Friday, March 14, 2008 at 6:00 AM
Cuyahoga County Commissioners have reached a verbal agreement with Merchandise Mart Properties to build a medical mart in Cleveland. The plan is to build a medical mart that will have permanent showrooms for medical equipment and devices. While the new convention center will host an estimated 50 health-related trade shows and conferences a year. Negotiations were long and difficult. ideastream's Tasha Flournoy has more on how it all unfolded.
County Commissioners called this the beginning of the end. A ray of hope, after five months of serious negotiations with deal broker Fred Nance at the helm. Talks with MMPI were tough at times, but if Nance ever had any doubts, he never made them public. Here he is last December, when it was looking like the talks had hit a snag.
Fred Nance: The fact that we’re looking at different alternatives and have different points of view on some of them initially is the ordinary course. And, again, we are going to get this done, and I think everybody in the county ought to count on that.
At the commissioners’ meeting yesterday, Nance said the public can count on at least two things: A 20 million dollar private investment from the Chicago-company, and that the site for the new convention center and medical mart will be in downtown Cleveland.
In order to make this a viable public-private partnership, the county expected MMPI to put up at least a portion of the investment to the project. That became a major sticking point during negotiations. MMPI Senior Vice President Mark Falanga says his company and the county differed on the definition of investment.
Mark Falanga: We felt that in making a 20 year commitment to this project and focusing our management expertise to it, and delivering what we think will be a lot of activity to this facility, which will be a unique facility, was a significant enough investment.
But, that wasn’t enough for the county commissioners, who raised the sales tax by a quarter percent last October to pay for the construction of the convention center. They wanted a financial commitment from MMPI. When that wasn’t forth coming Commissioner Tim Hagan says he had to make a difficult phone call to his personal friend Chris Kennedy, who presides over MMPI, telling him…
Tim Hagan: We can’t keep collecting this tax without a deal or moving to one that we could consummate. So I made that clear to them and I said we were prepared to move on. I think you gotta do that. I that got their attention and really reestablished our attention to get this done.
That’s when Hagan and his colleagues Jimmy Dimora and Peter Lawson Jones extended the 60-day deadline-imposed in January-and publically mentioned talks with other companies. Deal broker Fred Nance called that a winning play on the commissioners’ part.
Fred Nance: I am confident that the way the commissioners positioned this both in terms of putting on a deadline and expressing their confidence in the concept and the project moving forward whether we did with our friends from Chicago or with someone else helped bring this across the goal line.
The site location had also been an issue in negotiating with MMPI. The company had pushed hard to locate the facility closer to the city’s medical complexes along Euclid Avenue, while county officials insisted on a downtown site. VP Mark Falanga now says they’re all on board with a downtown site. He says MMPI has always looked at the big picture-Improving Northeast Ohio’s economy.
Mark Falanga: A lot of the issues we were discussing although important were small relative to the big picture of this program and the future economic impact it could have on the city and the county.
All is not a done deal though. Nance says he’ll take a week to draft out a written agreement-or memorandum of understanding-between the county and MMPI that will lay out the terms of negotiations.
Meanwhile, MMPI is already working on steering business to Cleveland. Falanga says they’re talking to trade show producers, medical manufacturers, and conference organizers to set their sights on Cleveland.
Tasha Flournoy, 90.3.
Government/Politics, Regional Economy/Business - News
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