Despite blackmail threat, Toledo should 'just say no' to bailing out North Towne Mall

First, my apologies for not posting earlier, but we were deer hunting (bow) and I have very limited Internet access. This was my third time hunting and I did get a very nice doe with what Sam describes as an excellent shot. Now, back to the news of the day....

I've previously shared with you the plans for demolishing North Towne Mall. Since then, more details have been revealed.

Under the plan, the current owners would pay back taxes (around $200,000) and fees of $70,000 for utilities and other costs incurred by the city. Upon payment, ownership of the property would transfer to the city of Toledo which would then borrow around $700,000 from the federal brown fields revolving loan fund (from the EPA) and pull around $100,000 from the Capital Improvement Plan fund (CIP) to demolish the buildings. The Super Fitness portion would remain.

A new detail revealed this past week is that the current owners would have the ability to repurchase the property for the cost of the demolition, or they could benefit from the sale of the property. According to some reports, that share of the sale could be as much as $3.4 million, if the city gets the highest potential price.

This is a "developer bailout," as Councilman Adam Martinez correctly called it.

Why in the world would the the city bail out a developer? Well, as Mayor Mike Bell explains, because it's a nuisance. But then there is the dirty little fact that the current owners might have the city over a barrel. As the local paper is reporting:

Not that the city has much choice in the matter, according to Toledo attorney Matthew Fischer, who is representing the owners in negotiations with the city.

If the purchase and demolition deal does not go through, the current owners will drag out attempts to mandate demolition of the property through the court system for another two to three years, he said.

Sounds like blackmail to me - if Toledo doesn't bail out the current owners, they'll just drag out the court process several more years. In fact, the negotiations over this deal have been going on for about six months and I understand the owners wanted much more than this.

Of course, everyone 'believes' that they'll be able to sell the property 'very quickly.' But we have a prime example of why this 'belief' is nothing upon which to borrow and spend.

In 2009, city officials said the same thing about the old Southwyck Mall and nearly three years later, it's still empty. If anyone was interested in that much land to develop, they'd be looking at the Southwyck property, not waiting for the city to spend taxpayer money to clear another one.

So, despite the 'firm beliefs' of elected officials, there are no guarantees that the property won't continue to sit, cleared or not. And many Toledoans would just as soon let it sit as is rather than risk taxpayer dollars.

If the property isn't sold by 2012, the taxpayers of the city will be on the hook for repaying the borrowed federal funds. And that doesn't even get into the use of dwindling CIP funds.

For several years now, the city (with permission from the voters in a ballot issue) has been transferring money from the CIP fund into the general fund to cover every day expenses. The 2012 budget calls for a transfer of $11 million, though 2012 is the last year the city can do so unless it goes back to the voters with another proposal.

As I've previously said about raiding the CIP:

If we keep raiding our capital budget, we won't have any money for structural items like roads, which are a major expenditure out of that fund.

If my addition is correct, over the last several years we've transferred over $50 million out of the CIP and into the general fund. Can you imagine how much better our roads would be if we'd spent that money on repairing potholes and repaving rather than using it to balance the yearly budget???

We don't need to take even more money, even $100,000, from the CIP.

It's clear to see that this is a great deal for the current owners: they get the buildings demolished, the property cleared and, the longer it takes to sell the property, the more money they get.

And who, in their right mind, sets a sales price that increases the longer it remains unsold?

Yes, you heard that correctly. If the property is sold in 2012, the price per acre would be $55,000. If they sell the property in 2013, the price goes up to $57,500 per acre. And if they sell it in 2014, the price goes up again to $60,000.

And this makes sense to the city?!? This definitely qualifies for 'stuck-on-stupid' designation. By the way, they current value of the property is about $22,000 according to the Auditor's AREIS system.

Here's the thing, the longer the property sits, the lower the value will be, resulting, eventually, in a price that a private developer will find attractive. Or, if they don't pay their property taxes, the property should go to a Sheriff's sale over delinquent taxes. That, too, would result in a price that a private developer will find attractive and the property with change hands without the involvement of the City of Toledo - and, more importantly, without the involvement of tax dollars, borrowing and spending.

Thankfully, we have some members of city council who are opposed to this. Today, council will vote on the proposal. Let's just hope that more than half of them will 'just say no' to bailing out North Towne Mall.

UPDATE:

I listened to Tom Crothers on WSPD this morning when he called in to talk about this issue. He said a couple of things that don't make any sense:

* that no taxpayer money was involved - that the funds were coming in a grant from the federal government through the state and were in a revolving loan fund under the control of the city. Apparently he doesn't understand that the federal government gets its money from....TAXPAYERS!

* he said the loan doesn't need to be repaid. But he then said that the fund was repaid upon the sale of the property. Apparently, he doesn't understand the term "repaid." I understand that the fund doesn't need to be repaid to the federal government, but the fund will need to be repaid - one way or the other. If the property is never sold, the funds will still need to be repaid to the revolving loan fund at some point in time.

* he said that tearing down the buildings will help surrounding properties in the area and lead to their growth and expansion. Morning show host Fred Lefebvre then asked him to name one company at or near Southwyck that expanded or grew as a result of tearing down the Southwyck Mall. After saying that was a really good question, he couldn't name a single one - and admitted so. This proves that his claim was bogus. Apparently, he was willing to make a claim he knew not to be true, never expecting to be called on it.

