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God, seeing FCE trying to revive this for their own good is entertaining.

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God, seeing FCE trying to revive this for their own good is entertaining.

 

No, its pathetic.  It's a waste of the tax payers time.  It only ads doubt to the masses that our leadership is not leadership material.  The idiots at Cleveland.bomb have a point. 

 

Say the mall site is the site and squash any further discussion.  The commissioners and the Mayor need to say that in a joint conference.

 

Once that happens, there wont be any further public discussion.

agreed.  that's why i can't wait for the engineering study to come out.  Once that comes out, and if it (as we hear it should), states the existing foundation is reusable.  That should be it.  No more site selection discussion.  And those in charge should state that and be done with it.

Hi all,

 

Why not take it a step further, take over the Justice Center as well. Tear down the Cleveland Police headquarters and two jail buildings. Remove the god awful facade from the courts tower, replacing it with glass, and converting it to a convention hotel. Expand the convention space under Ontario St. The city would then have a convention center that ran from E 6th. St. to W 3rd St.. There is enough vacant land downtown for the county to a new courts building. Of course this would no doubt run to close to billion dollars. Warm nuzzles and bear hugz to all.

 

Jim S.

 

The Justice Center will not be torn down.  I have heard (sorry MTS... no link) from those who were around at the time, that the cost to build (due to overruns) the Justice Center exceeded the cost to build the Sears Tower in Chicago!!!  According to the same source, there were some swirlings of County corruption that led to the massive overruns.  Regardless, this building is not some simple office/residential structure that can be adapted for re-use.  The jails and the courtrooms are all interconnected to shuffle prisoners back and forth.  It would be monumentally cheaper just to build a new hotel than to adapt the JC for that use.  Plus, the connectivity to the old county courthouse (which is still in use) needs to be maintained.

 

The County building is another story.  That ugly piece of shyte (not saying the JC is asthetically appealing) is just begging to be knocked down to make room for either a new convention sized hotel or future expansion of either the CC or MM.  I believe the old LMD renderings put the hotel where the MM is now supposed to go with the MM connected to it on the land where the County building now sits.

 

Didn't LMD also contemplate a second hotel somewhere in the area of Willard Park?

Question:

 

Why wouldn’t taxpayers own the Medical Mart?

Posted by Jim Nichols February 11, 2009 22:30PM

 

http://blog.cleveland.com/metro/2009/02/_the_publicprivate_partnership.html

 

Excerpt:

 

The public-private partnership for the convention center and medical mart proposed for downtown Cleveland is structured like this: the public sector would pay for it, and the private sector would own and operate it, with little public oversight.

 

Ducate, the president of the pro-industry Center for Exhibition Industry Research in Dallas…

 

“It’s kind of a puzzling thing,” Ducate said Wednesday. “There certainly are convention centers that are publicly financed and owned and are privately managed. But I’m not aware of any publicly financed centers that have been transferred from public ownership to private ownership and operations.”

I'm constantly amazed by this question.  To me it seems an absolute blessing that we aren't on the hook for this thing.  MMPI is assuming 100 % of the risk. So I don't have a problem with them taking 100% of any potential profits.  Let's be realistic, convention centers in general are a losing endeavor.  The only real benefit to the community is the spinoff $ that land in your town via hotels, restaurants, bars, etc.  The MMPI poeple obviously feel that by attaching the MM they can run at a profit.  Last I heard they were investing 20m into the deal, which I would guess would be enough money to build a 5 story medical mart.  So... who cares who owns the facility if we are getting the spinoff benefit?  Particuarly since most of the spinoff benefit would be coming as a direct result of the operation they are running...

Maybe some would see it as; since we would still be subsidizing its operating costs, that we are in a sense subsidizing MM's profit?

McCleveland:  Somewhere in one of the recent PD articles they talked about using money from the hotel bed tax for operating the CC.  Just to get a clear picture of the proposed setup:

 

The taxpayers pay to build the CC

MMPI puts up the money that basically pays for the MM

MMPI owns both or just owns the MM?

Hotel bed Tax money is used to operate the CC?  Does MMPI put up operation money for the CC, MM or both?

 

 

I guess you could look at it kind of the same way as the film tax credit.  Would you rather get .75 of every dollar spent, or zero cents of no dollars spent.

