We Pay Lucky Lerner- The Billionaire Sport

Since August 2005 you have generously paid in those sales tax pennies on alcoholic drinks $56.4 million to aid the Lucky Lerners. How lucky some people are. Wonder how that happens.

Actually, you can’t blame anyone but yourselves. You voted for it.

When Cuyahoga taxpayers voted to extend the Gateway sin taxes another 10 years it resulted tens in millions of dollars going for the Lerner family.

Why the family? Because the Lerners, now headed by Randy Lerner, control the Browns Stadium for paltry $250,000 a year rent. The impoverished City of Cleveland actually pays way more than that for property taxes on just the land. Just the land because former Mayor Michael White and County Commissioner Tim Hagan saw to it that sports stadiums pay no property taxes. Tax exempt. Forever, says the law.

Lucky Lerner pays no property taxes on Browns Stadium, which sits empty almost every day of the year. Maybe nine or ten days there are paying fans – paying to Lucky Lerner, of course.

The Browns also run a charity called Cleveland Browns Foundation.

I find it almost unbelievable that the charity makes the statement that an “officer receives compensation” from the Foundation. It names Randolph Lerner. It doesn’t give much of that old transparency that everyone seems to believe would be helpful with credibility. It gives no amount of compensation or any reason for the compensation. So we don’t know how much the Lucky Lerner takes or, indeed, gives if he does.

For a link to the foundation’s IRS documents click here

The documents of the charity also note that “During the year, the Cleveland Browns Foundation may have received services and/or extension of credit from taxable organizations with which the officers, directors or trustees were affiliated. All such transactions were performed at arms length and did not result in any impermissible benefit.” Do we trust them?

We have to that the Browns word for it because it is not further explained.

The Browns foundation states that “the primary purpose of the Cleveland Browns Foundation is to help meet the needs of the disadvantaged youth and inner-city youth in the northeast Ohio area from childhood through teenage years. The Foundation’s goal is to attempt to address the social, cultural, financial and other problems faced by disadvantaged youth and try to cure or minimize such problems before the problems occur.”

A noble cause, indeed.

It always makes me wonder then how one of its largest, if not its largest, donations for a number of years is $100,000 annually to the Hero Fund for the “annual support of the families of police officers and fire fighters who died during the Sept. 11 attack on the World Trade Center.”

Also a noble cause but one that has many other contributors.

Why take from the needy children of Northeast Ohio for this?

And does Lucky Lerner make it appear that this is his contribution to this fund?

Lucky (Randy) Lerner is worth $1.5 billion as of 2008. He was chairman of MBNA, the credit card company which was bought by Bank of America for $35 billion. He has a penthouse “in what many consider to be New York’s most prestigious Park Avenue address. The New York Observer … pegged Mr. Lerner as the buyer of the $27.5 million apartment, which is at 740 Park Avenue and was once owned by the philanthropist Enid A. Haupt.”

So I can see why Lucky Lerner would want to contribute to the New York Fund at $100,000 a year, especially since if it comes not from his pocket but from the pockets of Northeast Ohio kids.

By the way, the fact that the Browns Stadium doesn’t pay property taxes on its structure means also that it takes tens of millions of tax dollars from the Cleveland school children while the Browns play out their lease at the lakefront.

How UNLUCKY some people are.

Property Value Reductions to Slam Cleveland & Its Schools

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?

Ritz-Carlton Asks for Two More Tax Reductions

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 percent tax abatement. Back on the tax rolls it now asks for reductions via a reduced valuation on the luxury hotel.

I reported earlier 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.

$68 Million Ready for Handover to MMPI

Cuyahoga County taxpayers now have “contributed” some $68 million for the proposed Medical Mart project. I guess all the great needs of this area have been superseded by special interests again.

Let’s not talk about the Great Recession or people’s needs. Let’s just satisfy Tim Hagan, Jimmy Dimora and Peter Lawson Jones and their desire for a building project – The Tim Hagan Convention Center and Medical Mart. Or should I say the desire of special interests that the three represent.

The $67,975,153.04 was collected by a quarter-percent increase in the sales tax. It was voted without public input. It took effect in January 2008 and runs for 40 years! This tough economic year for Cuyahoga County accounted for $25.8 million in revenue as of the first eight months of 2009.

The Plain Dealer recently in a peculiar sentence told of some expenditures from this $68 million:

“So far, the County has paid the company (MMPI) $1,333,000 to meet with potential contractors, though the company is not required to provide detailed invoices,” the sentence read.