Basically, he made a bunch of bogus claims as justification for the city to take this course of action. His interview alone is reason enough for city council members to 'just say no!'

Pols answers to generic questions often provide great insight

I don't normally read political articles in the Toledo City Paper - for a variety of reasons - but Lisa Renee at Glass City Jungle had a post that caught my attention:

Curious as to what community members like University of Toledo President Dr. Lloyd Jacobs or Congresswoman Marcy Kaptur or Lucas County Treasurer Wade Kapszukiewicz or several others have to say about the future of Toledo? Are we there yet? in the Toledo City Paper will tell you.

My first reaction was rather cynical: Why would I care what Kaptur and Kapszukiewicz have to say about our future? They're part of the thinking that put us into the economic morass we're in today.

But the inclusion of Dr. Jacobs had me curious. So I headed over to the linked article to see who was asked to participate and what they had to say.

I hope you'll take the time to read all the commentary, though you could predict that Dr. Jacobs and other educators focus on education, the MetroParks director focuses on the MetroParks, the Arts Commission director focuses on art, etc... While their subject matter is predictable, they highlight various programs you may not be aware of.

However, the political perspectives had some surprises, particularly, Kaptur's.

Our challenge in manufacturing is to remain innovative in the auto sector. Frankly, I’d like to produce a Toledo truck or car. When our people created Jeep half a century ago, it became a world symbol. We didn’t import it. We built it. Our generation must remember our roots and build forward.

She'd like to produce a Toledo truck or car? Well, with the government ownership of the company that produces Jeep, I guess she can now say this.

"When our people created Jeep..." Does she mean Toledoans? Union members? Who are 'our people'? And I know that the Jeep was built here, but I would have thought it was 'created' in the engineering and design offices in Detroit.

The company, responding to market demand, created a vehicle whose success is world-reknown. That isn't possible today when this very same company is busy creating cars that conform to political wants and wishes, subsidized by tax dollars in order to ensure the political views. If Kaptur really wants 'our generation' to remember our roots, she needs to educate herself on the success of the free market and stop interfering in that process. That is what will help us 'build forward.'

But that's not all she's got to say:

The Southwyck area might be ideal for an indoor, modern equestrian show ring, drawing competitions from near and far. Lucas County alone has 5,000 horse owners. With Turnpike access, that location can accommodate traffic from across the Midwest and attract dollars to our region.

I couldn't help but immediately recall a person I met during my 2002 campaign for county commissioner. This gentlemen was frustrated over the lack of attention Northtowne Mall was getting versus Southwyck. His anger was clear in our discussion and then he said (paraphrased):

I've got an idea - with all the strip clubs and bars around here, why don't we make Northtowne into a red-light zone or district? We can move all the city's strip clubs and bars and other such establishments into this empty building. We'll build a wall around the perimeter and charge an entrance fee to fund the maintenance of the wall and the security. That way, the mall would at least be producing income and other taxes and we wouldn't have to look at it any more. Plus, tons of neighborhoods will be happy to have 'undesirable' businesses away from them.

Both this man and Kaptur have ideas for other people's property based upon their own interests. But the whole part about it being 'other people's property' seems to be missed by so many politicians in this area.

And while there may actually be some fraction of merit to turning Northtowne into a red-light zone - at least in terms of the economic input to the city and other government tax coffers, the profitability of an equestrian show ring is questionable, at best.

Just because Toledo has 5,000 horse owners doesn't mean that those 5,000 people will compete in equestrian shows - or that they will forgo whatever arrangements they currently have to suddenly utilize Marcy's horse center.

What market research has she done on the profitability of such centers? Has she analyzed this site and any potential center or compared it to the competition that exists across the state line - in rural areas more suitable to housing horses?

When the Lucas County Fair has its one week of activities, neighbors complain about the smell of the animals. While Kaptur is suggesting an indoor facility, does she not realize that smells travel whenever doors are opened and especially in the summer? How will the businesses and residents react to boarding stables across the street?

And don't think that boarding stables won't be needed. Most equestrian centers use the boarding of the horses as a primary source of income. They can't just be a place where people come to compete.

Lest you think this was just a whim, or Marcy talking about remote ideas, she suggested a horse farm in May when the demolition of the old Southwyck buildings began.

She then talks about one of her usual topics - locally grown produce - and says:

Let’s urge local restaraunteurs to turn some of their fantastic ethnic recipes into shelf/freezer ready products. If Betty’s Dressing and the peanut butter blossoms (cookies topped with a Hershey Kiss) were created in our area, what else is possible now?

Yes, you see, because if government doesn't encourage any of these "restaurateurs" (correct spelling), they won't come up with the idea on their own, even though Betty obviously did so without a politician instructing her.

Marcy is correct that there is potential here. But most of that potential is hampered by government through burdensome taxation, over-regulation and a myriad of complicated forms, rules and red-tape. If she really wants to help in this regard, maybe she could start by addressing the bureaucracies that apply to all instead of handing out other people's money as 'tax incentives' to just a few, favored supporters.