I guess my only concern is would the CC be completely owned by them?  Would it be part of their assets?  If so, my concern would be, hypothetically, 20 years from now, MMPI doesn't want to be in the Cleveland convention business anymore.  Are they going to try and sell us back the CC for $1 billion dollars?  Wouldn't it make more sense for the county to own it and lease it to them for $1 a year?

 

I understand them owning the MM, but the CC too?  Seems strange.

^true.  There certainly are some details that need to be worked out.  I guess i just don't care if they take all the "profits".

Oh, I totally agree...especially since CC's generally don't make much money.

I guess my only concern is would the CC be completely owned by them?  Would it be part of their assets?  If so, my concern would be, hypothetically, 20 years from now, MMPI doesn't want to be in the Cleveland convention business anymore.  Are they going to try and sell us back the CC for $1 billion dollars?  Wouldn't it make more sense for the county to own it and lease it to them for $1 a year?

 

I understand them owning the MM, but the CC too?  Seems strange.

 

A valid point. Where would Faust be today had he read the fine print? But then, he didn't have Fred looking out for him like we do.  Comforting isn't it?

I was able to attend about two thirds of the public meeting and I came away impressed with the overall presentation. Let MMPI do what they do. I was amazed at the amount of work that they have put into it. Very thorough. ForestCity's effort was predictable, same old story.

I don't now how far from the final the renderings will be but I like the direction it's taking. Very nice.

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The CC would still be owned by the county, but operated by MMPI.  Im not 100% sure who would own the MM, but if MMPI is putting up 20 million, it is disingenuous by FCE/PD to say they will be "given" the MM

I guess you could look at it kind of the same way as the film tax credit.  Would you rather get .75 of every dollar spent, or zero cents of no dollars spent.

The CC would still be owned by the county, but operated by MMPI.  Im not 100% sure who would own the MM, but if MMPI is putting up 20 million, it is disingenuous by FCE/PD to say they will be "given" the MM

I'm sorry, but I think there's a point here that's being missed.  From the above Plain Dealer article:

(http://blog.cleveland.com/metro/2009/02/_the_publicprivate_partnership.html)

 

"But a memorandum of understanding the two sides signed nearly a year ago lays out the general guidelines. Among them:

 

The county will pay for almost all the construction costs, which were last publicly projected to be around $425 million, by issuing 20-year taxable revenue bonds.

 

The county will then give the facilities to MMPI to own and operate.

 

MMPI will lease the complex to the county for $40 million a year, which will come from a quarter-cent sales-tax increase that commissioners imposed in 2007. MMPI will use the lease payments to pay off the bonds.

 

The county in turn will sublease the buildings back to MMPI. The company won't pay the county any rent or cut of the operating proceeds but instead will promise to cover all operating costs of running a "first-class facility," eat any losses and keep any profits.

 

The county will pay MMPI to run it -- $6 million in each of the first three years and $5 million for each of the next 17 years. The memorandum's wording indicates that performance bonuses could eventually push that number to $8 million, but county officials and MMPI won't comment. Also, neither will identify the source for that money. County hotel taxes now pay Cleveland about $6.5 million a year toward the cost of running the Cleveland Convention Center.

 

The memorandum gives the county virtually no governance power, rights or leverage when it comes to the complex's operations, policies or profits once the facility is built. It allows only for the county, every five years, "to exercise remedies to be agreed upon in the lease/sublease agreement" if MMPI doesn't book enough business."

 

Now, I am as in favor of this CC/Medical Mart project as anyone is here on this board.  Not only is it a sense of civic pride for me (and I know many others), it could also be personally enriching.  With all that being said, I do not think that it's unreasonable to question why the County will outright GIVE the facility to MMPI, who will then force to the county to pay $40 MILLION PER YEAR IN RENT, and $5-$8 million more to manage, for a facility WE, the taxpayers, funded and built in the first place.  Oh, and by the way, MMPI gets to keep any profits.  It's seems like an outright public gift of nearly half a billion dollars to the private sector (and darn near a billion if you count the rent payments), in the same vein (but much greater in scale) as if the Cuyahoga County taxpayers were to gift a new Eaton HQ, or build the Flats East Bank for Wolstein.  And before people get started, those who work at Eaton, or patronize the FEB, would stimulate the local economy (and thus justify the economic investment) in much the same way as convention goers.