That’s convenient. You mean you send someone one-and-a-third million dollars but don’t require proof of how the money is used?

In a county afloat with FBI agents that seems a rather peculiar way of doing business.

It’s especially strange when later in the same article Jeff Applebaum, hired to write a “new” contract between Cuyahoga County and MMPI of Chicago, declares, “I want to make sure that every dollar the county expends is put to optimal use. You have to see where the dollars are going.” (Applebaum was hired despite the fact that the County paid Fred Nance of Squire, Sanders & Dempsey $750,000 to essentially do the same thing, I thought - broker a deal with MMPI. I guess they just wanted to keep Nance occupied.)

I agree with Applebaum on transparency but he didn’t return a telephone call to find out how the two – no invoices from MMPI and knowing where dollars are spent – squares with him and County officials.

Taking MMPI at their word alone doesn’t strike me as transparent or wise.

Could some of that money have gone to Hagan’s buddy, Chris Kennedy of MMPI? The Kennedy family friend got the contract without a bid. Could other MMPI executives be paid from this account instead of their regular business?

I’ve seen it happen before.

When the City of Cleveland gave a $7-million repayable (after 20 years) grant to a Forest City offshoot for a renovation of the Halle building, salaries of Forest City executives showed up on receipts for the Halle project.

For example, one executive had 30 percent of his salary of $230,000 charged off against the city money. Another executive paid $340,000 a year would have part of his salary for each of five years charged off against the Halle account at a percentage from five to 10 percent a year. (No wonder the project had a $10 million overrun, which meant that the city’s supposed share of profits equaled zero and never went above that figure.)

Isn’t it time for total transparency for this project as it starts to rev up? Isn’t it time that the Plain Dealer as the paper of record here insist on seeing the records? And not wait 10 years for the next FBI probe?

Let’s get this one right and not have another Gateway.

News Bulletin! News Bulletin!

The Greater Cleveland Partnership backs the County Reform for an executive and 11-member Council that it gave $100,000 to put on the ballot.

What strange behavior. Supporting something you paid $100,000 to birth. Startling.

Well, the Plain Dealer today thought it was news. The Pee Dee ran a four-column headline, “Business group backs county reform plan” on the Metro front page. Since the Partnership paid for the ballot issue you’d have to believe that the “business group” – or Republican group, if you will – wants it.

The Pee Dee wants this reform badly. Really badly. Awfully badly.

The problem is that it appears more a plan to elect some Republicans than a well thought out reform plan.

And even worse it makes the County Prosecutor about the only present office holder to retain a position for election. The engineer, treasurer, auditor, coroner and sheriff will disappear as elected offices. That’s a big wipeout.

What that suggests to me is that the County Prosecutor – Bill Mason – will have pretty much all the power over justice in the County. Mason also, as a political power, will have a lot to say politically about who gets to run for the County executive. As it is, Mason runs his prosecutors for judgeships, giving him troublesome shot at power over the prosecution and then the judgment of those indicted.

Too much power equals too little real justice.

Somebody’s going to have to explain how this serious power shift makes sense before trying to sell reform.

The Pee Dee, Mason and some Republicans are trying to jam through a change without real public input or understanding.

What the Pee Dee, Mason and the Republicans are hoping for is that Cuyahoga County voters are so fed up with corruption of some public officials that they will vote for anything that smells like reform.

But this reform is not so sweet smelling, no matter how much the Pee Dee editorializes in its news and editorial columns.

Let’s not get stampeded into a reform that makes us unhappy and less safe from powerful forces and politicians.

Voinovich Avoids Health Issue With Slots Slap

Why did Sen. George Voinovich take such a strong slap at Gov. Ted Strickland on the slot machine issue? Health care.

Voinovich – the Artful Dodger – is dodging another issue that could help millions of Americans and break the hold of big insurance over our health care.

Of course, Voinovich and his family have had government health care for more than 40 years.

But he doesn’t want others to have it.

Why?

Because he’s been a shill for wealthy and corporate interests for every one of those 40 years.

Is he going to get away with being an Artful Dodger on the most important legislation in decades? I guess he will. He has the protection of the Pee Dee, wealth contributors and he’s not running for re-election.

But George Voinovich has been one of the worse public officials during my years covering politics in Cleveland.

And he’s fooling the Cleveland public again.