I'm glad the City Paper asked this question as it gives us some insight into what our politicians think. In Kaptur's case, she obviously thinks a horse farm and center in the middle of the city is not only a valid idea, but a good one as well. It just goes to show how out of touch she is with the free market, the interests of her constituents and the realities of what it takes to run a successful business under her form of governance.

Just remember this when it comes to voting in November.

Finkbeiner should be judged by the promises he made

If you read the headline of Sunday's Toledo Blade article on out-going mayor Carty Finkbeiner, you'd think that even his critics gave him praise on his terms of office.

After all, that's what the headline says: Finkbeiner's legacy: Even critics admit he made Toledo better.

The problem is, the only 'critic' they found was fellow Democrat Frank Szollosi, who didn't get mentioned until the 35th (yes, 35th!) paragraph. And, even then, gave no praise. The article states in paragraph 34:

Even his critics agree the city is, in some ways, a better place after his 12 years in office - the first eight of which were with Mr. Finkbeiner as Toledo's first modern strong mayor.

But they don't provide the name or quotes of any 'critic' who actually says this.

So is this editorializing? Wishful thinking? An attempt to 'spin' Carty's actions? Or is it bad editing, leaving out details/quotes the reporter included? You can decide on your own, especially in light of the more wide-spread reputation the paper is developing for disguising their opinions as news stories.

What is a more accurate reflection of Carty's term are his original campaign promises. Here are his promises from his campaign website (in italics), saved just for today, along with my comments on whether or not he actually achieved them:

"I will outline our mission and agenda:
Our mission
The Finkbeiner administration will unite and promote, in every way possible, a clean, green, and safe city with vibrant colors everywhere – a city that inspires our citizens to improve our neighborhoods, educate our children and create jobs that offer a future in their hometown.
To accomplish our mission, we will:
1. Work with the University of Toledo, Bowling Green State University, Medical University of Ohio and Owens Community College to develop a “technology corridor,” creating the jobs of the future.

* FAIL - Carty's administration did 'work' with these entities but there is no technology corridor as of his last day in office. These institutions of higher learning are working together more effectively without the mayor.

2. Develop the marina-housingrestaurant-entertainment project on the east side of the river that voters approved in September, 2001. The Marina District project will act as a complement to The Docks, which we built in 1995.

* FAIL: While the taxpayers did fund a road and street lights and some basic infrastructure, there is no vertical development and no private funding available for the housing/restaurant/entertainment portion of the Marina District. In fact, after 9 years, there is no one capable of putting forth the private sector support needed to actually bring this plan to fruition. While Larry Dillin still hopes to have some financing for his part of the contract, we haven't seen it yet. One has to wonder if all the efforts and expenditures of employee time and tax dollars have been worth what we have to show today: a road to nowehere with really nice street lamps...and that's about it.

3. Seek private-sector developers to build a new sports arena in the city.

* MASSIVE FAIL: The city gave up the arena to the County and there was no effort by the County Commissioners to find a private developer for the new sports arena. In fact, every suggestion I made toward that end was soundly rejected by my two fellow commissioners at the time, Pete Gerken and Tina Skeldon Wozniak. They didn't want a privately-run arena. They wanted one owned by the County, despite the fact that they/we had no money for such a project. In the end, the total cost of the new arena project was over $105 million, despite a budget estimate of around $80 million ... and identified funding on only $80 million. Of course, there still is no 'name' to the arena and no estimated $14 million in naming rights income, not to mention the other revenue sources that haven't panned out. But never mind the financial facts, isn't it pretty????

4. Meet with the ownership of Southwyck Mall to forge a compact leading to a revitalized mall in 365 days.

* MASSIVE FAIL: After realizing what just about everyone else already knew, that the owners of Southwyck had no interest in revitalizing the mall, Carty embarked upon a plan to take over the property so he could have his way. That, too, failed, and all we have now is an empty space following the demolition of the mall buildings.

5. Meet with the ownership and property owners in the Westgate-Cricket West district to define the future redevelopment of this area.

* I cannot rate this promise as I do not know if Carty actually met with any of the owners of the properties in this area. What I do know of his actions regarding the planned redevelopment of Westgate would give him a FAIL rating. He, along with Gerken and Wozniak, aggressively fought the plans of the property owner to revitalize the private property with new stores and options for consumers. Together, these three politicians almost cost us the new Costco that went up. Fortunately, between the plan commission and then District 5 Representative Ellen Grachek, their efforts to derail the project failed.

6. Nurture small-business development, and establish a 25-person business advisory council, consisting of our best and brightest small-business leaders, to advise the administration on how it can help business develop in our region and eliminate government obstacles. This advisory council will review council legislation passed during the last 25 years, and we will rescind any laws that have hampered job creation.

* FAIL: While Carty did create this council, he didn't allow it to do anything. In fact, one of the first acts Carty embarked upon was the takeover of the ambulance services for basic life support transport from the small, private companies. His business advisory council asked him to postpone the effort until they had a chance to review the plan, but Carty said no. About a year after the establishment of the council, I contacted several individuals the city said were serving as part of the group. Two of them didn't even know they'd be named to the council and two said they'd only received notice of two meetings. Oh - and just to solidify my 'fail' rating, City Council did not rescind any laws relating to 'job creation.'

