I think there's a lot more going on here.  I'm suspicious that these retaurant owners were set up to be embarassed like this. 

^ Like what?

I think there's a lot more going on here.  I'm suspicious that these retaurant owners were set up to be embarassed like this. 

 

As in somebody actually looked at the owners of Mohogany to determine if they are a credit risk? Prior to shelling out a million dollars maybe it is a good idea

to vet someone. These people probably can't qualify for a mortgage.

 

 

Cincinnati City Council approves $1M incentive for Mahogany's

Business Courier by Lucy May, Senior Staff Reporter/Associate Editor

Date: Wednesday, February 29, 2012, 2:59pm EST - Last Modified: Wednesday, February 29, 2012, 3:42pm EST

 

Cincinnati City Council today approved an incentive package of nearly $1 million to help Hamilton-based Mahogany’s Cafe & Grill open a new location at The Banks riverfront development.

 

Council voted 6-3 to approve a grant of $684,000 to be used for the design and construction of the restaurant space. Council also voted 6-3 to grant a loan of $300,000 for the purchase of furniture, fixtures and equipment for the restaurant. Dissenting votes came from council members Chris Seelbach, Christopher Smitherman and Vice Mayor Roxanne Qualls.

 

http://www.bizjournals.com/cincinnati/news/2012/02/29/cincinnati-city-council-approves-1m.html

 

 

I'm surprised to see Sittenfeld went along with this.

 

It would have been interesting if voting had been along racial lines, but I'm glad that didn't happen.

 

Other interesting votes are Winburn's and Smitherman's. The head of the NAACP voted against the endorsed position of the African American Chamber of Commerce, and the most right-wing councilman sided on the more fiscally reckless side against Qualls and Seelbach, two solidly liberal councilmembers.

Anyone remember the LaShawn Pettus Brown fiasco? Sometimes good intentions are simply not good enough, especially when the city is facing such major budget issues.  I'm about as far as you can get from a Tea Party supporter, but this seems like truly wreckless spending.  Small businesses and minorities should be encouraged to open at the Banks, both to foster a unique environment at the Banks, and also for inclusion purposes.  That said, I think the city has set a really bad precedent by basically giving a restaurant $1 million.  How did this restaurant even get chosen to be at the Banks, was that a transparent process? This whole situation really irks me.

I'm surprised to see Sittenfeld went along with this.

 

It doesn't surprise me at all to see Sittenfeld sway with the majority. No one who voted for this will be able to run on a platform of financial accountability. I'm glad Seelbach was in the opposition.

 

Not that Enquirer polls matter, but right now the question "Do you think City Council should have approved financing for Mahogany's to open at The Banks?" is 241 No to 24 Yes - that's 9 to 1 against

 

Comments from a few young FB friends (of various races) who run businesses/work in the basin:

 

"Get in line down at City Hall, they are giving money away. 5% down can't even buy you a house"

 

"Holy S#%t! Where's my $900,000? I mean...wow!"

 

"Thanks to Chris Seelbach, Smitherman and Qualls for standing up for what is right and responsible. Not sure what is wrong with the other members that voted for this, blatant disregard for what is right. I give it two years tops."

 

"I don't think it is a good move either. Restaurants are notoriously bad investments"

 

A subprime loan is bad enough but a grant? Doesn't seem very prudent especially in this budget environment.

 

From the Enquirer article:

 

Councilman Chris Smitherman said he was disappointed the city did not share the delinquent tax issues.

 

“It’s opened up a whole new can of worms,” he said.

 

Under the deal with the city, the Rogers must invest at least $50,000 into the restaurant’s interior space before they can access city dollars. The couple is personally guaranteeing the loan, which will be secured with the mortgage on their Hamilton restaurant as well as life insurance policies that list the city as the beneficiary to the extent of covering the remaining loan balance.

Anyone remember the LaShawn Pettus Brown fiasco? Sometimes good intentions are simply not good enough, especially when the city is facing such major budget issues.  I'm about as far as you can get from a Tea Party supporter, but this seems like truly wreckless spending.  Small businesses and minorities should be encouraged to open at the Banks, both to foster a unique environment at the Banks, and also for inclusion purposes.  That said, I think the city has set a really bad precedent by basically giving a restaurant $1 million.  How did this restaurant even get chosen to be at the Banks, was that a transparent process? This whole situation really irks me.

How are the two related?

