Tag Archives: John Cranley

This Week’s Guess on the Lytle Park Mystery Hole

The 1-71 tunnel completed under Lytle Park in 1970 is only a little over 1,000 feet long – you can see daylight at the other end when you enter it – but that still makes it the longest tunnel in Ohio and the Ohio Department of Transportation is clearly taking their responsibilities very seriously in terms of updating the ventilation fans and lighting systems to the tune of $30 million, a project that will take over two years.

In case you haven’t been down to check out our Mystery Hole in a while, this is what it looks like now:
IMG_5433 IMG_5434 IMG_5436 IMG_5437

We affectionately refer to this project as the Mystery Hole because it’s difficult for non-engineers of average intelligence and reasonable common sense to understand the need for this Hoover damn-like structure to ventilate such a tiny little stretch of highway.  Smart folks with City Hall and construction experience started to contact me shortly after they saw the layout of the footers, suggesting there was something more to find out about the real scope of this project.

The main floor is four feet thick and took almost 1900 yards of concrete.  Operations began around 11:30 pm on Monday, October 19 and ran continuously through Tuesday afternoon.  Two concrete pump trucks ran that whole time with as many as 14 concrete trucks per hour during the 16 hour operation.

Come on. Admit it.  It looks just a tad bit excessive, don’t you think?

A couple weeks ago I had coffee with a reader who has worked for a wide variety of government agencies including OKI (the Ohio Kentucky Indiana agency responsible for oversight of federal transportation dollars) and he is passionate about transportation.  After giving the problem a few minutes thought he suggested the project makes perfect sense if it’s not just to ventilate the existing tunnel but enough power to take care of the entire length of Ft. Washington Way if and when they cap it for future development.

Mayor Cranley used an Emergency Ordinance last year to rename part of 3rd St. in honor of Carl Lindner, and when I questioned why it was an emergency a member of his staff explained to me that the Mayor was hoping the announcement at Great American’s annual Christmas party might encourage them to help pay for the cap.  Which surprised me.  I didn’t even know the City of Cincinnati wanted to cap the highway – but as this is the most reasonable explanation yet for the Lytle Park Mystery Hole, I’m starting to suspect we do.

Once again, as in all things involving commercial real estate development, the most important questions for citizens to ask are: “How do these decisions get made?” and “Why don’t reasonably intelligent non-engineers with average common sense trust their government?”  Why – oh why – is it necessary for me to play detective?

This Week's Guess on the Lytle Park Mystery Hole

The 1-71 tunnel completed under Lytle Park in 1970 is only a little over 1,000 feet long – you can see daylight at the other end when you enter it – but that still makes it the longest tunnel in Ohio and the Ohio Department of Transportation is clearly taking their responsibilities very seriously in terms of updating the ventilation fans and lighting systems to the tune of $30 million, a project that will take over two years.

In case you haven’t been down to check out our Mystery Hole in a while, this is what it looks like now:
IMG_5433 IMG_5434 IMG_5436 IMG_5437

We affectionately refer to this project as the Mystery Hole because it’s difficult for non-engineers of average intelligence and reasonable common sense to understand the need for this Hoover damn-like structure to ventilate such a tiny little stretch of highway.  Smart folks with City Hall and construction experience started to contact me shortly after they saw the layout of the footers, suggesting there was something more to find out about the real scope of this project.

The main floor is four feet thick and took almost 1900 yards of concrete.  Operations began around 11:30 pm on Monday, October 19 and ran continuously through Tuesday afternoon.  Two concrete pump trucks ran that whole time with as many as 14 concrete trucks per hour during the 16 hour operation.

Come on. Admit it.  It looks just a tad bit excessive, don’t you think?

A couple weeks ago I had coffee with a reader who has worked for a wide variety of government agencies including OKI (the Ohio Kentucky Indiana agency responsible for oversight of federal transportation dollars) and he is passionate about transportation.  After giving the problem a few minutes thought he suggested the project makes perfect sense if it’s not just to ventilate the existing tunnel but enough power to take care of the entire length of Ft. Washington Way if and when they cap it for future development.