7. Work with Ann Arbor and Detroit public and private leaders to create an automotive R&D corridor linking our cities. The purpose – job creation.

* FAIL: There is no automotive R&D corridor linking these cities and, with the financial mess the Detroit automakers find themselves in, I doubt they had time to even consider such a plan.

8. Fill the vacancies and voids in the Central Business District with new entrepreneurs and businesses, using tax breaks and incentives..

* PARTIAL SUCCESS: There are some new businesses in the downtown area, but not enough ... and I doubt it is enough to overcome the ones that left, or to replace the employees who were laid off or whose positions were eliminated.

9. Encourage and promote a regional government to include, city, county and suburban governments all under one roof, in as many ways as possible.

* FAIL: I think Carty forgot about this one since he hasn't talked about a regional government since his first year in office. However, his failure on this is a good thing, from my perspective, because I'm opposed to a regional government as described by the Democrats in this town.

10. Establish a grass-roots neighborhood program, in which every neighborhood has representation in City Hall and will be involved in decisions impacting them. This will be modeled after the Dayton program.

* FAIL: I don't think this even got to the planning stages.

11. Develop a “neighborhood pride” program to encourage home ownership, civic pride and urban beautification. This program will include neighborhood competition to honor outstanding efforts to improve properties.

* PARTIAL SUCCESS: Carty did establish a 'neighborhood pride' and beautification program. He used various federal programs to encourage home ownership. Of course, we don't know how many of those individuals in new homes were part of the massive foreclosure problem as a result. And while he had a program, this gets a 'partial' rating because there is no evidence the program achieved the stated goals - or that it will remain once Carty is out of office.

12. Restore the urban beautification program on main streets and in city parks while expanding these efforts into neighborhoods. We will raise $250,000 annually from the private sector to accomplish this.

* PARTIAL SUCCESS: Carty did endeavor to restore the urban beautification program and received a ton of criticism for making this a priority (with limited budget dollars) over such essentials as police and roads. As for the promise to raise $250,000 annually from the private sector? That was a MASSIVE FAIL. I don't think he got to that much total for the entire term.

13. Revitalize the urban-blight program, and return the demolition program for blighted housing to 300 demolitions annually.

* SUCCESS: I believe he did his target goal of 300 demolitions annually.

14. Commit to hiring more police officers, so Toledo will no longer have the fewest police per 1,000 residents of any major city in Ohio.

* MASSIVE FAIL: He actually laid off police officers.

15. Will actively and personally work to restore the Erie Street Market as a centerpiece of downtown revitalization.

* FAIL: Oh, he worked at it - to no avail. The place is a money pit and still isn't breaking even, costing taxpayers and creating a continual drain on general fund dollars while we go without roads and police.

16. Implement a city Gateway project that will utilize the resources of the city as well as the private sector to improve the appearance of the main entrances to the city.

* PARTIAL SUCCESS: He did work to spruce up some of the entrances, but ignored other ones. My impression that his idea of 'entrance' was an entrance to the central core of the downtown area, not the major entrances into the city proper.

17. Increase emphasis on repairing potholes more swiftly and permanently.

* PARTIAL SUCCESS: He may have had an increased emphasis, but if it he did, it wasn't enough.

18. Commit to prioritize city Capital Improvement dollars to resurface city streets, with a target of 40 miles per year.

* SUCCESS: He made the resurfacing a priority in the CIP budget and did achieve his targeted 40 miles.

19. Commit to return every phone call to citizens within 24 business hours, and respond to specific concerns within 7 business days.

* FAIL: From my personal experience, I know that he did not return every phone call within 24 business hours and I waited much longer than 7 business days for some 'specific concerns' I raised. This was a either a bad promise to make or one that sounded good in the heat of a campaign because he did not put the effort forth to ensure he would keep it.

20. Establish monthly “Meet the Mayor” nights that will rotate locations throughout the city.

* PARTIAL SUCCESS: He did get off to a good start with this, but as the meetings got contentious, he stopped having them.

21. Establish a City Hall mentoring program that will pair city officials with young people seeking such guidance.

* PARTIAL SUCCESS: He did start this, but who knows what happened with it or how successful it was.

22. Establish privately funded, summer youth-development programs in city parks.

* FAIL: Never happened.

23. Develop a summer-job program for high school students, working with the Chamber of Commerce.
24. Seek commitments from our local companies to hire college students as “interns” during the summer months.

* PARTIAL SUCCESS: These two went together. I believe there was some type of program begun, with commitments from a few businesses, but it did not continue.

25. Develop job training and retraining programs for the unemployed and underemployed while working with corporations, labor unions and our universities.

* FAIL: The city did not do this, though The Source, the county/Workforce Investment Board (federal mandated program) one-stop shop, does have such programs in place and operating on a continual basis. Carty never should have made such a promise because the federally-mandated program was already in place. He should have just promised to support those efforts and be part of a 'regional' approach to job training.

26. Work with public and private school leaders to assure that new and/or improved academic campuses become the stimulus that creates family oriented neighborhood living opportunities around the academic setting.

* SUCCESS: Carty did work with the existing New Schools New Neighborhoods program which focuses on creating a core of services/opportunities in and around the new schools that are being built.