 

Now I cannot overstate this enough, I am completely in favor of the current CC/Medical Mart plan, even as it pertains to the operating agreement...because I think the investment will more than repay itself,  I think there is no more capable firm on Earth to tackle this than MMPI, and honestly, I think that there is an inherent element of necessary impropriety that comes along with these public-private partnerships, for better or worse.  However, you have to admit that it is fair for some to question the seemingly illogical calculus in just how this entire project is being arranged.

 

Edit: I came off a little caustic in my original posting last night (thanks Stella Artois! :drunk: ), so I cleaned it up to be a little less accusatory.

Thats confusing as f@#$!

 

I agree brtshrcegr , that sounds excessively generous.  Im not sure if some of that is just the PD's interpretation of it (yes we must question them), especially since some are saying the county would still own the CC, or if it really is that lopsided.  It would be good to know how they came to such an understanding (whatever it is).   

Lawyer stuff.

It is my understanding it is structured for tax benefits to MMPI and CC/Public Hall will revert back to the taxpayers in 20 years and the MM will remain with MMPI. The Devil in the details to follow.

Here is how somebody explained it on Cleveland.com.  This would make a bit more sense in that as GreenerPastures says would revert back to the taxpayers.  (courtesy of NEOobserver)

Btw, if this is indeed the case, the PD has again failed in its reporting.

 

- Cuyahoga County sells (about) $400 million in bonds

- Cuyahoga County then lends the $400 million to MMPI

- Using the $400 million loan, MMPI builds and owns the convention center, absorbing any construction cost overruns

- Cuyahoga County then leases the convention center under a rent-to-buy deal, paying MMPI about $40 million/year

- MMPI uses the lease payments from Cuyahoga County to pay back its loan from the county at the rate of about $40 million/year

- Cuyahoga County uses the MMPI loan payments to pay the bondholders who bought its bonds

- At the end of 20 years, Cuyahoga County owns the convention center.

 

"I don't know why the deal is structured in this way--you'll have to ask Fred Nance. I'm guessing that MMPI gets tax advantages and the county gets some sort of guarantee that it won't pay for construction cost overruns. I'm also guessing that there are legal considerations that forced the deal to be set up in a convoluted way."

 

Engineer Robert Darvas: Cleveland Convention Center foundation can be re-used for new facility

Posted by Steven Litt / Plain Dealer Architecture Critic

February 14, 2009 18:07PM

 

The proposal to build a medical mart and a new convention center at the downtown Mall in Cleveland will likely hinge on the answer to one critical question: Can the foundation of the existing convention center below the Mall be reused for a new convention center?

 

Robert Darvas of Ann Arbor, Mich., an engineering consultant with decades of experience, said Friday he is "absolutely" convinced the answer is yes...

 

http://blog.cleveland.com/architecture/2009/02/engineer_robert_darvas_is_conv.html

"Darvas, a native of Hungary"

 

leave it to my people to make the mall site work!!!  :laugh:

 

and i am loving those renderings.

Will MMPI really own the convention center?  As in the land and structures and all?  Is that right?  Don't get me wrong, I really want this convention center, but why does the city not own it?

Here is how somebody explained it on Cleveland.com.  This would make a bit more sense in that as GreenerPastures says would revert back to the taxpayers.  (courtesy of NEOobserver)

Btw, if this is indeed the case, the PD has again failed in its reporting.

 

Interesting, and your explanation of the arrangement is certainly what I suspected it was.  One has to wonder why the PeeDee wasn't able to explain it in this less inflammatory and more reasonable-sounding manner......oh, wait. :bang:

http://blog.cleveland.com/pdopinion/2009/02/making_the_case_for_clevelands.html

 

Making the case for Cleveland's medical mart and convention center on the Mall

Posted by Anthony J. Coyne February 15, 2009 05:01AM

Categories: Opinion

Coyne is chairman of the Cleveland Planning Commission and has served on the commission for more than 17 years.

 

Media coverage of the convention center and medical mart prompts me to clarify recent history. I cannot overemphasize that the discussion of the Mall's central role in Cleveland's future has been extensive and public. Unfortunately, the comprehensive due diligence of many people has been recast as an 11th hour, back-room bargain.

