Suckered Before, Why Not Again

Who wants to be labeled a Sucker? Hardly anyone, I would guess.

Then why do we allow ourselves so frequently to play “The Suckers” for all kinds of self-interest schemes?

Think Tim Hagan and Jimmy Dimora. Think maybe that they played their swan song as public officials with another tax. One more stab in the back to their constituents, before out the door.

I was in Akron and bought something last week. Summit County sales tax –is 6.25 percent. Now that Hagan and Dimora have slapped on their quarter-percent increase, we in Cuyahoga County will pay 7.75 percent. That is a full one-and-a-half percent more than consumers in Summit County pay.

Buy a $30,000 car in Summit County you will pay $1,875 in sales tax. Buy the same car in Cuyahoga County at the new rate, you pay $2,325 in sales tax. That’s $450 extra on the purchase. In the next 20 years, you may buy two or three cars. That would cost you $900 or $1,350, respectively. Since these “temporary” taxes usually are extended, you can expect to pay even more on future purchases.

Then add all the other purchases you will make in 20 years, or maybe 30 or 40 years. Televisions, iPods, DVDs, radios, refrigerators, stoves, washing/drying machines, even soap powder and shoes, to say nothing about the kids’ clothing as school begins again.

Do you begin to get a feel for how much money you will be paying out? It may be small change each time. Yet it adds up to significant costs and to millions and millions of dollars that Cuyahoga County consumers will NOT have to spend on, say, food.

South Euclid Mayor Georgine Welo cleverly offered one 25-cent piece to Commissioners Hagan and Dimora. Presumably mocking critics. It was to show people how small the cost would be to consumers. Welo was misleading; it will cost hundreds and hundreds of dollars for each family. It is not a one-time tax, but a constant tax, every day on almost every item, for 20 or more years.

Now, of course, you are told Cleveland needs this tax for a Medical Mart. That thousands of visitors will flock to Cleveland. That hundreds of millions of dollars will pour into the city.

There’s a little story of forewarning I want to tell.

In 1988-89, I sat through City Council meetings on one of the most significant economic development projects in Cleveland’s history.

It is called Chagrin Highlands. This involved some 630 acres of developable land, owned by Cleveland.

The promises for Chagrin Highlands were great – lucrative tax revenues, jobs - good jobs, we were told. Great for Cleveland and its suburbs. Was this regionalism, corporate style?

As it now stands, Chagrin Highlands has delivered two office buildings that fit its promise with a total of more than 226,000 square feet. It will add another significant project, a property tax-free 200-bed hospital in a project planned by University Hospitals, likely pulling people farther from Cleveland.

However, let’s take a look at some of the rest of the project area. The results I saw on a short ride out to Chagrin Highlands last week were more than disappointing.

When the plan was announced it called for “a high-end commercial/office complex” with “corporate headquarters for Figgie International (now out of business and no headquarters); up to 3.2 million square feet of Class A office space (Class A would be the quality of Key Center downtown); 300,000 square feet of flex (multiple occupancy/use) space; an 80,000 square foot specialty retail mall; and an initial 250-room first class hotel possibly followed by a second hotel planned within a later development phase.” (This from the city’s Master Development Agreement with the developer.)

In other words, the promise of valuable tax-paying and job-producing development.

Here’s what I found now nearly 20 years later on a ride to Harvard & Richmond Roads, right at the doorstep of a multi-million state expansion of I-271 and a new interchange:

Now the bad:

In other words, another low-tax, low-end, cheap-job shopping outlet. These businesses could be built anywhere. Did we really need another such collection?

This disappointment is called Harvard Park. I’d call it Cheapskate Park or Everybody’s Low-Rent Mall.

These kinds of outlets could be built anywhere. And they are. That’s the sad problem.

At another Chagrin Highland enclave on Orange Place, on a newly created part of the street, I found:

Couldn’t most of that go anywhere?

In a memo back in 1995, a Figgie official (STI Properties, a division of Scott Technology, formerly Figgie, shares the development) warned about Jacobs, who subsequently became the lead manager of the project. He wrote, “I am not certain that they (Jacobs Group) would have been my first choice to act as the developer; however, in light of the current conditions, I believe it is prudent to proceed with Jacobs while being mindful that they will bear close watching and will require pressure to make them meet performance goals and standards.”

Tell me how these retail businesses stack up to the great hype of the late 1980s when the politicians of Cleveland and some suburbs agreed to this major project? The Chagrin Highlands acreage - city-owned land - was in Beachwood, Orange, Highland Hills and Warrensville Heights. Cleveland shares typically a 50 percent share of income tax revenue. Not much at a sub shop.

How does this stack up with the huge subsidies made by the State of Ohio for Chagrin Highlands? Are we getting our money back in new business?

A Plain Dealer story in late 1992 reported, “The first highway construction contract in a $150-million package was awarded by Gov. George Voinovich….” Other road costs came with the widening of parts of Harvard, Green and Richmond Roads in the development site area. The road construction makes Chagrin Highlands perfectly situated, accessible from most anywhere. I-271, with the new exchange, sits at the doorstep of what - fast food spots? Chagrin Highlands describes its development as “situated on one of the largest major market Greenfield sites in the United States.” It web site greets visitors, “World Class, Leading Edge.”

What a bargain Voinovich gave us. A former law partner of the then mayor was on the board of the Figgie when the deal was negotiated. Forbes got his boy Jacobs in with pressure on Voinovich and Figgie.

Jacobs is tossing up crap buildings in Chagrin Highlands. Why? I guess because that’s the easiest for him. He’s developing stuff that has short retail life on land enhanced by hundreds of millions of public transportation dollars.

Consultants called this land the most valuable developable property between Chicago and New York. Yes, that precious. So why use any of it for fast food and cheap retail that we already have too much of?

Our leaders some 100 years ago had the foresight to accumulate this land outside the city. Wish that today’s leaders had protected the legacy.

In the early 1990s, the deal was interrupted by a lawsuit when Mayor Michael White – apparently finding out about Forbes’s deception for Jacobs – held up the project after he took office.

White was so passionately eager to thwart Jacobs – one way or the other – he once had delivered 35 boxes of Xeroxed copies - totaling tens of thousands of court case papers - to the Free Times offices. Unsolicited. He wanted ink.

My take on this is that White was working with Forest City Enterprises and the Ratners who didn’t want Jacobs to put up a higher-level retail until Beachwood Place expanded. The Ratners, having the political pull with White, had interests in the latter. And so it has gone. And so it still goes.

The Free Times wrote at the time: “The property is so important that three governors and two mayors have dreamed of one day turning it (Chagrin Highlands) into a world-class research-and-development park replete with high-tech office space.”

Sound familiar?

Maybe that reminds you of the great push for a Medical Mart.

Please! The entire Medical Mart scheme has to do with creating a prop for a new Convention Center for – once again - the Ratners. Nothing more. There will be no throngs of medical travelers to Cleveland. If a medical mart has such great value, a dozen cities would have been there already.

“Let’s build a Medical Mart – Jobs, Revenue, Progress!”

We’ve been suckered again.

From Cool Cleveland contributor Roldo Bartimole roldoATadelphia.net
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