Anyone remember the LaShawn Pettus Brown fiasco? Sometimes good intentions are simply not good enough, especially when the city is facing such major budget issues.  I'm about as far as you can get from a Tea Party supporter, but this seems like truly wreckless spending.  Small businesses and minorities should be encouraged to open at the Banks, both to foster a unique environment at the Banks, and also for inclusion purposes.  That said, I think the city has set a really bad precedent by basically giving a restaurant $1 million.  How did this restaurant even get chosen to be at the Banks, was that a transparent process? This whole situation really irks me.

How are the two related?

 

The city basically giving away money for what was supposed to be a great project is, and ending up completely losing that money. 

 

For the record, I'm n ot saying the owners of Mahogany are going to embezzle the money like LPB did

50% of the tax break breaks given to companies in the city never came true. So tax payers lost millions. How is this different?

I hope you would understand the difference between a tax break and a grant/donation.  Flawed or not, those incentives are tied to job creation and growth, and if those goals are not met, there are penalties (see the recent Convergys payment for breaking their terms of agreement).

Money is money how ever you break it down. It seems most people don't want anything to succeed in this city. Everything minority owned is put under a microscope.

I have a lot of trust in Milton Dohoney. Ever since he's been in cincinnati I have noticed the quality of his decision making. If he says it's the right choice I'll tend to give him the benefit of the doubt. His sticking his neck out is meaningful.

^Good point.  I think Doheny is great, and I honestly do think that Mahogany will do really well at The Banks.  I just don't like the precedent this creates for the future, and the way this all came about just make it a big PR black eye for the city. 

I hope you would understand the difference between a tax break and a grant/donation.  Flawed or not, those incentives are tied to job creation and growth, and if those goals are not met, there are penalties (see the recent Convergys payment for breaking their terms of agreement).

 

Although a state audit recently said 50% of all broken tax incentive deals had 0 punishments.  Even if they were written into the deal, it's VERY rare for a municipality to use a clawback.  Hell, Convergys had been "off" it's mark for over 3 years, but the City only went after them this year to close a deficit.

 

I think the loan is fine-  I'm mixed on the grant but whatever.  The most important part is that I hope they do well.  REALLY well.

I hope you would understand the difference between a tax break and a grant/donation.  Flawed or not, those incentives are tied to job creation and growth, and if those goals are not met, there are penalties (see the recent Convergys payment for breaking their terms of agreement).

 

Although a state audit recently said 50% of all broken tax incentive deals had 0 punishments.  Even if they were written into the deal, it's VERY rare for a municipality to use a clawback.  Hell, Convergys had been "off" it's mark for over 3 years, but the City only went after them this year to close a deficit.

 

I think the loan is fine-  I'm mixed on the grant but whatever.  The most important part is that I hope they do well.  REALLY well.

 

Tax incentives are not loans or grants. A taxing authority agrees to lower, usually payroll taxes, on new hires or retaining employees.

No logical reason to do this deal with Mohogany.

I have a lot of trust in Milton Dohoney. Ever since he's been in cincinnati I have noticed the quality of his decision making. If he says it's the right choice I'll tend to give him the benefit of the doubt. His sticking his neck out is meaningful.

 

I agree 100%.

I hope you would understand the difference between a tax break and a grant/donation.  Flawed or not, those incentives are tied to job creation and growth, and if those goals are not met, there are penalties (see the recent Convergys payment for breaking their terms of agreement).

 

Although a state audit recently said 50% of all broken tax incentive deals had 0 punishments.  Even if they were written into the deal, it's VERY rare for a municipality to use a clawback.  Hell, Convergys had been "off" it's mark for over 3 years, but the City only went after them this year to close a deficit.

 

I think the loan is fine-  I'm mixed on the grant but whatever.  The most important part is that I hope they do well.  REALLY well.

 

Tax incentives are not loans or grants. A taxing authority agrees to lower, usually payroll taxes, on new hires or retaining employees.

No logical reason to do this deal with Mohogany.

 

you do realize that 5.5 million dollars went to Toby Keith's right?  And that the entire Banks private development was heavily backed with millions and millions of public money.  Hell- On the Toby Keith deal, I read that the City is 3rd in line if the loan recipient defaults.  $300,000 was a loan just like any other.  It is backed with $300,000 in collateral including their property in Hamilton which is valued over $200,000. 

 

The grant we can of course argue over, but the rest is just another deal.

 

 

and not all corporate deals are exclusively property tax based- earnings and income tax breaks are used often as well.  Or you know, there are things like the City giving a building or land away for free to a private company so they build on it.  That land likely had value.  Value WAY beyond $600,000. 

I hope you would understand the difference between a tax break and a grant/donation.  Flawed or not, those incentives are tied to job creation and growth, and if those goals are not met, there are penalties (see the recent Convergys payment for breaking their terms of agreement).

