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Ed Morrison · Roldo’s questions on the med mart
February 7th, 2009
Roldo raises important questions on Cleveland’s ability to compete for medical conventions.
Is Cleveland Ready for the Medical Mart Business?
Good questions…
Before wasting 3+ years trying to figure out where to locate a medical mart, perhaps the Greater Cleveland Partnership do the research on whether to build one in the first place.
After all the public money spent so far — well over $250,000 — we have no hard research on whether a medical mart (whatever that means) has a market in Cleveland. No one has answered the questions Crain’s Jay Miller raised over a year ago.
This episode in Cleveland history has all the markings of a classic case study in public policy blunders for Harvard’s Kennedy School of Government.
Part of the case study will be an examination of the role that the Plain Dealer has played in promoting the Tower City site. In another post Roldo asks a good question:
Why is it that the newspaper cannot inspire a real public debate about the necessity of spending $1 billion dollars for this project?
Medical Mart Marketing in the Pee Dee
Last 5 posts by Ed Morrison
- Signing off - February 3rd, 2012
- "The current global development model is unsustainable" - February 1st, 2012
- Market opportunities for developing Chicago's green economy - January 29th, 2012
- Plain Dealer flubs its explanation for firing Tony Grossi - January 27th, 2012
- Linking and leveraging university assets to strengthen regional economies - January 27th, 2012
February 7th, 2009 at 10:00 pm
Ed, I also raised the question about the same time in the pages of the Free Times. I suggested that it might be worth exploring how medical equipment and supplies are actually purchased, and if it made sense to think that a bunch of doctors at a conference will spend their seminar-free hours shopping for that stuff, or whether they’re free to play golf since the practices and/or hospitals probably have people whose job it is to do this. I looked at the list of medical conventions posted by the Convention and Visitors Bureau to hype the number of medical conventions that could potentially be lured here, and found that once you factored out location-tied conventions the main factor in site selection seemed to be nice weather. In addition, at the time this project was first being promoted as an unstudied panacea back in 2007, there was an article in the Chicago Tribune talking about the recent expansion at McCormick Place (Chicago’s immense convention center) plus its decline in convention business, revealing that the center had tasked a staffer specifically to go after – medical conventions.
None of this, along with the Birmnigham failure that Jay Miller talks about in that article, seemed to have been explored (at least not publically) by the powers pushing the project. — including the Plain Dealer. I personally raised questions that would have been appropriately raised by the better resourced daily paper — if it had not been acting as a promotional vehicle for the project.
But then, you can get back to the fact that they haven’t even explored the real need for or likely economic benefits/non-benefits of the convention center itself. They’ve started with the given that it is needed, and tailored coverage to prove the point, dredging up whatever convention booking flaks they can find to preach about the inadequacy of our current convention space. Of course, convention bookers want an array of gorgeous facilities to choose from — all of which they can get for free or get paid to use because space is so overbuilt. They don’t have Cleveland’s interests at heart, but their own — something the PD doesn’t point out. Perhaps we need to go back to square one and ask why we are even talking about building this, and have an honest, open discussion about the costs and benefits, and whether the convention business exists, or will ever exist again, to justify spending our limited resources in this particular way, as well as the potential costs of subsidizing the building basically forever.
So much has NOT been examined about this project that to accept it as a done deal is insulting to the people of this county.
February 8th, 2009 at 8:52 am
I’ve said it before, and I’ll say it again: it completely eludes me how anyone can fail to realize that if you want to be a major American city, you need a competitive convention center, just like you need a good airport or major league sports franchises. It’s an essential part of civic infrastructure, without which you destine yourself to minor league status. Why is that hard to understand, people?
Now, that doesn’t mean it answers the question of where or how to build it, at what cost or size, with or without the medical mart portion. Those are important topics to flesh out. But we need to get it done somehow.
February 8th, 2009 at 9:11 am
anastasia:
In a couple of paragraphs, you’ve begun to probe the ugly underbelly of this deal.
There is no market study to support this project. No one is carefully examined how sophisticated medical equipment is purchased. Indeed, manufacturers of these products have strong incentives not to participate in a medical mart.
