Tag Archives: Port Authority of Greater Cincinnati

Another Score for Former Bengal, Chinedum Ndukwe

At the end of 2014 former reserve defensive back and major contributor to the Cranley campaign, Chinedum Ndukwe, locked in a humongous profit on the Mabley Parking Garage. New to real estate development, Nedu was brought in at the eleventh hour (December of 2013) to partner with Jake Warm of Warm Construction.  They bought Tower Place Mall from the city for $1 and the Port Authority wrote off over $1,000,000 in back property taxes to make the deal work.  Shortly after construction was completed less than a year later – touchdown! – the garage sold to a newly-created real estate investment trust specializing in urban parking facilities that was being marketed on-line to middle-class investors.

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21 W. Court St.

Now Nedu’s at it again!  On May 20, 2015 his company, Kingsley Property Development, purchased a 23,000 square foot building at 21 W. Court St. for $181,000.  He sold it 4 months later to Towne Properties for $400,000 – a 121% profit (or 362% annualized).  Towne Properties intends to turn it into 6 luxury condominiums.

I know, I know.  This measly, little $219,000 profit is peanuts compared to the Mabley Garage deal. But all the same, not half-bad for a newbie.

Now we’ll just have to wait to see if Ndukwe’s golden touch continues with his USquare Hotel deal with NAI Bergman and Hotel Development Services purchased in November of 2014 near UC.  All I know is this guy seems to have what it takes – whatever that is.

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.

Should government speculate in luxury shopping malls?

The conservative right has done a great job of selling America the idea that big government is bad and  a free-market economy best left unfettered by pesky government interference.  Over and over we hear how taxes are too high and the system full of waste.

Isn’t it odd that this same principle doesn’t apply to commercial real estate development, where the biggest public dollars are involved?  When for-profit corporations build big buildings, then the government is smarter than the free market.  Government intervention is not only encouraged to over-ride current realities of supply and demand, cities are routinely blackmailed by the for-profit sector as they negotiate richer and richer deals at taxpayer expense, our corporate “citizens” suggesting they can get better deals outside city limits if municipalities don’t pay up.

These days Cincinnati is turning the entire decision-making process over to the corporate sector:  3CDC, the Port Authority, and REDI, their governing boards almost entirely composed of corporate executives with no possibility for input from the public.   ALL deals are perceived as desirable, with no critical assessments beyond available financing.   And it doesn’t seem to matter that government agencies have crappy track records in terms of investment decisions since nobody ever bothers to measure our returns. We’re apparently mesmerized by the soothing repetition of the “job creation” mantra, that greatest trickle-down hoax of them all.

Kenwood_Towne_Place-304

Perhaps my favorite example of bad real estate investments by a public agency is the Port Authority’s involvement in Kenwood Towne Place, now called the Kenwood Collection, a development in a “flourishing luxury retail corridor.”* The Port Authority owns the 2,500-space public parking garage financed with bonds that mature in 2039. Since parking is free at the mall, it’s hard to understand exactly how the revenue is generated to pay off the debt – but it surely hasn’t been easy as the development drowned under a sea of liens filed by subcontractors who were never paid, many of them smaller minority-owned companies trying to benefit from the Port’s Economic Inclusion Policy. The FBI was involved.  There was a criminal investigation as well as civil litigation.  It’s been a mess.

Why was government ever involved in a $30,000,000 parking garage in a “flourishing luxury retail corridor”? When should public servants expect middle-class taxpayers to shoulder this kind of financial risk with no possibility of personal reward?  While there’s a clear public benefit to fix  environmental brown-fields and actual blight, using government intervention to provide more covered parking so shoppers don’t have to get wet on their way to Crate & Barrel is absolutely absurd.

According to the Constitution, government was established for the purposes of unity, justice, domestic tranquility, defense, promotion of the general welfare of the citizens and securing liberty for all. It doesn’t say a damn thing about making the rich richer and convenient parking at fancy shopping malls.

* “flourishing luxury retail corridor” is the term used on the Port Authority’s website – though it is currently difficult to locate information on the Kenwood Project.  The “Our Projects” tab is now limited to deals done within the last ten years in the Central Business District.