 

 

During the White administration, the Planning Commission publicly evaluated various sites in Cleveland concerning investment in its Convention Center infrastructure. The meetings were followed by few in the press. We concluded the Mall site was worth reinvestment, given its history and centrality. About then, the Cleveland school district's infrastructure problems understandably became more of a focal point for the White administration...

Better late then never. The GCP "selection" Committee was and is a well recognized attempt at shuck and jive. 

thought this would be a great historic read for those interested in the mall site location. it is a very comprehensive look at the historic make up of the burnham plan.

http://groupplan.dhellison.com/buildings.php

 

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I liked the subtle jabs in Coyne's opinion piece

I had tried to find the report on the City of Cleveland website months ago. I guess they pulled it because they felt it lacked relevance. I would still like to see it. I bet it makes interesting reading. I wish Mr. Coyne would have come forward before this, but I'm not going to look a gift horse...

Great find...  Now if the PD was in any way a responsible and/or respectable publication we should expect some kind of correction/retraction right???

OUCH!! This is the second time in as many weeks the Commissioners have called out the PeeDee on false stories. I don't read it for factual news, but for entertainment. Kudos to this thread. We know more and are faster than the PeeDee.

The convention center and the ownership question: A look at a deal in the making

Posted by Steven Litt / Plain Dealer Architecture Critic

February 16, 2009 14:27PM

 

Public-private partnerships have been used to pay for major urban developments in Cleveland since the 1980s, sometimes with mixed results.

 

For example, The Plain Dealer's editorial page stated in 2000 that a Cuyahoga County excise tax on tobacco and alcoholic beverages didn't cover the cost of building the $470 million Gateway sports complex, leaving the project with long-term debt. Overruns totaled $126 million...

 

http://blog.cleveland.com/architecture/2009/02/the_convention_center_and_the.html

 

 

 

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I found the article on the cuyahoga county planning commision weblog.  I always forget the address, so I google "cuyahoga blog" and it pops up first.  It is a GREAT resource, and I think it is run by a UOer, but I am not sure.

Another somewhat smarmy article about the MM/CC in Scene.  Is it another PD take on the meeting last week?

 

http://www.freetimes.com/stories/15/94/youre-not-in-camelot-anymore-mr-kennedy

You're Not In Camelot Anymore, Mr. Kennedy

Medical Mart Purveyor Steers Clear Of Cleveland's Slow-in-coming Due Diligence

By Dan Harkins And Anastasia Pantsios

 

Like so many other big decisions in Cleveland, something major happened behind closed doors.

 

For months on end, the general consensus was trending toward putting the proposed convention center/medical mart complex on Forest City Enterprises' cramped plot behind Tower City. A study from the Greater Cleveland Partnership, housed conveniently at Tower City, came out in August with the site at the top of the heap, claiming it would be too costly to remedy foundation problems at the existing convention center site.

 

But on January 22, the county commissioners became emboldened by a new study from Merchandise Mart Properties Inc., and suddenly Tower City was out. Plan B on Mall B, the site of the current convention center, was a go. They claim the site change, with a special new foundation as well, would cost around $50 million less.

 

The sudden about-face creased many brows. On Thursday, February 12, Cleveland City Council held a hearing to put many of those questions to MMPI president Chris Kennedy, who claimed he was "agnostic" about site selection. Kennedy also made it clear that his company was in charge here, damn it.

 

"We'd be the manager of this facility, and as manager of this facility, we'd operate it, we'd take the risks and we'd take the rewards," Kennedy told council members.

 

What risks? An early memorandum of understanding shows MMPI receiving between $5 million and $8 million a year to operate the facility, even though the deal between MMPI and the county gives MMPI ownership - an arrangement that conveniently allows the county to avoid competitive bidding.

 

The Mall B site is largely owned by the city, which undoubtedly will be called upon to unload it cheaply for the greater good. The company, through the county, also plans to ask for property taxes to be waived on the $425 million development - a $2 million-a-year present. And don't forget: Taxpayers are footing the entire bill, as well as interest on the bonds that is expected to make the project cost nearly a billion dollars when all is said and done. MMPI's cost: maybe $20 million. Some risk.

 

Kennedy was evasive when confronted with specific questions from council members, which were limited to less than a third of the three-hour hearing. Nearly two hours were consumed by a self-aggrandizing, 300-slide PowerPoint presentation, much of which merely restated the company's prominence in the field. The second half dealt with the chronology of events and the various engineering permutations (appropriately dubbed "schemes") that brought the company to its current Mall B selection.

