Dean Monske, Steve Herwat presented the budget information at the Jan. 5 Toledo City Council Economic Development Committee meeting.
Monske said things have worked well with Council, especially with some of the joint meetings that have been held. He thinks they’ve involved council fairly well in informing them despite a “few bumps.” He said they wanted to collaborate more with their partners, working with the Chamber of Commerce, almost all of their small business partnerships goes through their small business section.
He referenced the retention project with LCIC and believes that will continue to work well in 2011. International business development has been the focus the past several months that they hope creates positive results next year.
Ludeman said there are some annual meetings coming up, like the Chamber’s breakfast for legislatures that he encourages council members to attend.
Craig said on the Rossford water deal, how do we retain businesses for the city when we give water away to the suburbs. He said we are not getting JEDZ or JEDD, only small revenue sharing agreements, we need to be locking in the entire communities.
Monske said Herwat has been more involved in that, Monske wanted to say we are blessed with great assets, he said most are not dependent on one issue, anytime you can improve pieces of the puzzle helps. He wanted them to remember, it’s the bottom line of what everything adds up to. Craig said we are developing regional economic development. Monske said, yes if he can’t get the project in Toledo he wants places closer us to get it instead of Georgia or something else. Craig said you bring in any commercial development or manufacturer you have to have water. We need to share in the revenue brought in by those new businesses, if we don’t, Toledo will continue to shrink.
Herwat said the Rossford water deal focuses on 80 acres. Craig said Rossford is more than 80 acres, it’s more than the Golden Triangle. Herwat said the deal negotiated years ago was the largest one of 3,000 acre JEDZ. Craig said why did they give it to us? Herwat said because they needed the water. There are 6,400 people in Rossford, Herwat said the largest water customer in Rossford is a Chili’s restaurant, we don’t have large industrial customers in Rossford. Herwat said compare that to the one in Sylvania that contains Flower Hospital. Craig said he understands that, the sole reason it was granted was because of their need for water. There are prime spots for investment in Rossford. We have to seek to benefit from the economic development that the water enables.
It was stated yesterday people like to develop in green fields, we don’t have a lot of green fields in Toledo. Herwat said we aren’t giving the water away, they are paying for it plus a premium. Craig said that benefits us in our water rates, but he’s not content with just that little piece of the pie that we get reimbursed for our water. He thinks this is a short sighted policy decision. He was under the impression the City was going to seek a JEDZ for the entire community, not just sections from the discussions this past summer.
Herwat said they have had successful agreements, including the one in Troy Township. He said they can go back and second guess what Council did in 1961. Craig said he doesn’t have any control over what happened in 1961. Herwat said this administration did not negotiate the prior deal. Craig said it was this administration that negotiated the deal with Rossford. Herwat said they wanted 15% of the casino revenue. Craig said if there are hotels built, companies built because of the casino, Toledo won’t benefit, but Rossford will get the water. They should put it at 2008 water usage and if they go over that — he thinks this is a bad precedent, he thinks this agreement is more important than any of the past and he is sorry Herwat takes a light hearted approach in giving away one of their most valuable assets.
Ludeman said he appreciates Craig’s displeasure, if a 500 employee business were to open up there, he would think a large number of the employees would be Toledo residents and we would get income tax from them. He said there is a give and take, he’d like to get back on task.
McNamara has five issues – Ludeman said he wanted to get through the budget first. Martinez will also wait until after the budget has been presented.
Herwat there are two separate budgets, economic development and real estate. ED has four positions, Peeples funding is split through ED and block grants. Some of the other funding for positions comes from non general fund sources. RE has two positions. The same six positions will exist in 2011.
An increase was related to the Downtown employment incentive program, the other line items amounts are essentially the same as 2010. Real Estate increased $25,000 for title and appraisal work and an intern, they had not set money aside in 2010 so they had to make other budget adjustments for that funding, one example was having an appraisal done for the Northwest Police District building. The city thought the building had a higher value than real estate agents told them.
Herwat was going to give them the line item comparisons for personnel costs.
Expenses for Erie Street Market were dropped 5,000 – they have booked over $10,000 in events for 2011. Taxes associated with the Monclova property are listed, they are still trying to sell that property. The Warren Sherman costs will be removed since the city no longer has ownership.
Collins had some questions concerning specific line items. Herwat answered his questions for the most part, a referral was made on details on consulting costs.
On the Erie Street Market it was said $350,000 per year is the cost to operate the Erie Street Market. The Libbey lease is valid through July of 2012. It’s subject to renewal by both sides, Collins asked if the square foot price had been compared and verified that we are paying their utility costs. Collins went through the other costs associated with the Erie Street Market and wanted to know if instead of a separate insurance policy related to alcohol if it could be covered under the FM Global coverage. Herwat said he’d provide him with an answer with that, the costs for that are $9,000 each year. Collins also asked about sovereign immunity related to alcohol. Collins wanted verification as to the liquor license transfer from the Chowder House, Herwat was going to get back to him on that. Herwat said they have an ROI now, before it was questioned as to were they bringing in more revenue than expenditures.
Some of the history of the Erie Street Market was covered and some of the changes in policy was discussed. Collins made a referral on the property at the Hotel on Reynolds. Herwat said he would get him the information on the transaction.
McNamara wanted to know if the contract with LCIC signed yet? Monske said they had not turned over the check yet. It was approved by council but there is some discrepancies related to what the funding could and could not be used for. He asked for an update on the Eyde project. Monske said nothing has changed since the last time from what he was aware of, he said the company would probably be happy to come back to discuss this. McNamara asked who was going to write the amendment for the Berdan building, it was stated the company had hired a lawyer familiar with HUD 108 financing. McNamara asked when the payments on the Marina District owed – Herwat said August or September of 2012, then corrected himself to 2011. McNamara said those are personally guaranteed by Mr. Dillion and there is no line item in the budget for that. McNamara wanted an update on Tiffin University, Monske said they have moved in, they are working through the TIE agreement. He asked who reviews the income that comes in from JEDD and JEDZ, Herwat said Finance does that. McNamara suggested an intern or someone check that to make sure we are getting the income we are supposed to. On a broader issue, the weakness of the water policy is we talk about wanting revenue sharing but there is no guidance on what is a good revenue sharing versus a bad revenue sharing agreement. Monske said they met with DPU several days ago and they are trying to develop the framework.
Ludeman said the parking lot for Tiffin was full, he agreed with McNamara on checking the JEDD/JEDZ.
Martinez said most of his questions were answered on the budget, he said on the 108 loan uses, we don’t have a policy on what is appropriate, he’s looking for that to happen with input from the community. He said there are huge issues in using 108 loans, he’s not opposed to them, but we need to have a sound policy with underwriting requirements and criteria. Cleveland has an advisory board for these issues, as one example. Martinez said there are good models out there.
McNamara said the model of an independent group is good, with all due respect, the motivations of each departments could be different than the larger community. Cleveland has an independent body that evaluates 108 deals — that eliminates/reduces some of the political aspects of the decision. Monske said he agrees 100% he thinks it a huge detriment to have tools in our tool box and not understand how to use them, he supports a policy for this. He said it’s in no one’s best interest to find out at the eleventh hour that something can’t be done. Monske said his goal is not to put as many deals as possible it’s to put together solid deals that benefit Toledo. He’s not trying to build a resume or just see how many deals he can put together.
Ludeman said UT would be coming in a future meeting to discuss.