RTA Tries to Fool Public With Pathetic Move

RTA tried a pathetic attempt to avoid solving a problem by trying obfuscation that really should fool no one.

The problem: circulation buses that provide service for transit-dependent people. RTA (Regional Transit Authority) will cut all circulation vehicles this month, leaving those dependent upon such a service abandoned.

RTA’s sorry solution: a proposal for a new service – a once-a-week shuttle service as a pilot project instead of circulators.

It’s called the Weekly Shopper Service, according to an RTA press release. How cute.

Do they think people only need transportation once a week?

C’mon. Does anyone think this is a solution? It is fig leaf for RTA to avoid facing the fact that it is eliminating an important service.

“We think that this proposed jointly funded proposal is innovative, will be very responsive to the needs of many, and much appreciated by our community,” says Joe Calabrese, RTA CEO and General Manager.

Joe, are you saying that with a straight face? Only an idiot would fall for this solution.

Even worse, the plan is contingent upon areas that want the service to provide for half the cost.

So RTA really guarantees that it won’t ever be required to provide the service.

I’m aware that RTA has a financial problem with lower revenue because of declining sales tax receipts, a major funding source for the transit operation.

However, it’s time RTA cut where it least hurts transit-dependent people. Maybe start with the front office. And certainly the downtown free services that won’t be cut as the neighborhood circulators are being dumped. Downtown has resources of its own and should provide that service itself, it if is needed.

The only reason RTA management is offering this meager – really unacceptable solution – is that a band of persistent supporters of primarily the Lakewood circulator has continue to raise hell with RTA over the cutbacks.

They have embarrassed the RTA brass.

RTA management and its board aren’t used to citizen pressure.

So they have come up with the non-solution as a solution.

Not good enough, Joe.

Major Bank Asks Property Tax Value Cuts

Hard to believe that it was 32 years ago that the first tax abatement for the National City Bank building at Euclid & E. 9th Street became a central issue in the defeat of a mayor. Presently, its new owners are seeking a $1,489,500 deduction in its value for tax purposes.

The first tax abatement given by the City of Cleveland came as a result of a law drafted by Squire, Sanders & Dempsey.

Mayor Ralph Perk successfully pushed this first abatement and paid a heavy price because it, along with other decisions that earned him a reputation as a give-away mayor. Dennis Kucinich and Edward Feighan finished one-two in the primary race, knocking Perk out of office.

Perk’s abatement was a bit more conservative than those offered later by Mayor George Voinovich. The National City bank building was given a 20-year abatement that declined by 25 percent every five years, starting at 100 percent and finishing in the last five years at 25 percent. Voinovich inaugurated 20-year abatements at 100 percent for the duration.

In March, owners of the building – Kope Realty/PNC Financial Services Group, successor to National City Bank – requested of the Board of Revision a $1,48 million reduction in the value of the property.

The E. 9th & Euclid corner over the years has been home to some of the city’s major banks – Huntington National, Ameritrust (Cleveland Trust) and National City. Cuyahoga County owns the old and empty Ameritrust site, and the Huntington Bank building has tenancy troubles.

The prime downtown corner has fallen on bad times.

The city had to declare the National City site blighted back 32 year ago in order to qualify it for the tax abatement. National City Bank at the time was one of the most profitable banks in the U. S. It had been acquiring properties for some time in that area for the new bank building.

At the time, Perk awarded another abatement for a Sohio headquarters building behind Tower City. It was never built. Later, Sohio constructed a headquarters building on Public Square. But no abatement was sought as Sohio was awash with North Slope cash. The profitability of the oil company made an abatement a tough sell. Mayor George Voinovich, who still feared Kucinich’s anti-abatement supporters, shunned a Sohio abatement.

Kucinich battered Feighan on the abatement issue. Feighan had voted on the legislation as a state representative.

The request for a reduction in the National City Building follows other such requests and appears to be a forerunner of more active and heavier requests for tax value reduction early next year.

This will be a further financial problem for the City of Cleveland as value reductions mean a decline in tax revenue for the city and particularly for the Cleveland schools. Schools receive some 55 percent of collected Cleveland property tax revenues.

Tom Beres Show Marred by Conflicts of Interest

WKYC’s Tom Beres remains one of the few serious reporters on local television. That said, it’s shameful that his “Between the Lines” Sunday show too often has conflict of interest written all over it.

