – who never has been credited with fiscal responsibility – for this situation, exacerbated by Mayor White and Commissioner Tim Hagan.
But these are the guys we choose. Time to be wiser citizens.
We do need, however, good information. Wonder whose responsibility that might be?