They have invested heavily in their own sophisticated marketing infrastructure. This infrastructure carefully guides potential purchasers through a carefully choreographed, complex purchase decision.
A medical mart provides a more open, less controllable sales environment. I can easily see why medical equipment manufacturers would not be willing to share the identity of their potential customers or put sensitive competitive information at risk in a more open environment.
Second, as you note, medical conventions are a prime target for a number of cities. The convention market is mature and heavily overbuilt.
Building a convention center will generate operating losses, but no one involved in this project has projected the extent of these losses. The idea that a developer from Chicago will accept a deal that exposes their company to these losses is fanciful. In sum, county taxpayers will be on the hook with operating deficits.
Yet, no one has had the common sense to project these deficits. The County, in a remarkable abdication of responsibility, has handed a the taxpayer’s wallet to a developer without seeing a plan.
Third, you have pointed to the disturbing role that the Plain Dealer has played in this project. Under dismal leadership of Machaskee, Clifton, and Larkin, the newspaper has a long history of being both a toady to the Greater Cleveland Partnership and a public relations department for Forrest City.
With a change in management, the newspaper may be attempting to recover, but the damage is already been done, however.
We all remember how the Plain Dealer published for a time a Forest City blog. And recall the PD’s editorial support for the outrageously deceptive “Learn and Earn” casino proposal — an initiative that the editors of every other major Ohio newspaper rejected (the Dayton Daily News in a fit of candor called it “a crock”).
With the exception of Steve Litt’s excellent commentaries, the behavior of the paper toward this deal has been a remarkable surrender of journalistic ethics and responsibility.
I put this all in a broader context over on New Geography here and here.
We’re beginning to write the case study of Cleveland’s incompetent leadership.
February 8th, 2009 at 9:21 am
John, I think a lot of the so-called naysayers wouldn’t be arguing that point if we didn’t have ample evidence that the political structure is thoroughly corrupt. Maybe Cleveland needs a convention center in the abstract. But we don’t need a convention center if Tim Hagan and Jimmy Dimora (as well as any of a couple score of other political figures) are anywhere near it.
We just don’t trust them. They have shown again and again that they’re in office to siphon money for themselves and their friends.
In this milieu, a new convention center would be just another form of Corruption Tax. And that is why all the opposition.
Reminders: Gateway, Gateway parking garages, Rock Hall (98% public funding, zero public ownership), Bond Accountability Commission, Browns Stadium (cost forever unknown), Waterfront Line, and anything involving the county contracting process. That’s the short list.
If you want to be a major American city, you have to start with reasonably competent and ethical elected officals. I don’t see how anyone can trust our political leaders with… um, anything of consequence.
That’s why I reject any talk of size and location and details. There is no good way to “get it done” when you know the game is rigged.
February 8th, 2009 at 9:28 am
Also, John, totally echoing what Anastasia said. It is relevant (for example) that the Plain Dealer has been a blatant cheerleader for this project–what kind of watchdog do you think they’ll be when it gets underway?
It’s highly relevant that the “Positively Cleveland” crowd used completely made-up statistics to justify their projection of fifty medical conventions her year. It means that when this thing is evaluated in progress, you won’t get accurate information, and problems won’t be solved until far too late. They’re spinmeisters, not analysts. Have you noticed they stay away from BFD now that they’ve been called on it?
Bottom line, John, this convention center and medical mart deal are already mired in corruption and they haven’t even been started yet. What on earth makes you think it’s gonna get any cleaner? What mekes you think the media and civic institutions are gonna get any more ethical and realistic?
February 8th, 2009 at 9:33 am
John:
I have no objection to convention centers per se. World-class cities do need places for people to meet. What’s disturbing in the case of Cleveland is the absolute lack of process to make this large investment decision.
Because we have no process, we have no agreed upon a foundation of fact. Instead, we have turned the civic process over to private real estate developers, a major mistake. The Cleveland Planning Commission and the erstwhile Convention Facilities Authority have been completely cut out of the process.
As we face the severest recession of our lifetimes, it makes sense to ask, “What’s the rush?” Instead, it’s a good time to step back and see if we can design facilities that accomplish multiple purposes: a public meeting facility on the Mall that completes the Burnham plan, and a facility focused on medical meetings and education that ties together the two campuses of the Cleveland clinic and University hospitals.