 

Although a state audit recently said 50% of all broken tax incentive deals had 0 punishments.  Even if they were written into the deal, it's VERY rare for a municipality to use a clawback.  Hell, Convergys had been "off" it's mark for over 3 years, but the City only went after them this year to close a deficit.

 

I think the loan is fine-  I'm mixed on the grant but whatever.  The most important part is that I hope they do well.  REALLY well.

 

Tax incentives are not loans or grants. A taxing authority agrees to lower, usually payroll taxes, on new hires or retaining employees.

No logical reason to do this deal with Mohogany.

 

I know this sounds crazy to someone sensitive to opaque politics and liberal urban bias, but some small maneuvers like this grant are, in my opinion, a sign of leadership. The administration has a vision and makes it happen. This is why we have executives. This is why Cincinnati is getting a streetcar. It's why Chicago got Millennium Park.

 

The city is a development partner in the banks and their vision for the area is culture and entertainment. Getting this particular restaurant in there strikes them as a good fit for this vision, so they are making it happen. Just because this particular maneuver makes you uncomfortable doesn't mean it's bad leadership.

 

Private developers often give good deals to early and high profile tenants in order to get a project off the ground.  The same people who say government should be run like a business hate it when it is. 

Let's be honest, this would not be the big fuss it's been converted into if the restaurant wasn't black owned.  I don't know how many times unusualfire and others, most recently CincyGuy45202, have brought up Toby Keith and his 5.5 mil, but somehow we keep coming back to how unfair the Mahogany money is.  It's really disappointing to witness people refusing to accept the facts of life, which is that all businesspeople need help, and all businesspeople make financial mistakes.  Just don't be black while you're doing it, and don't be the City of Cincinnati if you were thinking of extending yourself in exchange for a large public benefit down the road.

I know this sounds crazy to someone sensitive to opaque politics and liberal urban bias, but some small maneuvers like this grant are, in my opinion, a sign of leadership. The administration has a vision and makes it happen. This is why we have executives. This is why Cincinnati is getting a streetcar. It's why Chicago got Millennium Park.

 

The city is a development partner in the banks and their vision for the area is culture and entertainment. Getting this particular restaurant in there strikes them as a good fit for this vision, so they are making it happen. Just because this particular maneuver makes you uncomfortable doesn't mean it's bad leadership.

 

 

I like Mallory and Doheny particularly for these reasons, most of the time.  They relentlessly pursue their vision for Cincinnati, and make every effort to plow through the political muck to make their vision a reality.  However one thing this administration has not done well is PR and selling their vision to the region.  The city should have issued a press release when this issue first came to light saying that the city is a development partner  at The Banks, and then citing other examples of cities underwriting similar situations (assuming such situations exist).  Public perception is important, and the more often these type of situations pop up, the more irrational and undue scrutiny will be placed on all other projects.  Following through on a vision is admirable, but you have to make sure that the public understands the vision and the logic behind decisions such as these.

 

I still contest that the grant was not a prudent use of money.  A low or no interest loan is certainly appropriate, but to simply make a $600,000 grant to one business, with no expectation of repayment or any stipulations regarding growth, seems short sighted and irresponsible.  The City has every right to influence the tenants that are in The Banks, because as you stated, they are technically a development partner.  However, imo, the City should not be advocating for a particular business, in a closed, private matter.  If the administration had put out a request for proposals to local/minority owned restaurants, and Mahogany came out as the best option, that would be a more transparent and fair use of public money.  The way this went down, it seems that Mahogany was selected seemingly at random, and that it is fulfilling a particular, personal vision for what The Banks should be.  The down side of efficiency and persistence can be the loss of some of the democratic processes that we are owed and should expect, Robert Moses serving as the most drastic example of this.

This situation immediately puts Mahogany's at an additional disadvantage. It's important that the Banks be inclusive and diverse - and it does say something that Dohoney backed the project - but there had to have been other, more qualified (and well known) black run businesses to lure to the Banks than Mahogany's, right? Moreover, the optics of the deal are horrible. Let's hope this is the end of the drama and Mahogany's does well.

Tax incentives are not loans or grants. A taxing authority agrees to lower, usually payroll taxes, on new hires or retaining employees.

No logical reason to do this deal with Mohogany.

 

Yeah, tax incentives are far less effective than loans or grants.  Let's think about it for a moment.

 

What do you get when you give someone money?  Well, you get whatever you pay for.  The loan or grant is characterized by the fixed amount you are transferring, as well as the fixed number of recipients.

