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County Commissioners Get Deal & Details On Medical Mart/Convention Center

Thursday, March 20, 2008 at 5:54 PM

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Cuyahoga County's Commissioners approved a deal today 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. Much of the 400 million dollar project will be paid for with a one-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. It's a complicated one, and there's still much to be worked out. ideastream's Tasha Flournoy sketches the details of the project - starting with its funding.

The county will issue bonds for the initial revenue, which it will then loan to MMPI.  That will allow the company to construct and own the facility.  MMPI will then lease the facility back to the county for rent to be paid for with money generated from the county sales tax.  The county will then sub-lease the facility back to MMPI, entitling the company to all revenue generated from project operations and probably making MMPI eligible for private business tax credits.

MMPI will contribute 20 million in cash to operate the facility, with county subsidies of five to six million a year over a 20 year period.  Those subsidies would come from funds that now pay for the current convention center on Lakeside Avenue – funds collected mainly through the county bed tax. 

To negotiator Fred Nance, MMPI’s offer will cost less to operate, saving the county money in the long run, and providing a more up-to-date facility than the outdated one on Lakeside Avenue. 

Fred Nance: Call it the equivalent of trying to sell a satellite sports package on a black and white television with no remote control. They have little to no chance of success and for less than what we are subsidizing that facility for now we’ll have a new state of the art facility.

Under the agreement, MMPI will construct the facility and cover all capital improvement and maintenance costs.  But, Nance says there’s some joint decision making involved.

Fred Nance: In other words we have to agree what’s going to be built with the project budget.  MMPI will construct the facility to meet the county’s requirements subject to obviously cost and design constraints.

But the concerns over design, costs, and construction won’t be addressed until the county commissioners choose a site. The Greater Cleveland Partnership has formed a committee that will recommend a location with two months.

But at least one politician is asking for more public involvement in selecting the site – Congressman Dennis Kucinich.  At the commissioners’ meeting, Marty Gelfand, Kucinich’s staff attorney read a letter from the congressman.

Marty Gelfand: I find it inappropriate to provide this group with the special formal decision-making rights while others are left waiting to see how their tax money gets spent.

County Commissioner Tim Hagan said he was insulted by Kucinich’s letter because they both serve the same constituents and the county has said they will hear public input about the site.

Tim Hagan: We’ll we’re glad to consider any public comment. I’m going to make my decision based on the cost and whether it’s an appropriate site period.

In the meantime, the committee is considering two primary options.  One is to renovate and expand the current convention center.  The other is to build the convention center behind the Tower City complex and connect it to a medical mart in the old Higbee building.

As the county and MMPI officials work toward a site location and design, there’s still an opportunity for either to opt out. MMPI has one year to find 10 tenants for the medical mart and 5 trade shows for the convention center. They can use a maximum of 1.5 million dollars to pay for incentives to seal those deals. If this doesn’t happen either side can call it quits.

Tasha Flournoy, 90.3.

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