I am under no illusions that this will actually happen: the current cadre of Cleveland leaders have proven incompetent when it comes to designing a civic process to handle complex projects. No one involved in this process is likely to admit that really do not know what they are doing.
February 8th, 2009 at 10:47 am
We have a convention center; we have an IX center, which the city just extended its operation to 2039; we have a Wolstein center; the Cleveland Clinic has its new Intercontinental hotel with 35,000 square feet conference center, 8,800 square feet grand ballroom, 500 seat ampitheater; and there are numerous other venues for meetings in and around town.Make use of what we have.
We don’t need and shouldn’t be putting the County into debt for a new convention center. A convention center that will operate in the red, a convention center that will require subsidized parking and a subsidized hotel.
Use and fix up what we have and realize we are not, John, a major American city any longer and we cannot afford to try to act as one. We are subsidizing too many institutions and private businesses. It has to be reigned in.
Finally, anything we do should be regionalize in cost. Cleveland and Cuyahoga County taxpayers should stop subsidizing people who have moved farther and farther away and use the facilities – and we all know what they are – that they don’t pay to enjoy.
February 8th, 2009 at 11:56 am
The PD’s Jim Nichols recently wrote an article that posed many questions about the convention center/med mart. Included in the response to one of his questions is a fact that I didn’t know. Because of the way the deal with MMPI is structured, the county must issue taxable bonds rather than tax-free bonds to pay for the convention center.
It seems very likely to me that taxable bonds will have to pay significantly higher interest rates than tax-free bonds would. Consequently, there would appear to be two additional questions that should be of general concern:
1) What is the difference in interest costs to taxpayers resulting from the issuance of taxable rather than tax-free bonds? (I’m guessing the difference is substantial.)
2) What benefit(s) do taxpayers receive in exchange for those higher costs?
February 8th, 2009 at 12:50 pm
Roldo, we’re still major in the sense that we remain among the 20 largest metro areas in the country. That’s the geographic area that really counts in America today, not just the city proper, and it’s also the region on which the center would draw and depend on for support. I agree that an even larger geography than Cuyahoga County will benefit from this, and should thus somehow contribute. But that’s what that regionalization process is about, better tying the 21-county area together.
As for the IX Center, it barely counts because it’s way distant from the downtown area and all the attractions and amenities people come to a major meeting/convention for. Because of its location, it can only be of interest to the far smaller number of meeting designed for people to fly in and fly out that day.
As for the existing convention center, every expert in that industry (and most people who have ever attended an event there) will readily tell you the current facilty is so far below par with the rest of the country that it’s just plain embarrassing. It was built for the needs of the 1920s, and part of it was then retrofitted for the needs of the 1960s. That means it’s now at least a half century out of date. Time moves on, and so much this region if it wants to have a real economy.
I’m on record as sharing everyone’s (in this string and elsewhere) concerns about the bizarre and broken process by which this site selection and the rest of the project has proceeded. I was also completely against the idea of pushing this county tax through without putting it up for vote (a decision for which Dimora and Hagan should have been recalled from office and run out of town, in my opinion) I don’t trust any of these sharpies and bandits (including Fred Nance) to do right by the public, either. That’s why the public must demand that its elected officials and their designees open the process and that its media keep the disinfectant of sunlight fixed squarely on the process to ensure that happens. We don’t have the luxury of simply throwing up our hands and saying, it’s all corrupt, so let’s not do anything. That’s hardly an answer that works or makes sense on any level. We have to have infrastruture that works and that’s at least close to the current state of the art in their respective niches. If we can’t trust our public officials to fix the potholes, then we have to get new public officials, not cars that can withstand a million chuckholes.
February 8th, 2009 at 2:05 pm
That’s where we differ, John. It’s not a luxury. It’s survival. First things first: a robust law enforcement attack on public corruption. Everybody knows this town is crooked. They don’t even bother to hide it. Do you think that’s good for business?
February 8th, 2009 at 3:37 pm
There’s corruption everywhere. Only Clevelanders who don’t know much about other places or have never lived anywhere else think it’s somehow uniquely corrupt here. It’s simply a matter of degrees.