 

A tax incentive has no fixed number of recipients, or at least a highly variable one.  the mortgage deduction, for example, and how much federal tax revenue is foregone because of it, depends on how many individuals choose to engage in the activity that qualifies for the deduction.

 

So as an attempt to influence economic behavior, tax incentives are less effective than direct payments, because the amount being expended can easily be over or under shot.

 

Now, of course a City's tax incentives are typically targeted to a specific company, in which case, they would function almost identically to a grant or loan, although tax incentives are only good if you have tax liability.  Oftentimes people trying to start restaurants have a year or two of initial unprofitability in their business plans because they understand it takes time to develop a customer base.  If your tax credits aren't transferable to a later taxable year, what good are they for the business owner in this scenario.

 

Private developers often give good deals to early and high profile tenants in order to get a project off the ground.  The same people who say government should be run like a business hate it when it is.

 

Exactly.  Plenty of examples abound-look at "first months rent free" incentives from large residential rental developments.  These types of private deals don't pan out all the time.  Look at the unfinished hulk at the north end of Kenwood Mall.

This situation immediately puts Mahogany's at an additional disadvantage. It's important that the Banks be inclusive and diverse - and it does say something that Dohoney backed the project - but there had to have been other, more qualified (and well known) black run businesses to lure to the Banks than Mahogany's, right? Moreover, the optics of the deal are horrible. Let's hope this is the end of the drama and Mahogany's does well.

 

This is exactly right - though I would have no idea about whether there "had to be" better qualified businesses.  Better qualified is a term that takes in a lot of things beyond the bank account. 

 

If over the next decade OTR and the Banks become white playgrounds then this is a disaster for Cincinnati.  The City is certainly right in making it a priority to lure businesses - and spend money to do it - to try and engage the sizable black population who seem to have given up on the City.  Good soul food sounds like a reasonable prescription to me. 

I haven't seen any source showing what money other restaurants at the Banks have gotten.  Can anyone produce one? Even if there were other handouts, the recipients were not in debt to the government already, as Mahogany's owners are.  I don't mind loans at all, that's a respectable business move on the cities part, the grants aren't, however.

 

I don't see how anyone can defend a grant like this.  There is no shortage of restaurants wanting to locate around downtown, and The Banks has comparable rents and much, much better amenities than any other location downtown.  The city doesn't need to pay anyone to attract them to the space, and they shouldn't feel a need to manipulate the market to shape the final clientele. 

Well honestly. Mahogany it's self is not in debt. All they need to do is go incorporated. Then no past dealing would come to play since Mahogany itself would be it's own entity. The owner of prior businesses could have been an LCC or sole proprietor which is what the enquirer has shown. Too many legal issues to even go into. Not my expertise.

Governments should stick to doing things the market cannot. Like building a streetcar, or leading the redevelopment of a flood-prone riverfront.  Giving money to restaurants is simply bad governance.

 

A (minor) misstep from the current administration.

To put this in persepctive, of the recent new business in the Gateway Quarter, I have personally known some of the business owners for 10+ years, including one since high school.  In all cases, they were able to get startup capital outside of banks, which means from their wealthy families.  The guy I went to high school with even has a criminal record -- something that would doom him to a life of menial labor if not for his wealthy family.

 

These days few people are getting loans, fair and square, for restaurants.  So if you want to start a restaurant, you pretty much need family money or help from the government.  As I mentioned a week ago, hardly any black Americans have family money to borrow, so if you believe that minority-owned businesses should be a part of the riverfront, that means government money. 

 

 

To put this in persepctive, of the recent new business in the Gateway Quarter, I have personally known some of the business owners for 10+ years, including one since high school.  In all cases, they were able to get startup capital outside of banks, which means from their wealthy families.  The guy I went to high school with even has a criminal record -- something that would doom him to a life of menial labor if not for his wealthy family.

 

These days few people are getting loans, fair and square, for restaurants.  So if you want to start a restaurant, you pretty much need family money or help from the government.  As I mentioned a week ago, hardly any black Americans have family money to borrow, so if you believe that minority-owned businesses should be a part of the riverfront, that means government money. 

 

 

I can name a dozen or so Asian restaurant that have started without family money and without government handouts, and I know the owners personally and know that they managed to startup by being fiscally sound.  It is possible to start a business without 100% financing and without parents support.

 

As for this particular case, I'm fine with the city seeking out minority owned businesses and offering low interest loans.  I oppose giving out grants, however.  That money can never be recouped and there's no way to measure the ROI.  I also wish the city would be more careful in vetting out potential loan recipients.  I'm sure there are plenty of black Cincinnatians who could run a restaurant that don't owe over $50,000 in backed taxes. 

