Friday, March 21, 2008 at 5:00 AM
Cuyahoga County's Commissioners approved a deal yesterday that will allow Chicago-based Merchandise Mart Properties to build, own, and operate a combination Medical Mart and Convention Center for a minimum of 20 years. ideastream's Tasha Flournoy sketches out the details of the project.
Much of the $400 million project will be paid for with a quarter percent county sales tax approved by the commissioners last year. It’s taken just under six months for county negotiator Fred Nance to broker the deal that’s touted to bring 50 trade shows a year to Cleveland.
So here’s the deal: The county will issue bonds for funds to loan to MMPI, so they can build and own the facility. Then the county will lease the facility back, paying rent to cover operating costs, and then sublease it back to MMPI to take advantage of private business tax credits. It’s a 20-year deal that Nance says the project will cost less to run than the 6.5 million dollars it costs to run the current convention center. And, he says, it will bring in more business.
Fred Nance: The 6.5 that is being paid now is going to a convention that has about 10 percent occupancy. That drives less than 25 percent of our hotel room bookings.
MMPI will pay for all the capital costs and repairs, but the county will choose the convention site. County Commissioner Tim Hagan says they’ll have public hearings on site selection, but the commissioners will make the final decision.
Tim Hagan: You can tell me I like the convention site the present one or I like the Tower City site, but I’m going to say well that’s very interesting but what about the cost and is it an appropriate site.
Once the site is chosen, both sides have a chance to opt out. MMPI has one year to find 10 tenants for the medical mart and 5 trade shows for the convention center, and up to 1.5 million dollars to seal those deals. If that doesn’t happen, either side can call it quits.
Tasha Flournoy, 90.3.
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