February 8th, 2009 at 4:12 pm
“Quantity has a quality all its own,” John. I wonder if Ed can point out a city with a less coherent process than Cleveland’s in developing big-ticket downtown projects. I’d seriously like to know. And see what their results were.
As for the diss, I’ll let that go. Why so prickly?
February 8th, 2009 at 4:44 pm
Sorry, Mark. I didn’t mean to diss you. It’s just that I think we all tend to get too caught up in thinking everything that happens in our own town or region is unique, and most of the time it’s not. This came up during the Blago case in Illinois, with much of the media thinking that Chicago or Illinois is somehow the center of corruption in the U.S. Wherever there’s a mix of money, political power and influence and business decisions tied to politics (in other words, everywhere) there will be corruption.
February 8th, 2009 at 11:41 pm
An old Cleveland ward-heeler once told me, “If you do a good job, you deserve a little commission.” The political process is rife with opportunities for corruption; the skillful use of patronage has made cities work since there have been cities. It’s ineffectual corruption that’s forever unpopular…when you try to buy politicians and they don’t stay bought. That may be the scenario we face today.
All the issues raised in this string are legit, and all are fair game for an actual civic dialogue. The thing is, to those within The Matrix of corporate/institutional/political leadership in Northeast Ohio, the data doesn’t matter. The issues don’t matter. What matters is the power to do what they want to do. No mater what the sales pitch is, even economic development is secondary to Having The Power.
I recall one of the past convention center campaigns…not this one, not the one before, but the one before that. The Campbell Administration dithered on a convention center referendum because private polls showed the electorate was opposed to the issue by a margin of something like 7 to 1.
At the same time, Haywood Sanders was telling anybody who’d listen that convention centers were net revenue losers for most communities not in the Sun Belt, and had plenty of case studies of his own to support the thesis.
At the time, the GCP has one simple rejoinder to all that: I believe the exact quote was, “We reject that data.” Soon the ballot issue was abandoned, and soon after the General Assembly passed a law enabling county commissioners to raise sales taxes up to 1/4 of a percent without a popular vote.
It’s possible to make a case that Northeast Ohio needs a convention center, even if it’d a money loser, as a civic investment. And citizens everywhere might disagree regarding the value of Progressive Field, The Q, and Browns Stadium to the local economy and quality of life.
What ought to be clear is that the local citizenry has lost confidence in area leadership, both in the public and private sectors. That skepticism has a strong basis in experience over the past 20 years.
But the guys (overwhelmingly male, overwhelmingly white) with the power don’t care. They don’t need to. Because they have the power. They’ve subverted the democratic process and shown utter contempt for the taxpayer, because they know better how to spend your money than you do. They’re pissing on your head and telling you it’s raining, but they don’t care if you believe it or not.
Forgive the momentary outburst of populism, but maybe we should all stop trying to figure out how all of this makes any sense. It doesn’t. It doesn’t have to. Because,to recall Ayn Rand and Atlas Shrugged, the looters have the power and you don’t.
February 9th, 2009 at 9:19 am
John:
Wonderful commentary. You have aptly described the ugly underbelly of Cleveland’s current business and political leadership. Beyond the pure entertainment, these people do not deliver much useful to anyone but themselves.
February 9th, 2009 at 9:27 am
Hate to argue with you John but google top American cities (http://www.infoplease.com/ipa/A0922422.html) as of 2005 and you won’t find Cleveland among the top 20.
Happened to have coffee last night with Norm Krumholz and just to clear my thoughts, I asked him without any content if he thought Cleveland was still a major American city. His answer was, “No.” I got the same brief answer from one of his former city planners who happened to be there.
Cleveland can no longer play the game of being a major city. It’s attempt to remain a Major League city has cost it dearly. We will have paid well over $1 billion on stadia and arena by the time they are paid off, to say nothing of upkeep.
Now, we want to spend more than $1 billion on a medical mart no one can prove we need, along with a convention center to keep up with the Jones.
It won’t work and the rest of the community keeps falling farther behind. Certainly, Cleveland will be a city of less than 400,000 as a result of the 2010 Census. I wouldn’t doubt 350,000 if that. I hear that the stats that are being contemplated on the council redistricting are being shaped to keep more council members than the 25,000 a district but in reality are lower. The city is clearing out, as it has been since I came in 1965 with a population said to be 750,000 then.