27. Encourage adaptive reuse of vacated school properties into neighborhood community centers.

* PARTIAL SUCCESS: He may have 'encouraged' this, but there was no success in achieving it.

28. Monitor the levy requests of TPS to assess that the taxpayer is getting his money’s worth from their product.

* FAIL: If he 'monitored' this, he never shared his analysis with the taxpayers so we would know if we were getting our money's worth. Of course, perhaps his failure in this is a good thing, because it's not the job of the mayor to perform this task.

29. Work with county officials, local civic leaders and regional organizations to seek ways to share resources, reduce costs and improve economic conditions in Northwest Ohio to the benefit of all.

* FAIL: The only 'sharing' Carty wanted was for the other organizations and municipalities to 'share' their income taxes with Toledo. Despite opportunities to improve economic conditions to the benefit of all, Carty was interested only in the benefits to the City of Toledo. He even tried to steal Bass Pro from a neighboring jurisdiction because he wanted it in Toledo and not just in Northwest Ohio.

30. Pursue further discussions on establishing a regional water/sewer authority to serve our area while ensuring Toledo residents a reasonable return on their infrastructure investments.

* FAIL: This went nowhere.

31. Will appoint a health and fitness honorary chairperson to promote a “healthier lifestyle” in Toledo.

* I have no idea if he appointed an 'honorary chairperson' or not. Obviously, the effort didn't garner much attention and Toledoans ignored it, if it existed.

32. Establish a courageous and boldcommittee to define how utility rates can be reduced in Northwest Ohio.

* BOLD FAIL: (sorry, couldn't resist)

33. Restore the minority health commission to improve the life expectancy and general health of those impacted.

* Another one I couldn't find information on. If he did restore the health commission, it worked without publicity and unknown impact. But again, this isn't the role of the mayor.

34. Seek “loaned leaders” from the business and union sectors to seek ways to reduce city costs and implement modern systems to promote increased productivity.

* FAIL: City costs were reduced through furloughs, layoffs and the elimination of funding for certain city departments - not because of suggestions made by 'loaned leaders' but because of the economy and the declining tax revenues of the city. I'm certain that 'loaned leaders' would have found even more ways to reduce the costs of government if convened and allowed to actually made and implement recommendations.

Conclusion
Toledo needs a leader who not only hears, but listens to, the voices echoing throughout the city. Toledo needs a leader who not only sees problems of joblessness and lost vision, but sees solutions involving the creation of jobs and growth. Toledo needs a leader who will awaken this city to the great dreams that helped turn this once-stagnant swamp into a jewel set along both shores of the Maumee River. And Toledo needs a pro-jobs, progrowth, pro-Toledo citizenry. It is a time for citizen/heroes. It is a time for each and every Toledoan to take up the cause of building a better, stronger Toledo. With every Toledoan’s help in this endeavor, I seek to be your Mayor – your leader."

So we come up with 19 promises NOT kept, 9 that were only partially kept and many of those without success in achieving an outcome, 3 promises kept and 2 unknown.

That's not good in terms of grades - in fact, eliminating the two unknowns, his partial success and success rate is only 37.5% ... about a third of the promises he made he actually kept in some way or another.

And this doesn't even get into the huge budget deficit he leaves, the zero balance in the city's rainy day fund, or the increased taxes we're all paying thanks to his 'leadership.'

But judging him by what he said he was going to do is much better than trying to spin his term and claim that unidentified critics say he made Toledo better.

Cheers and boos to Toledo City Council - UPDATED

I discussed the City Council votes on numerous issues on Eye on Toledo last night (listen here), and today's Blade also has a recap. So here are the cheers and boos:

CHEERS to Michael Ashford for voting no on the $7.8 million Southwyck buyout plan.

"We are on the hook for $7.8 million, and he (Larry Dillin) wants the city to help him with a $17 million plan. We can't afford that," Mr. Ashford said. "He wants a commitment for 2008 and 2009 [capital improvements for the $4 million], which we don't even know yet."

He also questioned why the city of Toledo is the "middleman" buying private property, doing asbestos cleanup, and then selling it to a private developer.

That's a great question, Mike, and it's one I bet didn't get answered. But I - and I'm sure many others - appreciate your take on this one. NBC24 has a good explanation of the requirements the city agreed to - and a copy of the letter of agreement on the deal from Larry Dillin.

BOOS to the rest of council, especially the Republicans, who seem to think this is what constitutes economic development while they perpetuate other policies and taxation that make this city 'not business friendly.'

CHEERS again to Michael Ashford for voting against spending $35,000 to hire a company to survey 800 Toledoans about their budget priorities, especially considering the fact that both the University of Toledo and Bowling Green State University have the ability to do the same thing for considerably less.

BOOS to the 10 council members who voted in favor of the new convenience store licensing law (background here, here, here and here.) According to an email from one of my WSPD listeners, Councilman Joe McNamara called the proposed legislation 'Draconian' and was going to meet with Councilman Rob Ludeman (the sponsor of the legislation) Monday to see about making some changes. Changes were made - some good, some not - and McNamara urged passage of the law which reflected 'minor tweaking.'

Some of the 'tweaking' was not 'minor' and I'll be discussing this tonight on Eye on Toledo at 6 p.m.

CHEERS to Betty Shultz and Joe Birmingham for voting against this.