 

While we're on the subject of minority owned restaurants, let's hope the city seeks out some Asian, Indian, or Middle Eastern food for The Banks.  Like most people in Cincy, I can cook soul food at home no problem, I'd prefer the city attract something a bit more in-demand.

Let's be honest, this would not be the big fuss it's been converted into if the restaurant wasn't black owned.  I don't know how many times unusualfire and others, most recently CincyGuy45202, have brought up Toby Keith and his 5.5 mil, but somehow we keep coming back to how unfair the Mahogany money is.  It's really disappointing to witness people refusing to accept the facts of life, which is that all businesspeople need help, and all businesspeople make financial mistakes.  Just don't be black while you're doing it, and don't be the City of Cincinnati if you were thinking of extending yourself in exchange for a large public benefit down the road.

 

Why do you continually play the race card?  I would have had no idea Mohagany was even a minority owned business had it not been mentioned in the article.  I think the restaurant sounds awesome and a place I'd enjoy, but that has nothing to do with it.  I just don't understand why the city is giving them a grant.  That is prime real estate and they should be able to draw businesses in without giving grants.

 

I don't follow or post on this board as much as you all so I don't recall the Toby Keith discussion, but I'd be upset if they gave them a grant as well.  I'm not entirely happy about the loan that was mentioned for them either. Why aren't banks giving these loans?

 

As for the vote, wasn't Seelbach the one quoted in the first article about Mohagany's coming to the Banks as being the guy who did the analysis and determined it was a good investment?  Or am I thinking of someone else?

Ram2, starting a Chinese restaurant in an old strip mall with reused furniture, kitchen equipment, and a hodge-podge of flea-market "Chinese" decorations on the wall is entirely different than starting an upscale restaurant in a high profile location. 

And please show me one soul food restaurant in Cincinnati city limits that is "high demand" to begin with. There isn't.  I'm not talking Alabama's, Ritchie's, or Sister's.  As an aside from the grant discussion, moderate-to-upscale African-American restaurants in Cincinnati is damn-near nonexistent.  The same cannot be said for Asian (pick one on the eastside), Indian (pick one in Clifton), or Middle Eastern (Andy's) in the city. 

Ram2, starting a Chinese restaurant in an old strip mall with reused furniture, kitchen equipment, and a hodge-podge of flea-market "Chinese" decorations on the wall is entirely different than starting an upscale restaurant in a high profile location. 

 

That's not the type of place I'm talking about.  I won't name names, but they're more upscale than you're typical take out place.  A few of them would be right at home in The Banks, actually.  Some successful restaurant owners start off with cheap places like that, and later on in their careers opened up much higher scale places.  It's possible to build successful businesses that way.  What huge city grants like this do is usurp that in the same way having a rich family does, only it uses taxpayer dollars instead of inheritance.  Personally, I don't like either of those because there's no way it'd ever be possible for me.

 

Governments should stick to doing things the market cannot. Like building a streetcar, or leading the redevelopment of a flood-prone riverfront.  Giving money to restaurants is simply bad governance.

 

The problem with this argument is that "bad governance" which, in this example is defined as "giving money to restaurants", is in fact a natural outgrowth of "leading the redevelopment of a flood-prone riverfront".  What's the point of the massive subsidies used to create the buildings in the Banks if you don't have any tenants?

 

Also, think about how small this loan is relative to the loans and subsidies used to create all other aspects of the Banks.  Isn't it a bit counter-intuitive to argue that the more money the government spends on a given item, the less likely the expenditure constitutes "bad governance"?

 

Ultimately the only objective standard for what's good or bad about a given project is how well the project accomplishes its purported purpose.  To be frank, I don't understand why Qualls is against this package but voted in favor of the $2.5 million event space at City Hall, or the virtual giveaway of the Kroger garage.  There might be good reasons for any of those things in the detail, but on the surface, they strike me as far more questionably profitable for the City than this venture.

 

Regarding race, the fact that Pettus-Brown was brought up is pretty indicative that such issues are never far from the surface.  Not talking about them doesn't make them go away.  We're all adults here.  Finally if Toby Keith's restaurant is getting a $5 million subsidy, I don't see why anyone who is truly bullish on local growth can object to a subsidy to help a local owner expand.

^this may be a "small loan" in terms of other subsidies at the Banks but I can tell you from personal experience that this is not small (the grant and loan) in connection with implementing the buildout and and start up of a 3500 square foot restaurant.  They are basically being given a restaurant (at very little risk to themselves I presume (not knowing the terms of the loan at this point)).  This makes no economic sense, especially given the signifcant number of dining facilities (some might say too many) already opening.