 

Kennedy predicted the creation of about 5,000 jobs, with an estimated 50 trade shows (10 percent of the market share) and 100 new conferences (6 percent), generating close to a billion dollars in new economic activity(!).

 

Council President Martin Sweeney openly gushed about the prospects Kennedy presented. Then he actually tried to get details about land-acquisition costs. Kennedy, who'd begun his spiel with the assertion that he's "more than open to any insight or suggestion you might have," soon motioned to the news cameras in the room and added, "Whether we want negotiations on television is something else."

 

Sweeney, effectively scolded, called upon his loyal majority on council. Most of the questions were softballs, but some had bite, appearing to catch Kennedy off-guard, evasive and more than a tad dickish.

 

When Ward 4 Councilman Ken Johnson, chairman of the parks committee, pushed Kennedy on where he got a $17 million figure for land acquisition at the current Mall B site, Kennedy ultimately became flustered: "What I'm saying, for the fourth time, is that we went with the Greater Cleveland Partnership input. Please do not attribute those numbers to us."

 

Johnson also asked him about reports that MMPI's profitability was suffering. Kennedy's pink face turned red, deflecting the question with generalities.

 

Ward 8 Councilwoman Sabra Pierce Scott asked about rumors that MMPI could back out as late as August. Kennedy said, "If there was an indication that nobody wanted to come to Cleveland, I don't know why we'd want to continue." In courtroom dramas, lawyers call answers like that "unresponsive."

 

Kennedy was surprisingly stymied by questions from downtown Councilman Joe Cimperman, who in no way could be called an opponent of the project. When he asked Kennedy whether MMPI had a nonprofit wing, or whether the project had to be a for-profit venture, Kennedy claimed he didn't know. When Cimperman asked whether the project would pay property taxes, Kennedy said, "If there were property taxes, what we can afford to build will change." Then Cimperman let it all come out: "Is there any other market where public financing is where it is here?" Kennedy responded irrelevantly and evasively: "There's no trade-show operation in the United States without public subsidy."

 

Cimperman did get a promise from Kennedy that the county or city wouldn't be responsible for any project cost overruns, but Kennedy made it clear he wasn't ready to negotiate in public. And when Ward 16 Councilman Kevin Kelley asked Kennedy, point-blank, to confirm reports in The Plain Dealer that MMPI would own the facility, Kennedy only acknowledged that the company would be "the beneficiary."

 

As Sweeney tried to wrap up, several council members outside Sweeney's majority and known for more rigorous due diligence couldn't contain their disgust. North Collinwood's Mike Polensek, who urged Sweeney a year ago to bring council into the negotiations, butted in. The taxpayers got the short end of the stick on the Gateway and Browns Stadium projects, said Polensek, and now council is "trying to get on the caboose after the train has left the station."

 

Ward 17 Councilman Matt Zone, Sweeney's most outspoken foe, added, "I have a whole list of questions here, but I didn't have an opportunity to ask them because of the way this committee meeting unfolded." Later, Zone called Sweeney "intellectually challenged."

 

Polensek says this could be an opportunity to create a true "civic center," similar to Chicago's Millenium Park, that's tied to the lakefront and becomes a destination of its own. It's in the city's best interest to hold a lease over MMPI's heads, he says, and become a planning partner.

 

"This was Kennedy trotting out his show wagon again," he says. "And we've heard it. We know you're an outstanding company. How many times are we going to see this again? What about the issue of governance? Is this going to be lease or a sale? That's what people want to know now. This town is at a crossroads, so we can't afford to continue to make bad decisions. If we give them this property without any strings attached, that's a serious mistake. Do I want to see the existing convention center renovated? Of course. Do I find the Kennedy proposal intriguing? Finally after all these years, we have an opportunity to resurrect the convention center. So yes.

 

But let's not get caught up in the euphoria. MMPI is getting all the profits and they're obviously putting very little of their own money into it."

 

It all sounds so familiar.

 

 

Scene does good writing but their positions are often just contrarian.  Projects like this need large incentive packages.  If cities stopped competing so much, there would be less cost of competition and more essential local services for everyone.

They report that "Councilman Joe Cimperman, who in no way could be called an opponent of the project" but he could be call a proponent of FCE's TC site. Jim McCafferty said it best "selective reporting".