Maybe they're finally getting it!

During a committee hearing yesterday, Toledo City Council President Michael Ashford was not convinced that it was a good idea for the city to purchase a portion of the Southwyck Mall property. And kudos to him for what he said, as quoted in today's Blade!

"The City of Toledo in this deal has become the middleman of buying private property, doing the cleanup, and then turning around and selling it to a private developer," he said. "That's not our role and responsibility."

But that's not the only news that came out of the committee meeting - the actual costs are closer to $2.6 million ... not the $1,095,000 that was originally published. The extra $1.5 million is to pay for the removal of any asbestos in the building, though Councilman Betty Shultz thinks the costs could be higher.

And the city plans to give itself a no interest loan from its revolving loan fund in order to cover the outlay. While city officials say that the purchase price and 80% of the clean-up costs would be repaid by Larry Dillin when he purchases the property from the city, the remaining 20% wouldn't be repaid until Dillin has all his private financing in place and his tenants lined up...and who knows when that could be, considering his other major commitment to the Marina District.

And that $1.5 million loan the city is going to make to itself is money that won't be available for other purposes in the meantime.

The fact that Michael Ashford believes this is not a proper use of public funds is terrific. Hopefully, he'll be able to convince his fellow council members of this(including the Republicans who've lately been more interested in agreeing with Carty than in standing for Republican principles) and the city won't interject itself into what should be a private transaction between the owner(s) of the property and Larry Dillin. Let Dillin purchase the property, clean it up and then develop it as he wants...and let the city focus on its statutory responsibilities.

(If you'd like background on the Southwyck Mall issue, type 'Southwyck' in the Search This Blog box in the left-hand column and you'll find seven other posts on the topic, including what appears to be a now defunct plan to take the mall by eminent domain.)

Purchase of Southwyck? Reality sets in

Well, as I've been saying all along, Southwyck is owned by private individuals and, until those people want to do something with this empty mall, nothing can happen.

Despite headlines about the City of Toledo purchasing a portion of the property, this Blade story adds some reality to the prospects. (For more background, search this blog for 'Southwyck.')

Developers interviewed said the deal isn't any good without all the pieces. And it doesn't look like all the pieces will be in place any time soon - if ever. The scary part is the fact that Larry Dillin, the city's hand-picked developer for the property, has no comment on the city's plan to purchase and hold the portion of the mall for 30 days.

"Under the term's of the deal, the city would pay $1 million to the M.G. Herring Group of Dallas for the vacant Dillard's store site and an adjoining parking lot. The city would make the purchase with the intent of re-selling the property to its developer within 30 days.

But Robert Reinbolt, chief-of-staff for Mayor Carty Finkbeiner, said yesterday Mr. Dillin has not agreed to that.

The developer, he said, would prefer to delay the purchase until other pieces of the development are in place including finding tenants for the project and reaching agreement with Dillard's."

(Dillin, of course, sounding like the savvy business man that he is...)

This, alone, should give City Council some serious pause before they vote on the deal at today's council meeting. And it makes my question ('what happens if Dillin doesn't exercise his option in 30 days?') even more pertinent.

But, this is our mayor ... ready, shoot, aim. As Steve Serchuk, of Signature Associates, said, "You've either got something or you've got nothing. Currently, you got nothing. You have something when you get two pieces."

First, I don't think the city should be purchasing any portion of this land. They've picked a developer and Dillin should be the one to do the purchasing. But this being Toledo, if council members vote to do so, they should insist that any agreement to purchase is contingent upon acquiring the other portions of the mall AND they should have a signed commitment from Dillin before risking public dollars.

I can only hope that cooler minds prevail in this venture ... I'll update you after the vote.

Toledo to purchase part of Southwyck

According to this story in The Blade, the mayor has signed a letter of intent to purchase a portion of Southwyck Mall for $1 million.

He intends to ask city council to vote on the measure at tomorrow's meeting. Of course, I'm sure this will be voted on as an 'emergency' which means it will go into effect as soon as the mayor signs the legislation, rather than wait the normal 30 days.

Carty Finkbeiner then explains that Larry Dillin, who's been selected by the city to redevelop the mall, will have an option to buy the city-owned portion within 30 days.

So here are the questions city council should ask:

* why must the city purchase this property in the first place?

* if the owner of this portion is willing to sell, why not sell directly to Larry Dillin?

* where will the city get the money? The article says that the money will come from the Southwyck line item in the capital budget. However, nearly $1 million of that amount has already been allocated to the road, street sign and beautification projects. Exactly how much money is there in this line item?

* what happens if, in 30 days, Dillin does NOT exercise his option to buy?

When council makes its decision on this, I hope they'll remember all the other priorities for which the city has responsibility - likes roads and infrastructure. And didn't they just decide to borrow a ton of money to finish the MLK Bridge?

Up is down in Toledo when it comes to eminent domain

Yes, up is down, black is white, and I find myself agreeing with Democrats on Toledo city council while wondering what's happened to the Republicans.

The issue? Eminent Domain for Southwyck Mall. (For complete background, read this, this and this.)