Mayor Cranley used an Emergency Ordinance last year to rename part of 3rd St. in honor of Carl Lindner, and when I questioned why it was an emergency a member of his staff explained to me that the Mayor was hoping the announcement at Great American’s annual Christmas party might encourage them to help pay for the cap.  Which surprised me.  I didn’t even know the City of Cincinnati wanted to cap the highway – but as this is the most reasonable explanation yet for the Lytle Park Mystery Hole, I’m starting to suspect we do.

Once again, as in all things involving commercial real estate development, the most important questions for citizens to ask are: “How do these decisions get made?” and “Why don’t reasonably intelligent non-engineers with average common sense trust their government?”  Why – oh why – is it necessary for me to play detective?

Cincinnati Park Levy and the Lucky Nine

If you live or work in one of these nine neighborhoods, there’s a high probability you are an enthusiastic supporter of Mayor Cranley’s property tax increase for the parks:

Central Business District

Clifton

College Hill

Evanston

Mt. Airy

Mt. Auburn

Over-the-Rhine

Roselawn

Westwood

These are the fortunate folks singled out to receive the majority of the goodies from the 13 projects on the Mayor’s list of suggested possibilities (it’s not definite – we have to trust the Mayor and all future mayors as to what they want to do with these funds) for the $80,000,000 to be borrowed if the levy passes next week.  The list includes an interesting mix of new amenities for our city, although, oddly enough, over half of them have absolutely nothing to do with our existing park facilities.

The “urban campground” in Roselawn is actually on private church property owned by New Prospect Baptist where Damon Lynch III is the pastor.  His congregation moved earlier this year from their long-term home across from Findlay Market and when I went out to get a tour last spring, I couldn’t figure out how the modest church I used to attend was going to raise the funds necessary to refurbish such an ambitious facility (complete with dilapidated tennis courts, basketball courts and crumbling pool) – a facility that needed everything, up to and including a kitchen sink as all the pipes in that area of the facility were missing.  

Oasis River Trail.  Wasson Way Trail.  Ohio River Trail West,  Mill Creek Valley Trail.  My mouth waters when I dream of a city connected by dedicated bike infrastructure – but why is the responsibility for construction and oversight being moved from the established expertise of the Department of Transportation to the Park Department with absolutely no experience in this area whatsoever????  Park folks are bloody geniuses when it comes to green space, but transportation is transportation and highly specialized.

For as long as I can remember – and my mother started the Park Board Volunteers in the mid-70s when city money was so tight she decided to drive our family station wagon up onto Fountain Square and plant the empty flower beds herself  – the Park Department has never had enough money to maintain the parks we already own.  But if this passes, five million bucks a year in tax revenues is apparently enough to add bunches of brand new ones in College Hill, Pendleton, the former Mercy complex now being referred to as Oskamp Park, and some kind of green space around the Westwood Town Hall.  Yes, Westwood Town Hall is now going to be designated a park.

And I don’t even know what to say about James Brown’s dilapidated former recording studio.  According to what definition does this have anything whatsoever to do with anything the Park Board should be doing?  Why is the city involved in this project at all?  

king_records-2

Does this look like a park to you?

At least Lytle Park is an actual, existing park.  But damn.  The only reason I didn’t make a bigger stink about John Barrett getting private sessions with the park design team for the public land smack dab in the middle of his company’s hotels and office complexes was because it was repeatedly suggested by very reliable sources that Western & Southern would be paying for the upgrades.  Now it turns out middle class property owners are also expected to foot the bill for Mr. Barrett’s preferences.  