Not his personal conflict of interest. Those of his “guests.” That, however, makes it his problem.

WKYC should either do this show right or not do it at all. Management apparently wants to take credit for Beres’s good reputation but doesn’t want to do the show as it should be done.

Beres, entitled Senior Political Reporter for WKYC, has a few minutes each Sunday to rush through comments about important issues – another problem with the show. More seriously his guests are typically people who represent political and business interest as consultants.

They shouldn’t be given air time.

This week was a perfect example when Beres had to disclose that both his guests represent gambling interests as he opened a discussion of gambling issues. Beres may believe that the quick and insufficient discloser he made covers his ass but really it points out a serious problem for his show.

One of the subjects they discussed: Gambling.

Both his guests - Mary Anne Sharkey and Dennis Eckart - represent gambling interests involved in current issues. Two gambling issues are heavy in the news – slots, as prescribed by Gov. Ted Strickland, and casino gambling up for a state-wide vote in November.

Here’s a link to his page for this week’s show:

http://www.wkyc.com/news/politics_govt/politics_article.aspx?storyid=120979&catid=130

These gambling issues involve millions of dollars in lobbying and tens or hundreds of millions of dollars that could be spent if realized. Serious problems evolve from gambling and any discussion about the issue should involve people with absolutely no interest in the financial outcome.

The other problem with this show and other Between the Lines is the little time given. That results in Beres rushing through important issues of the day hastily because of the time factor.

I believe he’s saddled with guests he might not choose if he had the authority. I hate to think they are his real personal choices.

However, the decision is his responsibility, but it also falls upon the Ch. 3 station management to offer the public honest commentary in a show that suggests it is providing honest public analysis.

It’s anything but unbiased when you have lobbyist/consultants assessing the very issues that they depend upon for their livelihood.

It happens too often on this show.

Livingston Spanks Pitcher Lee But Misses Something

I sort of don’t pay much attention to the Plain Dealer sports pages. But it’s hard not to read them since there’s so little else to read in the paper. So last week I caught Bill Livingston’s spanking of pitcher Cliff Lee.

Sports gets a lot of free publicity and eats up a lot of resources sorely needed elsewhere.

Livingston’ last week brought some reality to the sports pages when he chastised Lee, traded recently to Philadelphia, for Lee’s comments about Cleveland fans. Lee blamed fans for not attending more games. He said, “That’s why the team didn’t make money, because the fans weren’t there, supporting the team.”

Livingston wrote, “It is hard to believe anyone could make such a clueless, almost callous, statement.”

He pointed out that those working fans were encountering a deep recession here.

“Do you suppose Lee felt bad for the Cleveland fans who have lost their jobs? Does that matter? Or is Lee’s self-absorption too all-encompassing to permit a glance at the world outside the white lines,” Livingston wrote. Tough stuff.

But major league ballplayers are so well treated in our society that it’s hard for them to empathize with ordinary people. Everything is too easy for them. And sports reporters are prime enablers.

We helped them be callous, Bill. We treat them too well.

Livingston could have mentioned that Lee’s multi-million contract ($4-million for 2008; 2009 not available) was subsidized by you and me. By our taxes and other gifts.

Lee pitched in a $154-million stadium paid for largely by Cuyahoga County taxpayers. Indeed, every January some $8 million or more of public funds, mostly general funds from the strapped County, goes to pay bonds, added by the extra cost of the arena, part of the Gateway project.

If the team owners had to pay for their own “factory” they wouldn’t be able to pay those multi-million contracts.

Further, the stadium and arena pay no property taxes and never will, allowing more revenue to be siphoned off to the teams and its players.

Rarely, if ever, do sports reporters give us this information. I’d say they avoid touching these economic issues.

So, Lee actually owes a portion of his fancy salary to the fans he was dissing. He was biting into the hands that fed him.

Newspapers also provide sports constant free publicity to sports, adding to the value of the sports franchise and its players. No other business – and it is a business – receives such attentive helpful coverage.

I’ll say this for Cliff Lee, however. He gave $10,000 to Cleveland Indians Charities in 2007, the latest IRS figures available. So he had some concern for Clevelanders.

I thank Livingston for being less than a flack for sports figures. We need more critical coverage on the sports pages. Especially the economics of the industry. Yes, it is an industry. One that takes too much of our community resources.

He was a 2004 Cleveland Journalism Hall of Fame recipient and won the national Joe Callaway Award for Civic Courage in 1991.

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