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Scene has sucked ever since it was sold and is no longer locally owned.

OK, I guess this could be considered "news"... however, I would probably guess that there is another reason this article made front page.  Is it me, or does it seem like this publication is trying its hardest to thwart this project altogether, if not the site plan?

 

Med mart bonds cost millions more with private company

Posted by dsims February 21, 2009 09:25AM

 

 

Cuyahoga County stands to pay tens of millions of dollars in extra finance charges because a private company would own and operate the proposed $425 million medical mart and convention center complex.

 

The arrangement with Chicago-based Merchandise Mart Properties Inc. could cost the county about $75 million, said Jim Swan, managing director at New Jersey-based Bergen Capital, a firm that specializes in bond financing.

 

Fred Nance, an attorney for Squire Sanders & Dempsey who is representing the county in the medical mart deal, acknowledged the ownership structure will cost the county more. But he said the sacrifice is worthwhile...

 

http://blog.cleveland.com/metro/2009/02/med_mart_bonds_cost_millions_m.html

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Where were these articles when TC was in the lead?

FCE subsidiary the PD is now hell bent to kill this project.

Where were these articles when TC was in the lead?

FCE subsidiary the PD is now hell bent to kill this project.

 

So it would seem.

regardless, they have valid points that need to be addressed.

regardless, they have valid points that need to be addressed.

 

I agree.

The strategy is death by a thousand cuts. If they do not get this done with all due haste, you can stick a fork in it. There has still not been any meaningful discussions with the City of Cleveland and Ol'Frank.

^damn you beat me by seconds

 

The peedee continues its assault on the MM/CC. Posted below is just the headline and teaser from the front page. I wont even post the whole article because its a waste of space. The link is below if you need something to read in the bathroom.

 

How would you spend $500 million in taxpayer money?

Posted by Robert L. Smith/Plain Dealer Reporter February 22, 2009 04:30AM

 

Professional planners note the new convention center project's budget about covers the cost of the Opportunity Corridor and the West Shoreway projects. Economists suggest that kind of money could be used to lure new companies in growing industries.

 

http://blog.cleveland.com/metro/2009/02/how_would_you_spend_500_millio.html

 

^This really has gotten comical.  First (and justificably so) it was constant ridicule over the inability to select a site.  Then, it moved on to criticisms of the site selection.  Now, it is criticism over the contract. 

 

^This really has gotten comical.  First (and justificably so) it was constant ridicule over the inability to select a site.  Then, it moved on to criticisms of the site selection.  Now, it is criticism over the contract. 

 

 

It's not comical it's pathetic and the general Plain Dealer reader will fall right into this trap, bring up every other project that didn't pan out (ie the stadium and HL) the way they envisioned and then blame it ALL on our current Mayor.

Until the lawyers hammer out the deal with the county; Until the CITY of Cleveland enters into good faith negotiations with MMPI, this is not going to move forward. Frank, Joe and Sabrina have publicly stated that the Forest City Site was their preference. Let's see where their loyalty lies, with the citizens of Cleveland or to their campaign coffers. MMPI and the county better get busy. It is stall and delay until the thousand cuts take their cumulative effect. Putting the heat to them in this election year is the only way to move them off the dime. This roller coaster ride has lasted much too long for a project that has been dubbed imperative to the regions future. Where is the leadership?? 

Zero leadership, when our region desperately needs it.

Zero leadership, when our region desperately needs it.

 

Perfect example of my previous post.  Can you further explain what you mean?

Until the lawyers hammer out the deal with the county; Until the CITY of Cleveland enters into good faith negotiations with MMPI, this is not going to move forward. Frank, Joe and Sabrina have publicly stated that the Forest City Site was their preference. Let's see where their loyalty lies, with the citizens of Cleveland or to their campaign coffers. MMPI and the county better get busy. It is stall and delay until the thousand cuts take their cumulative effect. Putting the heat to them in this election year is the only way to move them off the dime. This roller coaster ride has lasted much too long for a project that has been dubbed imperative to the regions future. Where is the leadership?? 

 

I can't say that I disagree. Frank has said he prefers TC, but at the same time he has said he wants what best for the city in the sale of convention center.

 

I would say the same thing as that is exactly what has to happen.

 

 

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