If you're not familiar with Toledo politicians - or even if you are - you might be surprised to learn who said the following:

"...eminent domain is a tool the City of Toledo can use to get Bill Dillard and Buddy Hering, who own parcels at Southwyck, to complete the deal with Larry Dillin, president of Dillin Corporation."- Toledo Free Press

or this:

“They [the owners of Southwyck] have a history of not cooperating and running Southwyck Mall into the ground. Those uncooperative owners are the reason we have to look at eminent domain. We can't let them hold us hostage.” - Toledo Free Press

or this:

"It really bothers me that we can't get a national company to be a responsible corporate citizen, and I think we need to take bold action." - Toledo Blade

Anyone familiar with the traditional stances of the two parties would probably guess these quotes came from the Democrats...but they didn't. The first quote is from Republican Rob Ludeman, District 2 representative. The other two quotes are from Republican George Sarantou, at-large member of council.

And the Democrats? They said this:

"Council President Michael Ashford questioned whether the administration has the legal justification for eminent domain, given recent rulings by the Ohio and U.S. Supreme Court on the use of eminent domain for economic development." - Toledo Blade

and this:

"Councilman Frank Szolosi said he has “a fundamental opposition to the city's use of eminent domain.”" - Toledo Free Press

Further, our Republicans are strangely silent about the revelation that the supposed 'public use' to justify eminent domain was never part of the plan for Southwyck - and, contrary to what the mayor said, was NOT requested by Larry Dillin, the proposed developer of the property. The city has decided a road right through the middle of the property is 'needed.' (Posts linked above show the planned road and the original - and still current - site plan presented by Dillin.)

According to this Blade article, "Mr. Finkbeiner said the road fits with the Village at Southwyck concept proposed by developer Larry Dillin.

“[Mr. Dillin] feels that it’s very important that that mall be broken up, that there be a connecting road running north and south, to link the beltway road,” the mayor said, referring to Southwyck Boulevard."

But this is directly contradicted by the developer, according to the Free Press article:

"“We feel very strongly about our plans to rejuvenate the Southwyck property and want to move forward with them,” said Bill Thomas, director of real estate services for Dillin Corp.
...
Thomas said the Dillin firm had nothing to do with the city's latest plans for a connecting road through the Southwyck property. If the city has plans that show a connecting road, “We were not involved in them,” he said."

So the mayor lied about the need for a road, the Republicans are supporting eminent domain because they don't like what a property owner is doing - legally - with their private property, and the Democrats are the ones asking questions about the legality and the costs.

Truly, up is down in Toledo.



BONUS ISSUE: The comment by Sarantou about being a "responsible corporate citizen," ties in with this quote, also from the Blade article:

"Dave Lemon, the volunteer leader of a citizens' organization in the Southwyck area, said Mr. Dillard shows no corporate responsibility for the area surrounding the mall, and is "stubbornly refusing" to sell a mall that he is neglecting."

Perhaps we're getting to the underlying message here? That you're only welcome in our community if your use of your private property corresponds to our determination of being 'socially responsible.' But that's another post for another time...

Hypocrisy in Toledo

According to this Blade article, our mayor, Carty Finkbeiner, is dead-set to exercise the authority of government to take private property (Southwyck Mall) because he does not like what the owners are doing - or rather, not doing - with the property. (Background on the issue is here and here.)

Of course, the reason for taking the property is a newly-discovered need for a road to go directly through the property, thus making the 'taking' necessary to meet a 'public use.'

The hypocrisy is overflowing, especially in this statement from the article:

"Mr. Finkbeiner said the road fits with the Village at Southwyck concept proposed by developer Larry Dillin.

“[Mr. Dillin] feels that it’s very important that that mall be broken up, that there be a connecting road running north and south, to link the beltway road,” the mayor said, referring to Southwyck Boulevard."

Unfortunately for the mayor, the site plan shown below (readily available here at the time of this posting), shows NO ROAD through the middle of this property.


(This image is shown with north on the right, and the beltway road surrounding the property running from the left - south - side to the right - north side. Reynolds road accesses on the bottom of the image.)

Of course, I'll admit it is possible that Larry Dillin has changed his site design, but I'd find that to be highly convenient to the city, considering that this site plan is the one he's been showing everyone since 2003.

And then we have the comment from our Republican representative of that district, Rob Ludeman, who says:

"“This is to move Mr. Dillard and Mr. Herring off dead-center. This is the step we need to take to bring [Southwyck revitalization] to fruition. It is blight, and it has had a residual effect on all the surrounding area, residential and commercial,” Mr. Ludeman said."

...admitting that the true purpose is not because they need a road, but because they want to redevelop the property and the property owner isn't interested in doing what they want.

And then Ludeman mentions that dreaded term - blight. However, Mr. Ludeman might want to read last year's Ohio Supreme Court ruling in Norwood v. Hormey which said that communities should not be targeting buildings in good condition and whose owners were not property-tax delinquent and declaring them blight. The Supreme Court also said that communities cannot claim 'deterioration' of a property as a reason for a taking.

From the summary of the case:

"The use of the term “deteriorating area” as a standard for a taking is unconstitutional because the term inherently incorporates speculation as to the future condition of the property to be appropriated rather than the condition of the property at the time of the taking.

Courts must apply heightened scrutiny when reviewing statutes that regulate the use of eminent domain powers."