It’s that time of the month, Port Authority Citizen’s Brigade. (and a bit about failure)

If you have been reading cincyopolis for awhile, you know I like to measure things.  So when I was getting ready for the Cincyopolis Survived! party to mark the end of the first year, I started a list of good things that have happened during this grand experiment in civic conversation: 138 posts, 1277 regular followers, 555 “likes” on the Facebook page, a Sunday cover story in the Enquirer about the use of economic development incentives in Cincinnati, City Council’s call for a full-review of incentives, 3 guest editorials in the Enquirer, 8 guest posts from an amazing range of expertise, interviews with some of Cincinnati’s most visible leaders, and a requirement for public hearings added to new Tax Increment Financing projects voted on last December.

But in order to improve results, evaluation also has to include a clear-eyed look at failures as well, those areas where improvement or reassessment of technique is most needed.  There’s only one area where efforts have been particularly disappointing, the spot where I’ve put by far the most emphasis: transparency at the Port Authority.  Instead of improving interaction with this public agency, the relationship between the board and citizens has actually gotten worse over the past year.  (well – maybe not worse – as there was no relationship prior to the formation of cincyopolis – but it sure hasn’t gotten any better)

Two of the four board meetings (at the Taft Center) since we started attending in February were cancelled.  The executive director has twice fallen back on legality as justification for decisions to limit public access to information.  Meetings we do attend start with a reminder that the public is not allowed to comment at any time.  And silliest of all – during the strategic planning session last month, we were told we were not allowed to sit at the observation table – even though it remained empty through-out the entire meeting  – and were relegated to chairs scrunched along the wall in the far corner of the spacious room.

This should not be an adversarial situation.  The Port Authority is now and always has been a public agency subject to state Sunshine laws.  This is the public’s business and we have every right to be there, listening, learning and asking questions.

Please come if you can.  It’s the last meeting before summer break and very important to remind the 9 members of the board and the executive director that we care, that we are not going away, and that we want to be an informed part of these important decisions that impact our community for generations and involve big dollars and risk.

Though regularly scheduled for the 2nd Wednesday of the month, this month’s meeting has been moved to Thursday morning, June 11 at 8 a.m., at the Taft Center on the 2nd floor of the atrium in the Westin Hotel on 5th St.

Failure is only absolute when we stop trying.

Note:  I just remembered another no-progress area:  I haven’t gotten Dusty Rhodes to give any serious consideration to inconsistencies in property valuations.  I haven’t given up there either. 

It's that time of the month, Port Authority Citizen's Brigade. (and a bit about failure)

If you have been reading cincyopolis for awhile, you know I like to measure things.  So when I was getting ready for the Cincyopolis Survived! party to mark the end of the first year, I started a list of good things that have happened during this grand experiment in civic conversation: 138 posts, 1277 regular followers, 555 “likes” on the Facebook page, a Sunday cover story in the Enquirer about the use of economic development incentives in Cincinnati, City Council’s call for a full-review of incentives, 3 guest editorials in the Enquirer, 8 guest posts from an amazing range of expertise, interviews with some of Cincinnati’s most visible leaders, and a requirement for public hearings added to new Tax Increment Financing projects voted on last December.

But in order to improve results, evaluation also has to include a clear-eyed look at failures as well, those areas where improvement or reassessment of technique is most needed.  There’s only one area where efforts have been particularly disappointing, the spot where I’ve put by far the most emphasis: transparency at the Port Authority.  Instead of improving interaction with this public agency, the relationship between the board and citizens has actually gotten worse over the past year.  (well – maybe not worse – as there was no relationship prior to the formation of cincyopolis – but it sure hasn’t gotten any better)

Two of the four board meetings (at the Taft Center) since we started attending in February were cancelled.  The executive director has twice fallen back on legality as justification for decisions to limit public access to information.  Meetings we do attend start with a reminder that the public is not allowed to comment at any time.  And silliest of all – during the strategic planning session last month, we were told we were not allowed to sit at the observation table – even though it remained empty through-out the entire meeting  – and were relegated to chairs scrunched along the wall in the far corner of the spacious room.

This should not be an adversarial situation.  The Port Authority is now and always has been a public agency subject to state Sunshine laws.  This is the public’s business and we have every right to be there, listening, learning and asking questions.

Please come if you can.  It’s the last meeting before summer break and very important to remind the 9 members of the board and the executive director that we care, that we are not going away, and that we want to be an informed part of these important decisions that impact our community for generations and involve big dollars and risk.

