I’m not much of a football fan, but from what I can see real estate development is its own kind of rough-and-tumble, drawing the same kind of guys with a focus on winning no matter what the cost.
Former Bengal, Chinedum Ndukwe, grew-up in Dublin, Ohio, just outside of Columbus. Drafted in the 7th round in 2007, he was mostly a reserve defensive back and made OK money for a guy fresh out of college, averaging $425,088 for the four years he played, . But a knee injury sidelined him in 2010 and the Bengals did not renew his contract. After 2 games with the Oakland Raiders in the fall of 2011, they didn’t want him either.
Nedu was smart, articulate, and ambitious. But apparently not star foorball material
Fortunately #41 is breaking all kinds of records in his new profession. In December of 2013, right after Mayor Cranley took office, the City announced 28 year-old Ndukwe had formed Kingsley & Co LLC and would be putting together a group of private investors to transform the former Tower Place Mall into a 775 space parking garage. His partner was Jake Warm of JDL Construction, the same family associated with the Hilton and Carew Tower. Having owned the property since 1988, City Council voted to sell one of our most embarrassing development albatrosses to Warm for $1, and immediately put the asset in the name of the Hamilton County Landbank.
Why the detour to the Landbank? Somebody owed almost a million bucks in back property taxes on Tower Place Mall, but the Port Authority that runs the County Landbank used one of the “unique tools” in their “development toolbox” (please read “tax loopholes for for-profit corporations”) for those taxes to be waived, stating that the new developer had nothing to do with the tax liability and could not afford to make the project work if they had to pay what was owed to Cincinnati Public Schools, mental health services, indigent hospital care, etc., etc., etc.
Fast forward to December of 2014. 12 months. 1 year. 365 days. (Got it, Citizens? Catching on here?)
Tom Demeropilis of the Cincinnati Business Courier reported that 70% of the garage that opened in October was being sold to a San Diego Real Estate Investment Trust for $15,000,000. Let’s do the math. If 70% equals $15,000,000, that means the whole garage is worth $21,428,571.
Now there’s a wide range of numbers as to how much the renovation of the space cost the developers. Tom Demeropolis, a professional journalist not known for outlandish statements who always checks and double checks his facts, puts the number at $9,000,000. Mayor Cranley’s office puts it around $5,000,000. Let’s be conservative. Let’s use Tom’s number and call it a $9,000,000 investment. That puts the profit at around $12,428,570 in one year
That’s a 12,428,570% return on investment, Mr. Ndukwe. Wow. That is, if you don’t include the contributions #41 made to Mayor Cranley’s 2013 campaign (his family came in #7 on the list of contributors with a total of $12,700) – or Christopher Smitherman’s campaign. In any case, I’d say his foray into development qualifies as a touchdown. Ndukwe was wasting his time in football. With that kind of talent just imagine the wealth and power he could have accumulated if he’d started out in real estate in Cincinnati.
And the rest of us Citizens, what should we take away from the story of the Mabley Place parking garage? Look what $12,700 can buy a 28 year-old rookie with no experience and no training. A well-placed political contribution might very well be by far the most profitable investment of all.