Brian Cummins · Cleveland City Council passes LED ordinance

August 19th, 2010

The ordinance passes 12 votes to 7 — see Plain Dealer article:

Cleveland City Council finally passes legislation to seek bids for purchase of LED lights
By Mark Gillispie, The Plain Dealer, August 18, 2010.

It was the Jackson administration’s second try at convincing council to give one company the exclusive right to sell the city LED lighting for 10 years in exchange for building a manufacturing facility here and creating 350 jobs. See full article here.

I hope the best for the Administration and our City, but am very disappointed by the lack of due diligence Council placed on reviewing this legislation.  In both rounds of deliberations, the Administration touted their strategies without any third party expertise and Council leadership did little to dig into the matter.

The end result is a very restrictive bid process that limits competition and ignores trying to partner with the largest lighting company in the US, GE as well as the upstart Green Mill Global LLC and their partners from South Korea, Fawoo Tech North America.

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Other comments today that I made at cleveland.com

Although this is complicated and multifaceted it breaksdown to some basic issues:

  1. The ordinance as passed is very similar to the original and primarily seeks to attract a sole-source provider for the City’s LED lighting needs with the promise of 350 jobs within 5 years  (30%, or 105 which will be required to be Clevelanders).
  2. The technology and industry are developing very rapidly and firms are making overstated claims about products that are ultimately not living up to claims when actually tested.
  3. Most if not all other municipalities in the USA are taking an approach of piloting products and building relationships with multiple firms.  Those cities internationally that are doing more procurement from single source companies are doing so with subsidies to those firms by their government, e.g. China.
  4. Cleveland has the USA’s largest lighting company in our region and will not provided equitable terms within the ordinance for that company to be able to fairly compete with what we expect from the RFP.  The ordinance requires a job count and jobs created only in Cleveland.  Those of us who opposed the ordinance were barely given the opportunity to bring third party expertise into the deliberations.  When we did, the suggestions and amendments we had to include a count of payroll generated (as opposed to only a job count), or to include in the economic benefit analysis the jobs and payroll generation of jobs within Cuyahoga County, i.e., GE in East Cleveland, less than two miles from our City, were not given any consideration.

Ultimately the Mayor and his Administrations got what they want with a few important concessions/amendments added.  The Administration was always quick to point out that there are sufficient exit clauses and warranty requirements so we can get out of the deal we eventually broker.  That does not build much trust or faith that this strategy will work, but at this point I hope some good can come from this.

Brian Cummins
Cleveland City Council, Ward 14

Last 5 posts by Brian Cummins

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5 Comments »

5 Responses to “Cleveland City Council passes LED ordinance”

  1. Ed Morrison Says:
    August 20th, 2010 at 5:07 am

    Brian:

    Thanks for your good work on this cockamamy strategy by Jackson. I wonder again “Where is the Greater Cleveland Partnership?”

    If the GCP was doing its job, this Sunopto deal should never have made it past a first hearing. The logic of this deal is laughable.

    Think about it this way. Would you sign a ten year deal with a wireless carrier? Not Verizon or AT&T, but Willy’s WIreless? Would you sign a ten year deal with a satellite TV carrier? Not Dish Network, but Sammy’s Satellites? How about a signing a ten year exclusive deal with a wind power company. Not GE or Vestas (the world’s biggest maker of wind turbines), but with Tommy’s Turbines?

    This goofball deal speaks, in my view, to the incestuous relationship that the GCP has nurtured over the years with the corrupt political leadership in the City and the County. John Polk has written clearly about this relationship and how it has evolved over the years.

    The sad truth is that the corrupt political dynamics in Cleveland and Cuyahoga County have served the narrow real estate interests that dominate the GCP. This corruption would not have festered as long as it has without the tacit support of Cleveland’s business leadership. A similar dynamic operates in Louisiana.

    Cleveland will not progress much without a business community that stands up and says, “Enough”.

    Start with hiring a GCP staff who knows something about economic development strategy. Sadly, the GCP has proven once again its inability to craft a sensible strategy for the city. Look to Oklahoma City or Charleston, SC for models of how a chamber of commerce can play a positive role in a region’s development.

    When the Plain Dealer started exploring the effectiveness of the GCP “strategy” with a series by Becky Gaylord and others in 2006, the GCP made sure to pull the plug on any questions quickly.

