PD Can't Tell the Truth on Med Mart Deal

I can’t understand why the Plain Dealer blatantly lies to us about the cost of the medical mart and convention center.

A PD editorial on March 24 says the project “… will be financed by $400 million in public money.” That is incorrect.

The memorandum of understanding between Cuyahoga County Commissioners and the no-bid MMPI (Merchandise Mart Properties Inc.) of Chicago states clearly:

The operator (MMPI) “will lease the Facility to the County under a 20-year lease-purchase agreement obligating the Count to pay annual rent in an amount equal to (a) $40 million during a period commencing with the signing of the lease and ending on Sept. 30, 2027 or on such earlier date as the financing agreements may permit such rent payments to end plus (underling in the document) (b) the supplemental payments (defined below) on a monthly basis during such term.”

Now $40 million times 20 years do not equal $400 million. It equals $800 million. The “plus” supplement mentioned in the lease document says that the County will pay amounts “equal to $6 million in years one through three and $5 million in the remaining years.” And that’s with three percent escalation “if certain financial targets are not met.” So it could be more.

These supplemental payments - $6 million for three years and $5 million for the next 17 years equals $18 million the first three years and $85 million for 17 years without considering inflation. The $18 million plus $85 million tells me County taxpayers will pay an added $103 million minimum.

Add $800 to $103 million, you get $903 million. Add inflation and you can easily see that this BIG MISTAKE will cost at least $1 billion conservatively.

That’s a lot of money. Does MMPI get to build the Medical Mart with that? Does MMPI decide how large a convention center is built? Does it build small and pocket more? Many questions are unanswered.

The deal, of course, also says nothing about what happens to the old convention center and the I-X center, both owned by the city and likely to endure large deficits. Does CSU’s Wolstein Center also face red ink? So add to the public cost some unknown amount. Some unknown large amount.

The Pee Dee – cheerleading followers of every downtown scheme I’ve observed in more than 40 years – distorts the cost purposely. In other words, it lies.

I loved its reasoning in the editorial. The PD, which has had little of anything critical to say of past projects, starts its editorial this way:

“Considering how often Cleveland seems to find itself on the losing end of enterprises that begin with high hopes, like major civic deals or sports seasons, the agreement the Cuyahoga County Commissioners reached with the company that plans to build and run a new convention center and Medical Mart looks promising.”

It doesn’t take much to thrill those people over at 1801 Superior Avenue. However, I wish they would detail those “major civic deals” that we have found ourselves “on the losing end.”

The County, thanks to our genius commissioners – Tim Hagan, Jimmy Dimora and Peter Lawson Jones – won’t be empty handed out of this deal. Oh, no.

The County, folks, will get ALL the income from naming rights. Won’t that be a revenue enhancer? Let’s name it The Timothy Hagan Medical Mart and Convention Center – a Loss not Profit Center for Cuyahoga County. Or, The Tax’n Timmy for short.

I asked the nation’s leading academic critic of convention centers what he thought of the deal.

Professor of Urban Studies in the Department of Political Science at Trinity University in San Antonio Heywood Sanders has been studying convention centers for years. He has concluded that cities have overbuilt convention centers and are competing for customers in a limited, if not shrinking, market. He follows Cleveland infrastructure needs closely.

Of the MMPI deal Sanders says in an e-mail, “As I think about how the project has evolved, from a free standing Med Mart near a convention center to some sort of combined facility run by MMPI, I am struck by the ‘cart and horse’ issue.

“If the County wants a convention center manager capable of attracting some fixed medical exhibitors, why not begin with that goal, formulate an RFP (Request for Proposal), and see who out there is interested, what they want and what they’ll put on the table. By only dealing with MMPI, the County has seriously limited its options and opportunities… potentially pairing with a convention center operator with no real experience on the basis of a promise of (getting) 10 manufacturers’ showrooms.

“It’s the wrong way to do the public’s business. But that’s the way this whole process has been structured.”

And that doesn’t even touch upon the enormous costs.

This convention center joke has been just that since the County named (then ignored and disbanded) its own stacked Convention Center Facilities Authority a couple of years ago, clearly making unnecessary a $400,000 pre-cooked report of our need for a new convention center.

That’s called wasting money on a decision already made. The Authority’s public meetings were processes in time wasting, a sham at best.

Sanders might be the person for the Plain Dealer to talk to about this issue. I wouldn’t expect that kind of balanced coverage from the paper, however. The last time Sanders spoke in Cleveland – a few years ago now – he spoke at a restaurant directly across Superior Avenue from the PD. The PD didn’t bother to send a reporter and no story appeared. (Note: The last time Sanders spoke in Cleveland, his appearance was hosted by the Cleveland Chapter of the Society of Professional Journalists).

This community is going nowhere as long as prearranged deals favoring a few connected people continue.

I urge the PD to stop telling us something that will cost very close to $1 billion or more is a $400 million project.

Let’s have a little bit of honesty, please.

Of course, the Pee Dee has totally ignored the very great possibility that the County will have to build a parking garage or garages for the convention center.

We have already been told that the city also requires a hotel with significant rooms and that it must be subsidized.

So we have another private venture heavily subsidized by County taxpayers.

This, of course, is regionalism in reverse when the City and County pay for facilities that serve another half dozen Ohio counties in the region.

No expect the proponents of regionalization at the Pee Dee or in our elite circles to remind us we’re going in the wrong direction. Again.

From Cool Cleveland contributor Roldo Bartimole roldoATroadrunner.com
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