Though regularly scheduled for the 2nd Wednesday of the month, this month’s meeting has been moved to Thursday morning, June 11 at 8 a.m., at the Taft Center on the 2nd floor of the atrium in the Westin Hotel on 5th St.

Failure is only absolute when we stop trying.

Note:  I just remembered another no-progress area:  I haven’t gotten Dusty Rhodes to give any serious consideration to inconsistencies in property valuations.  I haven’t given up there either. 

Port Authority Citizen Brigade: You’ve got 3 hours to RSVP.

Yesterday I got an email from the Port Authority about the Special Meeting on Monday, their second strategic planning session.  It runs from 1-5 pm at the GE Aviation Learning Centre.  They’ve cancelled the regular meeting downtown normally held on the third Wednesday of the month.

If you want to go to the special meeting you must do the following:

1. RSVP to jhall@cincinnatiport.org by 3pm today.  Which means you have to have signed-up for the email list in order to have received notification at all.

2. Bring a picture ID for admittance.

3.  Have a car.  I just called Metro and they confirmed that they do not offer service anywhere close to this location.  The best they could do was get me to the other side of the highway where I would have to take a cab as it was not walk-able.

I understand that the board members of the Port Authority are probably not excluding the public from their meetings intentionally.  These events are scheduled according to the needs of the 9 politically-appointed members of this powerful agency.  But in light of growing public interest about development matters in general and Port Authority operations specifically, this is extraordinarily insensitive behavior at best.

I started asking citizens to go with me to the monthly board meetings in February.  4 of us attended the 35 minute presentation.

The March meeting was cancelled.

12 Citizens got up in time to attend the 8 am meeting in April, not counting Enquirer reporter Jason Williams who had to sit on the floor when he arrived a few minutes late.

Now they’ve cancelled the May meeting and rolled it into a 4 hour marathon 15 miles from their normal location without access to any public transportation, are requiring pre-registration and a picture ID to get into a private facility.

While the Port Authority has complied with the letter of the Ohio Sunshine law regarding public meetings, again I have to repeat to the individuals who have voluntarily undertaken a fiduciary responsibility to represent the public interest:  Legal doesn’t make it right.

Port Authority Citizen Brigade: You've got 3 hours to RSVP.

Yesterday I got an email from the Port Authority about the Special Meeting on Monday, their second strategic planning session.  It runs from 1-5 pm at the GE Aviation Learning Centre.  They’ve cancelled the regular meeting downtown normally held on the third Wednesday of the month.

If you want to go to the special meeting you must do the following:

1. RSVP to jhall@cincinnatiport.org by 3pm today.  Which means you have to have signed-up for the email list in order to have received notification at all.

2. Bring a picture ID for admittance.

3.  Have a car.  I just called Metro and they confirmed that they do not offer service anywhere close to this location.  The best they could do was get me to the other side of the highway where I would have to take a cab as it was not walk-able.

I understand that the board members of the Port Authority are probably not excluding the public from their meetings intentionally.  These events are scheduled according to the needs of the 9 politically-appointed members of this powerful agency.  But in light of growing public interest about development matters in general and Port Authority operations specifically, this is extraordinarily insensitive behavior at best.

I started asking citizens to go with me to the monthly board meetings in February.  4 of us attended the 35 minute presentation.

The March meeting was cancelled.

12 Citizens got up in time to attend the 8 am meeting in April, not counting Enquirer reporter Jason Williams who had to sit on the floor when he arrived a few minutes late.

Now they’ve cancelled the May meeting and rolled it into a 4 hour marathon 15 miles from their normal location without access to any public transportation, are requiring pre-registration and a picture ID to get into a private facility.

While the Port Authority has complied with the letter of the Ohio Sunshine law regarding public meetings, again I have to repeat to the individuals who have voluntarily undertaken a fiduciary responsibility to represent the public interest:  Legal doesn’t make it right.

One Small Step for Cincyopolis – one giant leap for transparency

Yesterday’s letter from Tom Stapleton, Senior Vice President of Eagle Realty Group, marks the beginning of a new era in Cincinnati.  The tone was co-operative, the information, a helpful and specific record of the logic behind public subsidy on one of the biggest for-profit projects Cincinnati has ever under-taken.  My only frustration is that it took 9 months of relentless arm-twisting to get to these numbers in a format that is easy to understand and can be shared.

