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.