Yikes! It's an Emergency

Stand back, Everybody.  We’ve got an emergency coming through.

It’s an 800,000 square foot Class A office tower with 1,700 parking spaces, the second phase of a development project that has been discussed for ten years, officially proposed to Council in 2003, Queen City Square Phase I completed a couple of years ago.  But now it’s June of 2008, there’s legislation backed up the wazoo as City Council moves into the June crunch, right before they break for summer recess.  You know how these things happen.  Somebody gets busy and forgets to file the 142 pages of contracts on a timely basis.  Now everybody’s in a panic and the developer has to get this going or we’ll miss out on a once-in-a-lifetime opportunity.  They’ve got contractors waiting and want to be first in line on Monday morning for their demolition permits. East Fourth St. is going downhill fast.  Besides, it’s win-win.  Big corporations are just waiting for new Class A office space to bring their employees to Cincinnati. If we build it they will come, but we’ve got to build it today, I tell you, today before Covington or West Chester get the jump on us.

Besides – it’s just the same old yadda, yadda.  You know, 100% 30-year tax abatement on the biggest office tower we’ve ever built in this town. I mean – you can’t do a deal in Cincinnati if you make the developer pay property taxes, not if you’re going to be a world class city.  Oh – just as a little aside, the developer doesn’t want to actually own the building.  The developer wants the Port Authority – a “quasi-public” agency whatever that means – they want the Port Authority to actually own it.  They’ll lease it.  Which kind of potentially weakens the bond rating of the city.  But it probably won’t.  And we’re just going to have to throw in $1,175,000 for the construction of the outdoor plaza.  Oh, and a few little minor public improvements to the site for another $2,575,000. While we’re at it, why make them pay any sales tax on their construction materials of this $323,000,000 jewel?   Chump change really.  Don’t worry about it.  Or the Tax Increment Financing we’re going to use to pay for the garage which is 20% of the costs. Nobody really understands that stuff – but believe me, it’s win-win all the way.

Because we know these guys.   Worked with them for years.  Fine, upstanding corporate citizens. They sure put on a great tennis tournament, don’t they?  And if John and Mario say it’s good, it’s gotta be good.  Because why would they lie?

Come on, City Council.  Don’t be a wuss.  Vote.

* * *

Under Ohio law and City Charter an ordinance must have three readings before Council votes on it, which means a standard ordinance would take an average of three weeks to work through the process.  But Council often votes to waive those three readings, which it can do if a super-majority declares the ordinance to be an emergency “necessary for the preservation of the public peace, health, safety and general welfare.”  An emergency ordinance is not subject to referendum under Ohio law and takes effect as soon as the mayor signs it, while an ordinance passed without an emergency takes effect thirty days later.

While the Queen City Square example cited above is perhaps the most egregious case of manipulating the political process to eliminate any possible public discussion of a controversial issue, unfortunately this case is not unique.  Every single development deal I have been able to identify as using Tax Increment Financing since 2002 when then-council member, John Cranley, introduced the legislation has been passed on an emergency basis.  This means the citizens of Cincinnati have never had the opportunity to ask fundamental questions about where and how we use public dollars as incentives for development until after these deals are already signed and there’s nothing to be done.

Tax Increment Financing combined with 30-year abatement is highly complex.  California, the state that invented the financing structure, has discontinued its usage after several lawsuits and it’s being contested in many other cities across the country.  While responsible usage of TIF funding has been an important tool in jump-starting the Over-the-Rhine renaissance, it is highly prone to abuse. Having sat and listened to Council argue about a $100,000 bike infrastructure improvement like it was the last dime in our collective pocket – and especially in light of Mr. Cranley’s emphasis on back-to-basics balanced budgets – we need to take the time as a community to discuss every single one of these developments.  We’re talking about hundreds of millions of city tax dollars on a single project and giving away that kind of money to a private-profit developer has never been and will never be an emergency.

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