Yet Tom and his boss, Mario San Marco, would tell you that those 9 months were completely unnecessary.  “Why didn’t you just ask us?” Mario said during our conversation last week. And maybe he’s right.  Maybe I should have just picked-up the phone and asked.

Except for two things:

(1) There’s a steep learning curve involved in commercial real estate development, especially the financing part of it – and in the beginning I didn’t even know what I didn’t know, much less what questions I needed to ask.

(2) You don’t really want to ask the people who are making the money off the project for independent and complete analysis of their building.  I thought the government entities that facilitated this mega-Tax-Increment-Financing Project should – in a perfect world – be the keepers of record and my best source of verifiable data.

But the world is not perfect, Citizens. The only page on the internet dedicated to public involvement on Great American Tower is on the Port Authority web site, a couple of paragraphs that are more public relations material than accurate and complete financial data with measurable benefit-expectations clearly spelled-out.  When I pushed for more information about the “whys” of city involvement early on, one of the most knowledgeable public employees associated with Queen City  Square admitted, “We did it because City Hall told us to do it and you’ll have a hard time finding anybody there to talk to since those people are all gone.”  This is a building that opened 4 years ago – not 30 – and we should have a written, on-line record accessible to the public in a format that is easy to understand – not 50,000 pages of documents in boxes in storage.

Let us rejoice, Cincinnati.  In the scope of world problems, this one is relatively easy to solve.  It’s not poverty.  It’s not the Middle East or global warming.  This is numbers on a page and all it takes to fix it is commitment and some focus.  We’ve even got a model to use – not a perfect model – but a darn good start:  3CDC dedicates a page to every single one of their projects complete with financing details and links to informational videos for people who want to learn more.  (Wouldn’t it be nice if they could add information about how these deals impact property taxes?)

Screenshot 2015-04-09 at 8.55.38 AM

Tom and Mario, I have a lot to learn about how a city gets built – but here’s one thing I know for absolute sure:  If we discipline ourselves to do our homework and ask the important questions before we make investments that will be with us for generations, and if we put our assumptions out in public where everybody can see what we are doing and why we are doing it – we will make better decisions.  I learned that as a financial consultant and the principles of good investment are the same for families as they are for cities.  Public scrutiny is not a cumbersome evil to be avoided.  It’s a crucial step in the decision making process that will help politicians, public administrators and – yes!  – even private, for-profit developers build a really, really great city where everybody wants to live.

April 8, 8 a.m.: The Power to Bear Witness

The other day I was on a bench in Lytle Park reading Rules for Radicals, a practical primer for realistic radicals, when somebody shouted my name.

It was Susan Thomas, Vice President of Finance for the Port Authority of Greater Cincinnati. Working at the office on a Saturday, she was out getting some exercise, enjoying the sunshine for a few minutes.

While it’s not unusual for me to run into acquaintances in Cincinnati, Susan’s simple gesture meant a lot to me.  I’ve asked critical questions on this blog about how the Port operates, questions that made it sometimes seem as though we are on opposing sides.  So, it was nice of her to treat me like a human instead of an issue.

We talked for a few minutes about the Port’s 4-hour strategic planning session we’d both attended a few days earlier.  I mentioned I hadn’t decided yet if I was going to go to their next board meeting on Wednesday morning.

She assured me I wouldn’t miss much if I wasn’t there.  “The only vote is on my Fountain Square South agreement.”  Which means getting up and dressed at an insane hour to be at the Taft Center for another 34-minute formality.

Sometimes Cincyopolis readers who share my concerns about government transparency and the integrity of our political process will ask how they can help.  “Let me know if I can make introductions for you,” a friend of my brother offered recently.  An accomplished businessman in his fifties with a very busy calendar, he made it clear that he didn’t have time for much else.  “I took a class on government in high school where they had us do all that stuff at City Hall,” he told me.  “I’ve done it already.”

Public opinion polls consistently reveal widespread disgust with our government in the United States.  We blame the dysfunction on partisan politics, Supreme Court decisions, how campaigns are funded, big corporations, the legal system and lobbyists.  But maybe it would be more productive for average citizens to stop pointing fingers and look at how we’ve contributed to the current state of affairs.  Have we abdicated our own responsibility in the decision-making process?

