Cleveland’s Been Very, Very Good to the Forest City Downtown Gang
Oh, joy. The City of Cleveland gave the Ratner/Miller gang another deal. A break on repaying loans on money they’ve been playing with for some 20 years.
Who deserves it less?
I wish newspapers would keep a good file on these people so as to give a true picture of just what vultures they are.
Is that too cruel to say? Would leeches be kinder? You know, blood suckers.
In the 1980s, Mayor George Voinovich and Council President George Forbes were very good to the Forest City manipulators – Ratner and Sam Miller families.
They just loved piling on millions of dollars to these people.
The Plain Dealer reported on Wednesday that the city cashed in on UDAG (Urban Development Action Grants) to the tune of $10.3 million on debt due of $15 million. The payments were to repay loans made to Forest City interests. (Council members fought over scraps for their neighborhoods from these millions.)
Here’s what George and George – City Hall bosses in the 1980s – gave to these leeches:
Tower City retail: $10 million.
Tower City III: $2.7 million.
Tower City IIIa $2,036,000.
Ritz Hotel: $7.9 million.
Ritz Hotel 100 percent tax abatement: $34.5 million.
Tower City-Old Post Office: $9.2 million.
Halle’s Office Building: $7-million.
That’s more than $73 million.
The funds were federal, routed through Cleveland City Hall. UDAGs were given to cities based on the poor economic conditions. Cleveland, during the Republican Ronald Reagan presidency, was very well treated. Voinovich got gobs of money to spread around to rich developers.
The rationale for these hefty grants was based on blight and poverty conditions of the city. Cleveland rated high on both counts. Of course, the money went to the wealthiest Clevelanders. Welfare for the rich. Not to the impoverished.
(The dance continues. This week $10.7 million in UDAG money goes to the Mid Town Tech Park on Euclid Avenue along with $3.5 million in state money while the developers of Hemingway Development put up $2.9 million.)
George and George were so concerned about erasing poverty that the UDAGs, which were essentially loans, were given to rich developers typically at low interest or no interest at all.
Making them more lucrative for these city hall manipulators, the loans often were not repayable 20 years out. Not a cent of interest for 20 years.
Good luck if you can borrow from generous loaners – the taxpayers.
Wouldn’t it be nice if your home mortgage was so designed? Pay no interest and don’t pay a penny back for 20 years. There probably would be no home foreclosure problems at those rates.
This is how the Voinovich administration handled public money throughout the 1980s. Yes, Voinovich the skinflint. Voinovich, the guy with the reputation of a budget hawk. Mr. Giveaway.
It was a subsidy heaven under Voinovich and Forbes and a docile City Council. Is there any other kind?
Forest City through these years also received property tax reductions, claiming bad economic times for its Tower City properties. In the 1990s Tower City property value was lowered by one-third of a billion dollars.
And don’t think the $800 million new convention center & med mart don’t have anything to do with Tower City’s desire for more economic impact in its vacant.
We’ve been plowing money downtown for three decades to keep their business alive.
In addition, the Regional Transit Authority (RTA) also helped Tower City’s owners. Not only by delivering tens of thousands of transit riders to its doorstep.
Under political and civic pressure, RTA spurned federal funds to quickly build the Waterfront Line, which runs to and from Tower City via the Cuyahoga River and to the lakefront. The line was supposed to help the Rock and Roll Hall of Fame and Museum. It couldn’t hurt Tower City shops.
Cost: $69 million for the money-losing line. Voinovich and his business supporters wanted the rapid line built quickly. So they avoided federal funds, which came with rules and time delays. Instead, we paid for the losing line with local cash. All local cash.
Helpful also was the Gateway Walkway constructed by RTA via Tower City at a cost of from $11 to $13 million, depending on one or another report. RTA actually pays Tower City a charge for the walkway and an escalator from the rapid station to the Tower City complex. RTA, of course, delivers thousands of customers to Tower City’s retail complex.
Forest City acted as the construction manager for RTA’s redo of the RTA station at Tower City. As a result of a dispute, Forest City sued RTA for $25 million and got $10 million in a court settlement.
RTA was paying $65,000 a month to Tower City for running its lines into Tower City last time I looked. That was $780,000 a year. RTA also agreed to pay $32,000 annually to “reimburse” Tower City for central plant operations.
RTA was also being charged in 2003 some $14,000 to $20,000 for electricity use and another $15,000 to $18,000 for heat and air conditioning.
Nothing comes cheap when doing business with Sam.
Of course, we know that former Rep. Lou Stokes became a member of the Forest City Enterprise board after he left Congress. He was helpful in having the new federal court building located where — on Forest City property. And, of course, there’s a walkway from Tower City to the court.
Do you think the PD will ever present the case of privilege against these guys? Not in my life, surely. Maybe when they leave Cleveland, ala Modell?
I remember that the Voinovich people crowed that when they gave Forest City $7 million in the 1980s for the Halle’s building the city would share in profits. A great deal for the city, they said. There never were any profits. Indeed, Mayor Mike White, a close buddy of Sam Miller, allowed them to pay about half of the $7 million loan rather than pay the full $7 million.
In fact, by 1987 Halle’s was LOSING some $10 million. If you look at it today it is even more of a mess. (By the way, the State of Ohio also subsidized it with $6 million in liquor profit funds, and it got a $10-million in industrial revenue bonds. The partners put in equity of only $4.1 million.)
The Halle deal was good for the Voinovich family, however.
The Halle’s deal earned a $90,500 fee for George S. Voinovich firm, operated by members of the mayor’s family. Victor Voinovich, the mayor-governor-senator’s brother, earned $84,240, a commission on a lease in the building by the Climaco law firm. Victor got other lease commissions at the building also.
Forest City apparently helped insure that the city would never get a penny.
They put several Forest City executives on the salary tab of Halle’s. One for 30 percent of his time on a salary of $230,000. Another being paid $340,000 a year had his salary at different levels for different years charged off against the Halle’s project.
Does that sound anything like a couple of pols with pals? Russo and Dimora names mean anything.
The opening day of the Halle’s building was celebratory.
As the caterer put it, “coat check girls (were) from Hathaway Brown or Laurel.” It said further, “I recommend that you have a security guard to protect the expensive coats.” You know about those downtown crooks.
But the city overseers were particular about some expenses. They denied the cost of an Ebony Grand Piano for the lobby at $4,451. This was deemed a non-applicable cost they told the developers.
It’s all just too ridiculous to contemplate but it was business as usual.
And apparently it remains business as usual right through Voinovich and White and into the Jackson administration.
There were so many other ways that Forest City helped damage Cleveland that it would take a book to reveal.
Somebody please save us from our business/civic leaders.
They’re killing us.
Roldo Bartimole celebrates 50 years of news reporting this year. He published and wrote Point of View, a newsletter about Cleveland, for 32 years. He worked for the Plain Dealer and Wall Street Journal in the 1960s.
He was a 2004 Cleveland Journalism Hall of Fame recipient and won the national Joe Callaway Award for Civic Courage in 1991. [Photo by Todd Bartimole.]
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One Response to “ROLDO: Cleveland’s Been Very, Very Good to the Forest City Downtown Gang”
Richard
Lou Stokes with FCE, too??
I thought he was with Dewy, Cheatem & Howe, along with Squire Nance. You know, the bond folks.
Does FCE and Sunrise Land Development have anything to do with the Juvenile Justice Center swindle or just the land acquisition?
How about that land for the new sewer over in Brat…
Say.. wait a minute!
Am I going to need a lawyer?