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13 Responses to “Q’s – MedMart/ConFac – Public Hearing & Meeting”

1. anastasia Says:
   February 11th, 2009 at 2:25 pm

   At the initial public hearings in July, 2007 and in all public statements promoting the project at that time, we were advised of the urgency of building a convention center that would “attract” or “draw” a medical mart that would be built entirely with private money. We were promised repeatedly (I’m pretty sure both Dimora and Hagan said this; I would have to look at my notes) that NO public money would be spent on the medical mart. Somewhere along the line this morphed into how MUCh private money would be put into the medical mart and how much it would cost the taxpayers. When, why and how did this change, and why was the change not clearly stated to a public which had been told that it would get a free medical mart in return for committing to the loss-leader convention center?

2. Ed Morrison Says:
   February 11th, 2009 at 3:00 pm

   Brian:

   Can we get a detailed market analysis for both the convention center and medical mart and financial projections, along with key assumptions?

   These should be matters of public record.

3. John Ettorre Says:
   February 11th, 2009 at 3:09 pm

   I’m guessing that what Ed is politely suggesting here is that no such document(s) actually exist.

4. Ed Morrison Says:
   February 11th, 2009 at 4:13 pm

   John:

   That’s my sense. If we follow the line of argument that John Polk puts forth, the GCP does not have an analysis, and they don’t care.

   But it’s important to ask the questions in order to estimate the operating deficits that this project will generate.

5. Medical Mart/Convention Center Meeting Tomorrow at City Hall Says:
   February 11th, 2009 at 6:02 pm

   [...] than reinvent the wheel, go to this post on Brewed Fresh Daily to get the details. Peace Out – 3C Segnala [...]

6. VincentPerricelli Says:
   February 11th, 2009 at 7:55 pm

   Here are two questions. According to Fred Nance, as reported in a Plain Dealer article, bonds for the convention center will be taxable rather than being tax-free. Taxable bonds generally carry a higher interest rate than comparable tax-free bonds. How much more interest will taxpayers pay because the bonds are taxable and not tax-free? What do the taxpayers got in return for the higher interest payments?

   For what they’re worth, here are some back-of-the-envelope calculations of the extra interest cost. Simplifying assumptions are: 1) the principal amount is $400 million; 2) bonds have a maturity of twenty years; 3) taxable bonds pay an interest rate that’s 1% higher than tax-free bonds; 4) there is no compounding of interest. On this basis, taxable bonds imply a higher interest cost to taxpayers of $400,000,000 x 20 x 0.01 = $80,000,000 (i.e., $80 million). If one changes the assumptions the amount of higher costs will change, but that amount will almost certainly be substantial.

7. VincentPerricelli Says:
   February 11th, 2009 at 7:58 pm

   For some reason the link to the PD article in my last post seems to be missing. The link is: http://blog.cleveland.com/metro/2009/02/cuyahoga_county_commissioners_3.htm

   Look under the question: “Why does MMPI get to own taxpayer-financed facilities?”

8. Susan Miller Says:
   February 11th, 2009 at 10:44 pm

   The question I asked several times – Where is the cost benefit analysis – what’s the ROI for county taxpayers? Each time I got the “bellhop’s will make and spend money” answer.
   Vincent, good point. From the tax free vs taxable bond issue – “no one has clearly explained why the ownership structure benefits the people paying for it — those who pay sales taxes in Cuyahoga County.”
   And didn’t we hear that the interest earned on the money collected so far is not going to the project? Where is it going? The slush fund? Er, I mean the “general” fund?
   Who designed it? Who will build it? What about performance and payment bonds? Excuse me if I am dumb here. But what if we’re mid-medmart construction and the whole thing goes south? Then what?

9. Brian Cummins Says:
   February 12th, 2009 at 6:44 am

   Why wouldn’t taxpayers own the Medical Mart?
   Posted by Jim Nichols February 11, 2009 22:30PM

   http://blog.cleveland.com/metro/2009/02/_the_publicprivate_partnership.html

   Excerpt:

   The public-private partnership for the convention center and medical mart proposed for downtown Cleveland is structured like this: the public sector would pay for it, and the private sector would own and operate it, with little public oversight.

   Ducate, the president of the pro-industry Center for Exhibition Industry Research in Dallas…

   “It’s kind of a puzzling thing,” Ducate said Wednesday. “There certainly are convention centers that are publicly financed and owned and are privately managed. But I’m not aware of any publicly financed centers that have been transferred from public ownership to private ownership and operations.”

10. John Ettorre Says:
    February 12th, 2009 at 8:43 am

    Brian, you’re focusing on the right issue. You should be saluted for doing so as a public official. And this too is a curious Cleveland way: using public resources for projects that then fall outside the scope of the public’s control and wholly benefit private parties.

    Here’s a refresher course on how this worked for the Rock Hall. Eleven years ago, I wrote about an epic battle between the Rock Hall and a young Cleveland photographer, Chuck Gentile, who took a great photo of the building and was trying to sell it, until the Rock Hall tried to stop him on the curious grounds that it controlled all the rights to any images taken of its building, even though it had been built with considerable public resources. Here’s the key portion of that article:

    “Thus, the entire downtown establishment and its political support group rallied around the cause. Jones Day agreed to provide $2 million of pro bono legal services, lending the expertise of its attorneys in corporate, real estate, intellectual property and bond work. The state of Ohio and its governor, the former mayor of Cleveland, stepped in with $9 million in loan guarantees. And Cleveland-based McDonald & Co. chipped in by selling more than $50 million in tax-exempt revenue bonds, guaranteed by state and county governments. And when the funding still came up short, Mayor Michael White and Cuyahoga County Commissioner Tim Hagan paved the way for the County Port Authority, the only public bonding authority that hadn’t exhausted its funding cap, to help.

    And yet, eager to dispel the general notion that such funding means it is a public building-and thus available to be photographed by whomever wishes to-the Rock Hall’s defenders have engaged in some legal hair-splitting that would do Bill Clinton proud.

    By this reasoning, the Rock Hall isn’t a public building because the fi-nancial assistance was derived not from general tax revenues but rather through private investment secured through publicly issued bonds. Regan Fay concedes that this has been a difficult distinction to sell.

    “That’s something we’ve been able to educate the judges on, but not the public,” he says with an air of resignation.

    The entire article can be found here:

    http://www.sbnonline.com/Local/Article/4023/82/0/Poster_boy_for_the_revolution.aspx

11. John Ettorre Says:
    February 12th, 2009 at 8:57 am

    I meant to add that in the case of the convention center, there can be no similar hair-splitting, because the financing doesn’t involve public loan guarantees, but tax money (levied without benefit of first securing a vote by the public, remember).

12. Mark W. "Some Guy on Bridge" Schumann Says:
    February 13th, 2009 at 10:20 am

    Regular BFD readers are aware that I rarely send fan mail to public officials, but this work by Brian Cummins makes me sad about not living in Ward 15 anymore.

    Tragically, all it takes to rise above the baseline here is to ask basic, obvious, common-sense questions… and to refuse to accept nonsense for answers.

    My further questions: Which county officials are under criminal investigation for their part in the MMPI deal? If none, why? In particular, is it not illegal for Hagan to steer hundreds of millions of dollars to his close personal friend Chris Kennedy? If not, why not?

13. lmcshane Says:
    February 13th, 2009 at 9:44 pm

    Mark…don’t rush to BC’s defense. He still has some explaining to do regarding the NRP crap. Meanwhile, I saw lights on in Wirth House last night. Yes, that is a good thing, but BC didn’t open his mouth at the Medical Mart feel good event, so BC still has to prove himself to the residents in Ward 15.