Why can’t we be a middle city that takes care of the people who live here? What’s the shame in that?
February 9th, 2009 at 9:46 am
Roldo, I welcome your arguments, since they’re always grounded in facts and knowledge. And sorry, I meant to say top 25, not top 20. I was referring to the Standard Metropolitan Area, which used to be called SMSA, a formal designation drawn from Census data and compiled by the OMB. According to the latest rankings available (2007), the Cleveland area is the 25th largest metro area in the U.S. It’s slipped a bit in recent years, but 25th largest in the country is still nothing to sneeze at. It’s still larger than such growing areas as Columbus, Las Vegas. I emphasize again that the population of Cleveland proper just isn’t that important in the grand scheme of things, not nearly as important as the population of the larger region. Columbus has long since passed it in population, but as a region, it still lags by 300,000 people. Some of that simply has to do with that area’s foresight in incorporating a larger area many years ago, which is more an historical accident than a meaningful concept in today’s economy. It’s the surrounding region that counts.
http://en.wikipedia.org/wiki/Table_of_United_States_Metropolitan_Statistical_Areas
February 9th, 2009 at 10:22 am
By the way, I meant to mention two other points. I’ve heard very persuasive arguments that the metro rankings that really count in America these days are not based strictly on population but rather on the size of the various local TV markets. And this is where we still rank in the top 20, at #17 (see link below). These are the rankings I had in mind (though couldn’t find until now) when I mentioned our top-20 status. So rather than get into an epistemological debate on that, we can say the Cleveland metro area ranks no lower than 25th in the U.S. (or maybe we can pick a number halfway between 17th and 25th).
But the other point that I think bears consideration is that since we lack some of the inherent advantages of other comparable mid-sized markets (weather in the case of dozens of places in the Sun Belt, casinos in Las Vegas, Disney in Orlando, state capitals in Austin and Sacramento) we have to go the extra mile in other ways to remain competitive. To me, that includes such things as retaining our major league sports franchises and investing in a national-class convention center.
http://www.tvb.org/rcentral/markettrack/us_hh_by_dma.asp
February 9th, 2009 at 12:26 pm
Cleveland’s peak as a convention and visitor destination was from the 1930’s through the 1950’s, when Cleveland was the largest city on the rail lines between New York and Chicago…and before Las Vegas and Orlando even existed. Clearly a few things have changed since then.
February 9th, 2009 at 1:17 pm
Sure, so we have to downsize our infrastructure accordingly. Not eradicate it. And we’re not really competing with either Las Vegas or Orlando. I included those examples only because they have obvious built-in advantages. Our real competition is with cities like Indy, Pittsburgh, Cincy, Columbus and a few others. We can’t unilaterally disarm just because the convention center industry is overbuilt, any more than we can avoid having a first-class airport simply because the airlines already have enough other places to build hubs and connections. We have to go after our fair share of all of that, or risk accelerating the region’s decline. And taking care of the needs of only current residents is one of the best recipes I can think of for assuring regional decline.
February 9th, 2009 at 2:34 pm
I’m not opposed to either the convention center or the medical mart idea, and as I said before, even a money-losing convention center can be an important civic asset. Many, many years ago, I worked at the hotel right next door to the convention center, and things got very busy during the Great Lakes Expo and The Iron And Steel Show…and a bunch of others that don’t come to town any more, if they’re even around at all.
But it IS a matter of transparency…and probably a matter of taxation-without-representation democracy. As I tell my kids, in the absence of communication, people are free to believe (or not believe) anything they want.
I think the masterminds know about the numbers, and they’re not good. I know a number of these guys personally pretty well, and they’
re smart guys. But the numbers don’t matter very much to them, either. Remaining employed in very nice jobs means finding a way to do what their bosses want.
And I think that MMPI, which is in the expositions business, has been sobered up by “The Cleveland Way;” at least THEY seem to want a little more market info to see if this deal can possibly be a win for them.
But once again, the numbers don’t matter. This is only coincidentally about economic development, or even conventions. It’s about power.