^this may be a "small loan" in terms of other subsidies at the Banks but I can tell you from personal experience that this is not small (the grant and loan) in connection with implementing the buildout and and start up of a 3500 square foot restaurant.  They are basically being given a restaurant (at very little risk to themselves I presume (not knowing the terms of the loan at this point)).  This makes no economic sense, especially given the signifcant number of dining facilities (some might say too many) already opening.

 

I did not know it was only 3500 square feet.  A nice restaurant can be built (from the ground up) for around $150 a square foot, $200 would be extremely upscale.  Mahogony's was given $684,000 which comes out to around $195 per square foot to finish out their space.  The city is basically paying for everything via the grant.  I guess the loan is for operating expenses.

As a taxpayer in the city, I am not happy that a private business is getting a $684k GRANT.  I understand that the amount is not necessarily huge, but come on, we are talking about ONE SINGLE restaurant.  Seems like a large sum to me.  It's not like we are giving a grant or tax break to lure an entire corporate HQ.

 

I'm okay with the loan portions, and would be okay with a $684k loan with VERY favorable terms, but a grant is pure LUNACY. 

 

Whats to stop them from quickly building the business into a a success and then selling out to a large restaurant group and taking all that FREE CITY INVESTMENT and taking it to the bank?  Let's just hand them the money and forgo the need to open the business.

 

I have read that the owners operate a restaurant in Hamilton.  Do they live in the city of Cincinnati at least?  If not, then I would be really suspect about why we are handing CITY TAXPAYER MONEY to someone under the guise of encouraging a "locally owned business". 

 

Something just isn't right about this whole deal.  The amount that they are personally investing versus the amount being risked BY THE TAXPAYER.  I need to know as a taxpayer that my investment will likely payoff.  I personally would NOT make this investment due to the GRANT amount involved. 

Let's be honest, this would not be the big fuss it's been converted into if the restaurant wasn't black owned.  I don't know how many times unusualfire and others, most recently CincyGuy45202, have brought up Toby Keith and his 5.5 mil, but somehow we keep coming back to how unfair the Mahogany money is.  It's really disappointing to witness people refusing to accept the facts of life, which is that all businesspeople need help, and all businesspeople make financial mistakes.  Just don't be black while you're doing it, and don't be the City of Cincinnati if you were thinking of extending yourself in exchange for a large public benefit down the road.

 

Why do you continually play the race card?  I would have had no idea Mohagany was even a minority owned business had it not been mentioned in the article.  I think the restaurant sounds awesome and a place I'd enjoy, but that has nothing to do with it.  I just don't understand why the city is giving them a grant.  That is prime real estate and they should be able to draw businesses in without giving grants.

 

I don't follow or post on this board as much as you all so I don't recall the Toby Keith discussion, but I'd be upset if they gave them a grant as well.  I'm not entirely happy about the loan that was mentioned for them either. Why aren't banks giving these loans?

 

As for the vote, wasn't Seelbach the one quoted in the first article about Mohagany's coming to the Banks as being the guy who did the analysis and determined it was a good investment?  Or am I thinking of someone else?

 

The concept of "race card" is authoritarian in itself.  It's the act of telling someone else how to feel about the emotional and social ramifications of a set of experiences that have educated them on where they stand in society.  Falsifying their account of an incident without properly considering the realities of ethnics in the 21st, 20th, 19th centuries, etc.  If you're a member of the majority applying the race card concept to an argument created by a minority, you're promoting bigotry, the father of racism.  If you're a minority applying the concept to anyone, you're fighting for racism.

 

As for the loans, I think both Toby's and Mahogany's will take off, sounds like Toby's already has, so that's good for Cincinnati.  People on the riverfront is a sticking point for Americans.  We want to see vibrancy on the water, and many cities don't have it, including many of Cincinnati's market competitors like St. Louis.  I want to see the Banks be a repopulating force in the core because what living close to it means, not because who got what financial assistance.  The 600 large Mahogany's received was mostly for jumpstart, long-term infrastructure.  Not willing to go to fiscally irresponsible just yet on it.

^this may be a "small loan" in terms of other subsidies at the Banks but I can tell you from personal experience that this is not small (the grant and loan) in connection with implementing the buildout and and start up of a 3500 square foot restaurant.  They are basically being given a restaurant (at very little risk to themselves I presume (not knowing the terms of the loan at this point)).  This makes no economic sense, especially given the signifcant number of dining facilities (some might say too many) already opening.