It's the last sentence which is going to come back to haunt Toledo politicians. Any heightened scrutiny of this eminent domain action will show that they never intended for a road to be built through the middle of this property, that they've been frustrated by the owners' lack of interest in selling or redeveloping the property, and that they've come up with a thinly-veiled excuse of a sudden 'public use' in order to justify their actions.

And the cost to the public for this will be enormous, considering the projected budget deficit for 2008 and the fact that we have a half-built bridge in the downtown which has no source of funding for completion of the work.

Further, the intangible costs associated with this idea are immeasurable. The anti-business message alone could be the final nail in the coffin for many. And the precedent this would set for residential property owners is scary. After all, if they can do this with a mall, what's to prevent them from deciding any neighborhood is ripe for re-development and, when you don't want to sell, they just decide to build a new road and then take your home via eminent domain?

There's a public hearing on this scheduled for Monday, Sept. 24, 2007, at 4 p.m. in city council chambers. Newly-elected president of council, Michael Ashford, indicates that council would like to see plans for the road - and an explanation as to why this recently-discovered 'need' for a road through the middle of the property is more of a priority than other roads in the area.

You need to show up to this hearing and tell city council that such takings are, in the mayor's favorite words, "just not right."

Southwyck Mall and Eminent Domain

Tonight, during my guest hosting stint for Eye on Toledo on NewsTalk 1370 WSPD, we discussed the pending Toledo city council resolution to begin eminent domain procedures against the two owners of the Southwyck Mall property.

During the discussion, I mentioned that the city's new plan for a road going through the middle of the property is their new, and thinly-veiled, "public use" excuse for a reason to exercise eminent domain. Further, I said that the plans shown to the public, so far, by Larry Dillin (who the city has picked to redevelop the property) don't show any such road.

The best photo of the planned road is available in this WTOL 11 story from August 30th: City Council Discusses Major Changes at Southwyck.

To see the drawings Larry Dillin has presented for his idea of how a re-developed Southwyck property would look, you can go to this link and view the site plan. (This is a large pdf file that may take a moment to download.) Other views of his plan are also available at his website, www.villageatsouthwyck.com

If you'd like to weigh in on the issue of eminent domain actions against the Southwyck property owners, Toledo City Council will have it on the agenda for their Environment, Utilities & Public Service Committee meeting on Monday, September 24th at 4 p.m. They'll also discuss the appropriation of $2.7 million from the Capital Improvements Budget for infrastructure improvements in and around Southwyck. This would be the time to make your opinions known!

Eminent Domain?

From The Patriot Post:

Founders' Quote Daily

"The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If `Thou shalt not covet' and `Thou shalt not steal' were not commandments of Heaven, they must be made inviolable precepts in every society before it can be civilized or made free."

-- John Adams (A Defense of the American Constitutions, 1787)

I thought this quote particularly timely in light of Toledo Mayor Carty Finkbeiner's comments in this Blade article.

For years, politicians have been promising to do something about the failing Southwyck Mall - despite the fact that the owners of the mall have expressed little or no interest in doing so. Upon Finkbeiner's election, he brought in local developer Larry Dillin and, together, they've made numerous announcements about renovations, redevelopment, etc. However, neither the city nor Dillin have any ownership in the property.

"Plans to redevelop the aging Southwyck mall as a mixed-use Village at Southwyck have been stuck in park with the refusal of mall part-owner Bill Dillard to either sell his share or join a redevelopment effort with Perrysburg real-estate developer Larry Dillin.

Mr. Finkbeiner said the possibility of using the city's eminent domain power to take control of the mall has not been ruled out. He said he intends to give the current owners 30 days to consider Mr. Dillin's proposal before taking any action."

I realize that the U.S. Supreme Court has said that a community may take private property from one owner and transfer it to another private owner if the benefit to the community is greater. However the Ohio Supreme Court, in a 2006 unanimous decision, ruled:

"Although economic factors may be considered in determining whether private property may be appropriated, the fact that the appropriation would provide an economic benefit to the government and community, standing alone, does not justify the taking of the property under a provision of the Ohio Constitution that requires eminent domain be for “public-use” (Section 19, Article I)."

The area doesn't currently qualify as blighted. And if the city wants to say that the area is 'deteriorating' in order to justify the taking, the Supreme Court weighed in with this:

"The use of the term “deteriorating area” as a standard for a taking is unconstitutional because the term inherently incorporates speculation as to the future condition of the property to be appropriated rather than the condition of the property at the time of the taking."

Carty's used to ignoring the laws (see story on 'Prior Restraint?') but this time he's not dealing with a bunch of college students. He's dealing with a national corporation with the resources to defend what is rightfully theirs and not be intimidated by the political posturing of a local city mayor.

Aside from the terrible message this action sends to business owners in Toledo (if we don't like what you're doing with your company, we'll turn it over to someone who we think has a 'better' idea), I don't believe that Carty can legally force the owners to kowtow to his wishes. And what happens if and when the Southwyck Mall owners say 'no thanks' to Dillin's offer? Will Carty, ever the one to fight defiance of his ideas, invest city resources to take them to court?

Because of the shaky legal footing regarding eminent domain, setting a 30-day deadline to 'finish negotiations' places Carty and the city in the wrong position. However, this appears to be what we've come to expect from our mayor.