February 9th, 2009 at 2:55 pm
We pretty much agree then, JP. And the Cleveland way made me laugh. It’s a little reminiscent of the famous scene from the movie The Untouchables, when Sean Connery explains “the Chicago way”: “They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue. That’s the Chicago way!”
February 9th, 2009 at 3:43 pm
A guy told me a good Chicago story which is ironically appropriate. He’d opened a business in the City, and within the first week he was visited by his alderman, who asked him if he needed anything.
There were no parking lots in the vicinity, and he needed parking space for a couple of cars. The alderman told him it’d take $2000 a half, but he could take care of it. He agreed.
The next Monday a Streets Dept. truck pulls up and paints the curb in front of the store yellow. Then the cops would tow anybody who parked there except the business owner.
That’s The Chicago Way.
In Cleveland, you pay the money, and not only do you not get what you asked for, you get indicted, cuz your councilman flipped on you in exchange for 15 months in a minimum-security facility.
February 9th, 2009 at 3:54 pm
Yes, Cleveland is an odd variation on several classic corruption themes. It keeps things interesting, that’s for sure. When it comes to parking downtown, you’d have to include a Cleveland codicil: half the spaces in the overpriced muny lots are controlled by former councilpeople or their business partners, and the metered spaces are mostly limited to a single hour, thus encouraging you to park in the other places. If you don’t, and you’re 90 seconds late with the meter, the otherwise inefficient city government will have surely had a meter maid or male equivalent delivering a ticket to your windshield already.
February 10th, 2009 at 3:32 pm
Congrats! Cleveland was 4th on Forbes Most Miserable Cities list.
I bet the device manufacturers will be looking to showcase a MRI machine here real soon.
On the other hand, this gives the local economic development groups more ammo to ask for grant support.
And that means more jobs (for them)!
February 10th, 2009 at 8:08 pm
I wouldn’t put much stock in anything Forbes magazine has to say. It’s owned by a right-wing family, and tends to publish second-rate stuff at best. It sometimes benefits from being confused with Fortune magazine, which it can’t begin to hold a candle to.
February 11th, 2009 at 10:21 am
Can someone clarify the financing for the Med Mart?
So, the commissioners utilized a law that allows them to raise taxes for the Med Mart. This cannot be the only public expenditure. Won’t the eventual bond financing come up for a public vote?
My point is, despite all the backroom dealings and end arounds, this project will have to face the public at some point. (I hope.)
February 11th, 2009 at 2:28 pm
I’m still curious as to why ANY public funds are being used for a medical mart when part of the deal, we were told, was the if we paid for a convention center, the medical mart would come from private sources. That was given as the REASON for building the convention center: in order to attract the private money that would build the medical mart. I’m not getting exactly how this switcheroo happened.
February 11th, 2009 at 3:07 pm
I’m afraid trying to keep track of all the switcheroo arguments on behalf of this deal is only going to give you permanent migraines, Anastasia. It’s going to be just like the absurd parade of lies, half-truths and laughable crap that got spewed into the atmosphere during the selling of Gateway. At least with that one, the public first had to be propagandized into passing a tax on themselves.
February 11th, 2009 at 4:17 pm
I think this has much more in common with the Cleveland Browns Stadium project…right down to many of the same public-and private-sector names and the same air of bogus urgency. And in terms of public accountability for private funds used for private development, look how great THAT turned out…
February 11th, 2009 at 4:21 pm
I think this has much more in common with the Cleveland Browns Stadium project…right down to many of the same public-and private-sector names and the same air of bogus urgency. And in terms of public accountability for public funds used to build a privately-managed facility for the benefit of private individuals, look how great THAT turned out…At least the Cavs and the Tribe have been entertaining…
February 11th, 2009 at 4:35 pm
Good point. I had almost forgotten about the Browns Stadium deal. Or perhaps it mostly merged in my mind into the similarly opaque dealings around Gateway.
February 11th, 2009 at 9:42 pm
This is why I read BFD. Thank you to Roldo, Ed Morrison, John Ettorre, John Polk and, in fact, EVERYONE who has commented for such a thoughtful and cogent discussion of the proposed Med-Mart, Convention Center and related issues.