 

I did not know it was only 3500 square feet.  A nice restaurant can be built (from the ground up) for around $150 a square foot, $200 would be extremely upscale.  Mahogony's was given $684,000 which comes out to around $195 per square foot to finish out their space.  The city is basically paying for everything via the grant.  I guess the loan is for operating expenses.

 

Correct you are.

I lease Commercial RE for a living. The TI and FFE loan and grant the city is giving up is off of the charts bad.

I would have not loaned $$ for Toby Kieth either. The prime developer goes to their lender to get $$ for space improvements, if the Tenant has

credit and solid P/L statements of course. The Tenant Improvement $$ are amortized in the rental rate and the term of the lease.

Of course the City played lender on this deal, very stupid.

The grant $$ is equal to about 10 years of free rent. Epic fail by the city.

 

Let's be honest, this would not be the big fuss it's been converted into if the restaurant wasn't black owned.  I don't know how many times unusualfire and others, most recently CincyGuy45202, have brought up Toby Keith and his 5.5 mil, but somehow we keep coming back to how unfair the Mahogany money is.  It's really disappointing to witness people refusing to accept the facts of life, which is that all businesspeople need help, and all businesspeople make financial mistakes.  Just don't be black while you're doing it, and don't be the City of Cincinnati if you were thinking of extending yourself in exchange for a large public benefit down the road.

 

Why do you continually play the race card?  I would have had no idea Mohagany was even a minority owned business had it not been mentioned in the article.  I think the restaurant sounds awesome and a place I'd enjoy, but that has nothing to do with it.  I just don't understand why the city is giving them a grant.  That is prime real estate and they should be able to draw businesses in without giving grants.

 

I don't follow or post on this board as much as you all so I don't recall the Toby Keith discussion, but I'd be upset if they gave them a grant as well.  I'm not entirely happy about the loan that was mentioned for them either. Why aren't banks giving these loans?

 

As for the vote, wasn't Seelbach the one quoted in the first article about Mohagany's coming to the Banks as being the guy who did the analysis and determined it was a good investment?  Or am I thinking of someone else?

 

The concept of "race card" is authoritarian in itself.  It's the act of telling someone else how to feel about the emotional and social ramifications of a set of experiences that have educated them on where they stand in society.  Falsifying their account of an incident without properly considering the realities of ethnics in the 21st, 20th, 19th centuries, etc.  If you're a member of the majority applying the race card concept to an argument created by a minority, you're promoting bigotry, the father of racism.  If you're a minority applying the concept to anyone, you're fighting for racism.

 

As for the loans, I think both Toby's and Mahogany's will take off, sounds like Toby's already has, so that's good for Cincinnati.  People on the riverfront is a sticking point for Americans.  We want to see vibrancy on the water, and many cities don't have it, including many of Cincinnati's market competitors like St. Louis.  I want to see the Banks be a repopulating force in the core because what living close to it means, not because who got what financial assistance.  The 600 large Mahogany's received was mostly for jumpstart, long-term infrastructure.  Not willing to go to fiscally irresponsible just yet on it.

 

not really sure what you're even talking about on the first paragraph, but whatever, I agree mostly with your second paragraph. Like I said, Mahogany's sounds really cool and hopefully it succeeds, but that really isn't the point.  Same with Toby Keith's.  It just surprises me that these incentives need to be offered at The Banks.  Especially grants.  I know bank financing is tight but they still will usually loan it out if they deem it a good investment.

So, Smitherman was just on Cunningham talking this issue.  Smitherman, of course, let everyone know that he is "a certified financial planner" (I've always been suspicious that he's swindling old people out of their money).

 

Meanwhile, Cunningham is a restaurant owner, albeit the totally unimaginative Willie's Sports Bar, which was once a mighty chain of four restaurants, but he now owns just one, I suspect to give his pothead son something to do.

 

Cunningham was running the numbers on what it takes to make a restaurant break even, leaving out these two rather obvious factors:

 

1. Restaurants on the banks will benefit from 100 events per year.  Some of those events will overlap already-busy Fri-Sat, but will boost sales on otherwise dead weeknights and Sundays. 

2. Mahogany's in Hamilton runs a catering business.  Presumably, the new restaurant will as well, perhaps bringing $100,000 in additional revenue per year over, say, Willie's Sports Bar.  Also, the catering at The Freedom Center is currently handled by B&B Riverboats.  I have witnessed in person the heated arguments between members of the Bernstein family and the Freedom Center people.  I have no doubt that the Freedom Center is sick of dealing with those people. 