So if your neighborhood is going to be a beneficiary of Mr. Cranley’s tax levy windfall, I get which way the wind is blowing.  But if you live in one of the other neighborhoods, the unlucky ones, it looks like you can forget about getting anything nice for a long, long time to come because this money has already been promised and then some.   Take a careful look at the OTHER neighborhoods, the very, very long list of neighborhoods that – according to Mayor Cranley – won’t be getting much from raising the taxes on their homes:  

Avondale

Bond Hill

California

Columbia Tusculum

Corryville

East End

East Price Hill

East Walnut Hills

English Woods

Fay Apartments

Hartwell

The Heights

Hyde Park

Kennedy Heights

Linwood

Lower Price Hill

Madisonville

Millvale

Mt. Adams

Mt. Lookout

Mt. Washington

North Avondale

North Fairmount

Northside

Oakley

Paddock Hills

Pleasant Ridge

Queensgate

Riverside

Sayler Park

South Cumminsville

South Fairmount

Spring Grove Village

Walnut Hills

West End

West Price Hill

Winton Hills

Where do YOU live?  If you’re on the unlucky list, you better get out and vote.

Mabley Place: what a win for a rookie in real estate

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.

What’s Western & Southern Putting into the Lytle Park Public-Private Partnership?

Excuse me.  I’m a little confused.

At the end of June Mayor Cranley announced his plan to put an initiative on the ballot to increase property taxes for dedicated parks’ funding.  The list of projects he picked raised lots of questions, but one entry was especially troubling.

The reason I am confused is because I just recently submitted a public records request for the estimated costs of the renovation of the park in front of my home.  My friend, Steve Schuckman of the Park Department, was very helpful and got them for me right away.

2015-02-11-HN-MP Update_Cost Estimate (2)-page-001 2015-02-11-HN-MP Update_Cost Estimate (2)-page-002As you can see, total estimated costs for renovation are slightly under $6,000,000.

The Ohio Department of Transportation is paying $1,000,000 to reconstruct the portion of the park being torn up to install new ventilation fans in the I-71 tunnel.  Mayor Cranley’s property tax increase is intended to contribute another $5,000,000.

What I’m missing in this Mayor-branded public-private partnership is the private part of the equation.  Where the heck is Western & Southern’s contribution and why are we are giving them naming rights like it’s a tennis tournament?  I understand very clearly that John Barrett met regularly with Park Department design staff to cover such details as what shape of the sidewalk he would prefer.  But I don’t understand what this city is getting in return and why Western & Southern gets such preferential treatment in private meetings that the public cannot attend.

Cincinnati’s negotiating skills with the corporate community could stand a little improvement, don’t you think?  It’s like we’re the 90 lb. weakling at the beach with Charles Atlas kicking sand in our face.

What's Western & Southern Putting into the Lytle Park Public-Private Partnership?

Excuse me.  I’m a little confused.

At the end of June Mayor Cranley announced his plan to put an initiative on the ballot to increase property taxes for dedicated parks’ funding.  The list of projects he picked raised lots of questions, but one entry was especially troubling.

The reason I am confused is because I just recently submitted a public records request for the estimated costs of the renovation of the park in front of my home.  My friend, Steve Schuckman of the Park Department, was very helpful and got them for me right away.

2015-02-11-HN-MP Update_Cost Estimate (2)-page-001 2015-02-11-HN-MP Update_Cost Estimate (2)-page-002As you can see, total estimated costs for renovation are slightly under $6,000,000.

The Ohio Department of Transportation is paying $1,000,000 to reconstruct the portion of the park being torn up to install new ventilation fans in the I-71 tunnel.  Mayor Cranley’s property tax increase is intended to contribute another $5,000,000.

What I’m missing in this Mayor-branded public-private partnership is the private part of the equation.  Where the heck is Western & Southern’s contribution and why are we are giving them naming rights like it’s a tennis tournament?  I understand very clearly that John Barrett met regularly with Park Department design staff to cover such details as what shape of the sidewalk he would prefer.  But I don’t understand what this city is getting in return and why Western & Southern gets such preferential treatment in private meetings that the public cannot attend.

