The City of Toledo is considering using tax dollars to guarantee loans on the old Fiberglass Tower office building in downtown Toledo.
The total obligation we'd be 'on the hook' for if the project isn't as successful as the developers hope is a whopping $13 million dollars - but only if the project doesn't go as planned.
Well, that's the same thing we've heard for years now on various other projects like the Commodore Perry building, the Hillcrest, Museum Place, the Steam Plant, and the Marina District.
The City of Toledo is still paying for too many projects that were touted in the same way - you only have to pay if we can't. In fact, the amount we're paying is right around $2 million a year. (See page 243 of the most recent budget available on line for Toledo - which is only the 2009 budget, by the way.)
And we've been paying these amounts for years.
So what does that mean to the average Toledoan? Well, since those payments come out of the Capital Improvement budget (CIP), it means less money for statutory requirements like roads (which are in desperate need of attention) and efficiency enhancements (like a financial computer system that might actually be able to produce a current budget, including current expenditures, to be put on line so that in June of 2010, we're not looking at one produced in the last quarter of 2008)!
Now, city officials and many council members will tell us that this deal is different (isn't it always?) because if the developers default on their loans, the city will end up owning the building.
And what, exactly, are we going to do with a failed building? If the private developer won't be able to make his project work, what in the world makes these politicians think they or the city staff will be successful? Because they're so much smarter??? It is to laugh!
Of course, since the debt obligation would only happen in the last 13 years of the loan term, many of these same politicians might not be around, so why should they worry?
You'll notice a lot of sarcasm in this post. I'm just so frustrated that in these dire financial times with the city looking at a deficit of millions of dollars for the 2011 budget, with increased costs for union contracts that they've negotiated, with declining population and loss of businesses, with mortgage foreclosures still at record levels - where in the world do they think they'll get the money to cover a new debt?????
They're trying to justify their desire to obligate the city to more debt by calling it 'economic development.' Well, it's only economic development if it is successful and making taxpayers pay for the lack of success does not qualify as 'economic development.'
Council should just say no! While they may 'hope' that the project will work, they should not risk public tax dollars for a private development - and certainly not when their track record on such 'investments' is so horrible.