Democracy is a lot of work.  A lot of hard, tedious, boring, inconvenient, monotonous public meetings listening to what other people think.  The work of showing-up, doing homework and thinking about complicated problems with no easy answers.  Good government is not a class you take in high school and say, “Done.”  It’s more than voting once a year or posting comments on Facebook.  Writing checks to candidates is not to be confused with good citizenship. If we don’t like the government we’ve got, maybe it’s our own damn fault.

So, yes, Susan, I’m going to see you there at the Port Authority board meeting on Wednesday.   I’d rather sleep-in, stay in my pajamas until lunch, but I’m going to go.  Because the right to bear witness is not to be taken lightly.   It is a powerful and radical act.  When we show up for the democratic process we remind our representatives in a very tangible way that they serve for the entire community, not just their little piece of it, that we aren’t going away, that we will be back next month and the month after that.  I’m going to go because there’s nothing I can do that’s more important and that’s the way change happens.

You Can Sleep-in Tomorrow, Port Authority Citizens’ Brigade

Luckily I stopped by the Port Authority’s booth at the Cincinnati Neighborhood Summit on Saturday. As soon as I spotted their logo on the banner I burst out laughing, explaining to the two professional-looking representatives behind their table that I had a history with the organization.

“You’re Kathy,” Gail guessed.  (In all fairness, I was wearing a plastic-encased name badge around my neck.  How many ‘Kathy’s could there be?)

“Did anybody tell you we canceled the board meeting for this month?”  she asked after exchanging initial pleasantries. “Susan said she’d let you know.”

Let’s stop here to review the facts:

1.  The Port Authority as an organization is keenly aware of my concerns regarding their interpretation of transparency and my call for citizens to attend board meetings.

2.  An extraordinarily powerful agency with the right to levy taxes and form a police force, issue bonds and own property, they schedule ten meetings a year that are open to the public.

3.  Last month’s meeting – attended by 6 members of the public, an event so rare the Chair acknowledged each one of us by name – was a whopping total of 32 minutes long.

4.  There are 3 new members on the 9 member board:  (1) Mario San Marco of Eagle Realty (Western & Southern) – the developer of the biggest project ever undertaken by the Port, (2) former Mayor Charlie Luken,  – both appointed by Mayor Cranley – and the Hamilton County Commissioner’s appointment, Bobby Fisher, Chairman and Chief Executive Officer of Washing Systems LLC, a leading provider of specialty chemicals and related products to the industrial uniform and linen rental markets.  I was particularly excited about starting to get to know Mr. Fisher.

5.Last month the Port announced the approval of their application to increase the area of their jurisdiction to include Northern Kentucky, more than doubling the size of the area they cover.  Every elected official in both states – governors, senators, county commissioners – all of them agree enthusiastically with Mayor John Cranley that: “This designation is great news for Cincinnati and our entire region. It should help us boost river commerce and increase our area’s marketing clout. It also will better reflect our region’s true impact as an inland river port.”  Maybe I’m slow-witted, but I still don’t understand why a perception of more freight on our river is such a big deal and I am eager to learn more about the real purpose behind this change.

6.  Last month the Port announced they are starting a strategic planning process that will last through June.  I was hoping to hear more about that, to ask board members after the meeting how that planning will address citizen concerns about transparency.  (Members of the public are not permitted to participate in the board meetings, but the Chair was available to talk afterwards.)

7.  Another interested citizen who stopped by the booth was informed that the reason for the cancellation was because the Port Authority staff had a lot going on and was “too busy.”

In answer to your question, Gail, no, nobody got in touch with me.  There was no public announcement.  The date for the next board meeting was just quietly changed without any fanfare on the bottom left hand corner of the home page of the Port’s website.

Port of Greater Cincinnati, Development Authority, this is not transparency. This is the theater of transparency.  Whatever is being decided by the governing body of this public agency regarding our public dollars, it is happening off-the-record and out-of-sight of the taxpayers.  Citizens, it is more important than ever that you mark your calendars for April 8 at the ungodly hour of 8 am and get yourself down to the Taft Center at Fountain Square, 426 Walnut St. (where free coffee is served).  Democracy is depending on you.