Cincinnati’s negotiating skills with the corporate community could stand a little improvement, don’t you think?  It’s like we’re the 90 lb. weakling at the beach with Charles Atlas kicking sand in our face.

Hey, Everybody – John Cranley wrote me an email!

Dear Ms. Holwadel:

Thank you for writing me about the Oakley Station Parking Garage.  I have received a few emails on this subject and I’d like to take a moment to clear up some misconceptions about the project and share with you why I support it. . . .The garage is a 383-space garage and will cost $6.2 million to construct. The developer, Vandercar Holdings, is contributing the land, valued at $700,000.  The developer will have an option to purchase the garage from the City for the cost of construction, less depreciation. The developer will lease and manage the garage for 35 years and has the option to purchase the garage at the end of the 35-year term for $1, when it is fully depreciated.

That’s true, Mayor, except that the land has to be in the city’s name or it can’t qualify for the 35-year property tax-exemption that comes with Tax-Increment Financing, tax payments that would usually be made to fund basic services but will now be used to pay for this garage.  What’s the dollar value of the tax exemption to the developer over 35 years?  The city doesn’t get any benefits from depreciation like a for-profit company would since Cincinnati doesn’t pay any taxes.  Do our buildings really only have a 35-year usable life?  Such a waste of resources, both financial and environmental, is sad.

It’s also interesting that if the building is ever sold, it’s my understanding that the developer receives 100% of the proceeds, including the garage – and holding periods usually end up being much shorter than that stated in the master lease agreement. Even if the property is sold, those tax benefits will be passed to the new owner for the entire period.

I support this project for one big reason: It will create jobs and economic growth in Oakley. 

But, Mayor, according to the city’s own ordinance this particular office building will not result in ANY new jobs to the city.  

F. Developer intends to lease the Private Improvements to Community Insurance Company (the “Tenant”) for a term of not less than 10 years and 6 months, which Developer represents will bring approximately 400 jobs to the building site of which 0 shall be new jobs to the city and 400 shall be jobs retained from the Tenant’s prior location within the city.

The city projects income taxes from the temporary construction jobs to be $84,000.   Building a $6.9 million garage in order to generate $84,000 in new income taxes to the city – wow, I don’t mean to be critical – but can’t we do any better than that?????

According to an economic impact study done by the University of Cincinnati, development of the Anthem office building and parking garage will support 82 new jobs during construction, and Anthem employees will bring annual purchasing power of $4 million to area restaurants and retail. Through our agreement, Anthem must retain at least 400 jobs in the City with $15 million in payroll. Construction of the office building is expected to create 111 construction jobs with an annual payroll of $4 million during construction.

Mayor Cranley, would you mind if I asked who paid for that economic impact study? Usually it’s the for-profit developer.  Haven’t we had a few problems in the past with overly optimistic projections?  

As far as the agreement with Anthem is concerned, you must be referring to the Property Investment Reimbursement Agreement the city signed in 2013 (Ordinance 206-2013) to fix up their current building at 1351 William Howard Taft.  We gave them a forgivable loan of $300,000 outright.  And another $1,250,000 over the next 5 years if they retained 325 jobs and created 75 new ones. This agreement didn’t have anything to do with the new building, but I can see where you might get confused.  It’s hard to keep all these job-creating deals straight isn’t it? 75 jobs cost us $1,550,000 or $20,666 per job. It will take more than 26 years to break even on that investment. (the city assumes an average salary of $37,500 and we tax at 2.1%)

Again, thank you for writing me about this important issue.  I always enjoy hearing from thoughtful, engaged citizens like you.  Please feel free to contact my office if I may ever be of further assistance.

Sincerely,

John Cranley

Mayor, City of Cincinnati

Thanks for taking time to write, John.  But while all the talk about jobs always sounds great, the reality is that we can’t afford to give away more than we can ever hope to take-in.  That’s Economics 101.  Current policy only makes sense for developers who build big buildings and tenants savvy enough to sign the taxpayer-subsidized lease.