Western & Southern Financial Group has accused city leaders, advocates for the homeless and others of misleading the public and federal officials about plans to renovate the Anna Louise Inn. Attorneys for Western & Southern, which wants to buy the inn and convert it to an upscale hotel, warned city officials in a letter that they could face tens of millions of dollars in penalties for making “false claims” to the Department of Housing and Urban Development.
The city of Cincinnati doesn’t track the financial return on its $250 million incentive investments
So taxpayers provide the funding, but the city of Cincinnati doesn’t have to show a return on incentive investments? Imagine the corruption at play. This story has an aroma of bagels to it, does it not?
Negress Liz Rogers (above) was given a $684,000 grant to open a restaurant and $300,000 loan by the city, and when she ran her business into the ground, she was forgiven all but $100,000 of the funds provided to her by the city.
When the Enquirer asked Cincinnati about $250 million in incentives granted to business and developers since 2008 and how return on that massive investment is tracked, city officials couldn’t provide answers.
The newspaper’s reporters then created and scoured a database of seven years’ worth of deals and determined the city gave tax breaks and other types of incentives more than 200 times since 2008, with beneficiaries ranging from Procter & Gamble to the owners of fraternity houses.
City documents show officials expected $2 billion of investment in return, as well as creation of 14,114 jobs and retention of 15,290. The problem: The city doesn’t track those totals.
The deals were granted with no guidelines about what is a good deal — and what isn’t. And City Council approved many of them almost sight unseen because they were given details at the last minute. In addition, the deals shortchange city schools, education leaders say.
Jeff McElravy, who served as the city’s interim development director from July 2013 through last November, resigned Tuesday in the midst of Enquirer questions related to the incentive agreements. He and other city officials could not explain discrepancies in some deals or how they calculate return on investment.
“This is a challenge because we have asked our elected officials and their staffs to do what they can do to foster economic development in the community,” said Jeff Rexhausen, research associate at the University of Cincinnati Economics Center. “Economic development is inherently … risky.”
He recommended the city get an outside evaluation before reconsidering policy approaches. “It’s the sort of thing that I’d suggest doing that is in the long-term best interest of the city and county,” he said. “If you don’t do a review, then it’s hard to learn from those experiences outside of anecdotes.”
Mayor John Cranley said the public is entitled to know how tax dollars are spent.
Incentives certainly helped lure General Electric to the riverfront and dunnhumbyUSA to the long-cursed corner at Fifth and Race streets. But roughly 15 smaller deals haven’t worked out as planned or raise questions about whether projects gave the city the best return.A Roselawn salon got a $35,000 loan in 2008, but so far has paid just $5,000.
The developer of the Clifton IGA got a property tax exemption worth $203,724 in 2011 to reopen the beloved neighborhood grocery store, but it sits vacant.
“The US shouldn’t give high clearances to Jews, because when asked to help, we’re willing to do anything for the love of our country, Israel.” — Convicted Israeli Spy Jonathan Pollard, during interrogation by the FBI. Make note that Pollard was born in the US and his spying put America in serious nuclear risk back in the 1980’s.