 

Cunningham's restaurants are entirely sit-down -- there might be some carry-out, but there is no catering or delivery.  He stated on his show that "there are only a handful of restaurants in Cincinnati doing $50K per week".  Again, that is probably the case for sit-down non-chain restaurants.  Meanwhile, many pizza places are doing that kind of money on delivery alone. 

Also, the Museum's Center's takeover of the Freedom Center might mean the Freedom Center gets to escape their catering contract with B&B Riverboats, assuming there is a contract.  So if Mahogany's is in fact being lined up to take over the catering, that could explain some of the dust-up, since B&B was catering 3-4 events per week at The Freedom Center. 

More:

 

Smitherman explains vote against Mahogany's deal

Business Courier by Lucy May

 

Cincinnati City Council’s vote on the financial deal to help Mahogany’s Cafe & Grill open a second location at The Banks was about more than a nearly $1 million incentive package.

 

Council’s quick 6-3 vote Wednesday was the culmination of an angry community discussion centered on money, fairness and issues of race.

 

Mahogany’s was touted as the first minority-owned business to be located at The Banks, the prominent riverfront development that holds so much promise for the city. Its first location in Hamilton developed a loyal regional following after just a year in business.

 

Cont

There is more than one Willie's correct?  There is definitely one in Hidden Valley, IN.  Isn't there still one in Western Hills?  A quick google search says there are still 6.  Have all of these shut down except the one in Hidden Valley or are we talking different businesses here?

So, Smitherman was just on Cunningham talking this issue.  Smitherman, of course, let everyone know that he is "a certified financial planner" (I've always been suspicious that he's swindling old people out of their money).

 

Meanwhile, Cunningham is a restaurant owner, albeit the totally unimaginative Willie's Sports Bar, which was once a mighty chain of four restaurants, but he now owns just one, I suspect to give his pothead son something to do.

 

Cunningham was running the numbers on what it takes to make a restaurant break even, leaving out these two rather obvious factors:

 

1. Restaurants on the banks will benefit from 100 events per year.  Some of those events will overlap already-busy Fri-Sat, but will boost sales on otherwise dead weeknights and Sundays. 

2. Mahogany's in Hamilton runs a catering business.  Presumably, the new restaurant will as well, perhaps bringing $100,000 in additional revenue per year over, say, Willie's Sports Bar.  Also, the catering at The Freedom Center is currently handled by B&B Riverboats.  I have witnessed in person the heated arguments between members of the Bernstein family and the Freedom Center people.  I have no doubt that the Freedom Center is sick of dealing with those people. 

 

Cunningham's restaurants are entirely sit-down -- there might be some carry-out, but there is no catering or delivery.  He stated on his show that "there are only a handful of restaurants in Cincinnati doing $50K per week".  Again, that is probably the case for sit-down non-chain restaurants.  Meanwhile, many pizza places are doing that kind of money on delivery alone. 

 

I can not imagine many pizza places pulling in $50k a week, especially on delivery alone.  A million dollar store is considered the threshold for a very successful casual restaurant concept, or $20K a week.  What often helps some places overcome this threshold is higher price point, catering, and/or alcohol sales.  I would think the expected weekly threshold for the Mahogony concept to be 30-35K.

Bill Cunningham said today he only owns one of the Willie's. 

 

Sorry, I didn't think through the $50K delivery-only figure.  But combined with carry-out, yes, there are some pizza places approaching that weekly.  Addriatico's was doing $30-35k a week before their move on carry-out + delivery alone.  Now they're around $50K, with much of that being an increase in delivery and carry-out due to better visibility.  But their food and labor costs are very high compared to Domino's or any chain, since they aren't making their dough from scratch or using antique, gas guzzling ovens.  Domino's is the roach of the pizza business, with hardly more of a set-up in the kitchen than a Subway. They run their pizzas twice through a 6-minute conveyor belt oven and they're ready to party. 

 

 

 

Anyone know what the monthly payment to the city this restaurant must pay once it's up and running?

So, Smitherman was just on Cunningham talking this issue.  Smitherman, of course, let everyone know that he is "a certified financial planner"

 

It's one (very bad) thing for him to say that face-to-face with people who don't know any better, but if he starts saying that on the radio the Certified Financial Planner Board of Standards is going to start getting pissed off if he doesn't actually hold that certification. He's not listed on the CFP Board website. In fact, any time the term CFP® is used by a financial professional in print they have to put an ® next to it and a ™ next to Certified Financial Planner™.

Anyone know what the monthly payment to the city this restaurant must pay once it's up and running?

 

No, but I hope to find out.