    On that, Jimmy Dimora, in his rant against Henry Gomez some weeks ago, got it right. The GCP and the Plain Dealer have worked a clumsy deal in this city for a number of years.



  2. JS Says:
    August 20th, 2010 at 10:12 am

    First off, I haven’t heard thing one about Sunpu Opto. I’m not for or against this — as no one has 1)Shown a product 2)Detailed the company.

    Could be a big company and well known in Asia. Could be a nobody. Could be a shell.

    Of course, actually knowing something about the company and the functioning of its products rains on a lot of parades. Still I find the high level of disinterest in the slimmest scrap of useful information about any detail about this company and its products whilst making any case (pro or con) rather too convenient.

    I want someone associated with the company to make some statement and demonstrate some technology. I want debate to center on this company, and its products. Not the level of LED technology in general.

    Cleveland is the city of a hundred pilot projects and zero roll outs. This may just be another “wind turbine pilot,” with fictional employment inhabiting a fictional site deploying half-baked prototypes that will never see a roll out.

    (And a few hundred real paying, detectable workers massaged, Enron style, into tens of thousands of imputed phantom employment. If you want an untested, unproven technology to stake employment on, look no further than the spreadsheet formula used to make up all those hypothesized support jobs)

    In other words, nothing new to Cleveland.

    To make that case, stop talking about the company and its product in its absence.

  3. Ed Morrison Says:
    August 20th, 2010 at 4:37 pm

    JS:

    Before piping off, you might want to read the many BFD posts on this issue. Brian has done some extensive work on this issue from all angles. I have made a number of posts on how the shaky nature of the company.

    I’ve compiled a partial list for you:

    http://snurl.com/10qoj1
    http://snurl.com/10qojj
    http://bit.ly/cKNdQ7
    http://bit.ly/b8bU2Y
    http://bit.ly/df7CN0
    http://bit.ly/bcsbS9
    http://bit.ly/bGhxwg

  4. Brian Cummins Says:
    August 20th, 2010 at 4:50 pm

    JS – Sunpu’s manufacture representative did provide some product to Cleveland Public Power and they displayed it to Council in the first go-around when the Administration tried to pass a no-bid process ordinance.
    The products they touted are rated by Sunpu as having about half the lumen output of what they would replace.

    I and others did research on Sunpu Opto and they represent probably one of fifty or so such companies in China. The company has no product tested or sold in the USA. And, no presence in the USA as evidence in reviewing several years worth of attendee lists for numerous DOE and other LED industry sponsored conferences and workshops – something any serious manufacturer that would want to operate in the USA would be attending.

    I would agree that other than some video footage of their factory in China, CPP’s display of their product and the appearance of Peter Tein, Sunpu’s manufacture representative at one of our Council meetings there has been no significant information provided by Sunpu – save copies of their Chinese patents that were not even translated.

    The status of the LED lighting industry and technology is completely relevant in this discussion as all experts I’ve spoken with feel that a municipality such as Cleveland would be foolish to enter into such a long-term contract for products and in an industry that is evolving so rapidly.

    The other important factor in this issue is the apparent complete disregard to leverage, retain and grow a relationship with our local and regional based companies that could play a role in providing LED lighting, i.e., GE and Green Mill Global LLC/Fawoo Tech North America. See previous posting regarding these arguments.

  5. JS Says:
    August 21st, 2010 at 12:50 am

    Okay, half the lumens, I’ve already heard that. And this …causes more accidents? …renders the light worthless? …is what kind of problem?

    Once again, zero context. Why do twice, half, one fifth or ten times the lumens matter? What test shows ANY serious problem results from halving the lumens?

    No product tested in the USA. And a test would take, what? A day? Month? Year? Ten years?

    State of the LED lighting industry is, indeed relevant, for all of the first five minutes of discussion. It pretty much renders then entire argument mute if, say, the company has never done any similar installations and can’t or won’t demonstrate a product.

    And the other local and regional players is also relevant. Still, why entertain any discussion when nobody — using any technology known anywhere — can provide an adequate light level?

    Cities like Santa Rosa, CA is eliminating 6,000 of the city’s 15,000 streetlights with an additional 3,000 put on a timer. Does this represent a hazard?

    Or is the amount of light an unknown? We know we have a certain amount with the old technology. And, of course, Clevelanders dislike anything different. At a time when cities are putting out street lights ENTIRELY, you’ll forgive a little skepticism.