Legal Spending: October 2007 - July 2008

City of South Euclid Legal Spending
October 2007 - July 2008

Port Authority Balks At Retail Projects

How will this influence the Cedar Center project?

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Please click on the link below to view details regarding the Port Authority and the Cedar Center project:

• Cedar Center Facts

Not So Fast

The City’s highly paid Law Director did not show up prepared for the city council meeting on July 14th and handed down incorrect advice on the legalities of rescinding or amending Ordinance 65-05.

Council President Moe Romeo made a motion to reconsider the legislation, seconded by Ward 3 Councilman Ed Icove. It seems these two were spearheading the attempt to derail the not so unsuspecting residents with the scheme.

Was this a calculated attempt to throw the public a curve ball? If council rescinded “point-of-sale” and it was removed from the November ballot, they could bring it back later in an amended form.

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Please click on the videos below to view: Law Director gives incorrect legal assessment at South Euclid City Council meeting on July 14, 2008. Use both your computer and volume control arrow on the video itself:

QUESTIONABLE CREDIBILITY

Council President / Ward 2 Councilman Moe Romeo is not consistent with his “public” position on the “point-of-sale” legislation. He uses the classic “bait and switch” technique to attempt to sway voter support. At both his webpage on the City website, and in the most recent “Update” newsletter, he emphatically states that interior inspections are off the table. However, on July 14, 2008, he suggests to Council that they could amend “point-of-sale” to include INTERIOR as well.

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A House Divided

July 14, 2008: South Euclid City Council Meeting - The most significant piece of business at Monday’s council meeting pertained to Ordinance 65-05 – “Point-of-Sale” – Council President Moe Romeo and Ward 3 Councilman Ed Icove were clearly the proponents of some form of modification to the “point-of-sale” legislation. After much deliberation between the council members, some of whom it appeared had no idea that the others intended to completely rescind or repeal Ordinance 65-05, Romeo and Icove withdrew their motions to reconsider "point-of-sale" and the matter was left for discussion at the next meeting on July 28.

During the open session of council, residents who both oppose and support this legislation urged Council to keep the matter on the November ballot by not rescinding the legislation. Several residents questioned Law Director Michael Lograsso on specific legal issues surrounding the upcoming vote and the possibility of Ordinance 65-05 being repealed. Mr. Lograsso was woefully unprepared to provide any solid answers to either the public or City officials. At one point when the Law Director appeared annoyed and put out by repeated questioning by resident Yacov Lieber, Council President Moe Romeo stepped in to offer his best assessment of the situation.

Council members Sunny Simon and Jane Goodman both strongly expressed their continued support of “point-of-sale.” Both Ruth Gray and David Miller requested more information from the administration, primarily the building/housing department.

Mayor Georgine Welo made a statement in which she indicated that she did not approve of Ordinance 65-05:

“…I will tell you that everything that you want is in the codified ordinances book. There’s no doubt about it. I agree with Yakov Lieber. Everything is in that book that we can use as a tool. The problem has been we never had anyone to administrate it…”

“…I will tell you as mayor, the housing stock is moving very well. Real estate agents are coming in regularly to speak to us. We’re outshining our neighbors and it’s not as bleak as you think it is. We’ve actually made a turn, there’s days we don’t have any foreclosures. I don’t know, so maybe what we need to do is see how many houses really have sold…”

It is perplexing that if the Mayor does not agree with the highly controversial legislation, why she did not exercise her veto powers in November 2007 when Council passed Ordinance 65-05.

The video below is from the Council meeting on July 14, 2008. Please turn your sound up - you may also use the volume control arrow on the video itself. Approximate length is 3 minutes.

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For those of you keeping score:

City Council: Two councilmember’s solidly in favor of “point-of-sale”, two ready to rescind, two more which kept their inclinations close to the vest and that leaves only Councilperson Diane Fistek, who announced her resignation from Council at the end of Mondays meeting.

Mayor Welo suggested rescinding 65-05 and letting the housing department take care of housing inspections on a citywide basis.

The long and arduous journey of "point-of-sale" will last at least two more weeks.

Note: There will be a Committee meeting at 7pm on this subject prior to the regularly scheduled City Council Meeting on Monday July 28, 2008.

Councilwoman Fistek Resigns

Councilwoman Diane Fistek resigned from South Euclid City Council effective at 11:59 p.m. on July 14th, 2008. She stated that the reason for her resignation is due to her husband accepting a position with the City of South Euclid as a housing inspector.

Crunching The Numbers

According to loan applications submitted by the City of South Euclid to the Cuyahoga County Department of Development:

• The estimated cost of the redevelopment of Cedar Center is approximately $69 million.

• The Sun Messenger reported that Peter Rubin dba The Coral Company will contribute $40 million which includes $17 million to repay the city their purchase price. If that is correct, this would leave $23 million that Peter Rubin will contribute to the redevelopment cost. Now there is a matter of at least $46 million that is remaining to reach the estimated cost of $69 million for the redevelopment. $46 million is a VERY conservative estimate, because the same county documents actually show the city’s calculations indicating “debt financing” to be $56,083,729.

• The City of South Euclid has stated that a minimum of $13 million will be funded through “TIF” financing (tax increment financing). Has the Cleveland Heights/University Heights School district signed off on this?

• Where will the other millions come from to reach the estimated redevelopment cost of $69 million? The loan applications indicate a “construction loan” in the amount of $41,283,729 as a portion of the “debt financing.”

• Why is the City of South Euclid paying for the demolition and environmental clean-up at a cost to the taxpayers of $1.8 million if the property is being “sold” to The Coral Company?

• Why has the City repeatedly misrepresented the facts regarding these loans for $1.8 million? According to the Cuyahoga County Department of Development, the only “grant” money the City has, or will receive is $35,000 which was paid directly to Burgess and Niple for their services rendered for consulting.

• The city is currently paying property taxes of $460,526.22 on the Cedar Center properties.

The above calculations do not include the astronomical cost of legal fees which have for the most part been paid to outside legal counsel while the "part time" City Law Director receives a very healthy sum of money.

Please click on the links below to view city records of legal spending:

• http://www.scribd.com/doc/3852193/Legal-Fees0406

• http://www.scribd.com/doc/3830361/LegalFees07

How much public money will REALLY be spent on Cedar Center when the final tally is in?

Please click on the link below to view other information at South Euclid Oversight which provides access to the actual documents referred to above that were obtained via public records requests:

• http://southeuclidoversight.blogspot.com/2008/06/cedar-center-facts.html

University Square For Sale

There are many vacancies at the University Square shopping center. This property is in University Heights across the street from Cedar Center. It is not possible to term this development as successful. How will the situation play out at a much more expensive project in South Euclid under the current state of economic affairs?

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Flawless Assessment

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Please click on the link below to view related post:

• More Socialized Real Estate?

More Legal Spending: Jan 2004 - Dec 2006

City of South Euclid Legal Spending

 January 2004 - December 2006

Legal Spending: Jan-Oct 2007

City of South Euclid Legal Spending
January - October 2007

Interesting Scenario

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Please click on the links below to access loan applications for demolition and environmental clean-up of Cedar Center:

• http://www.scribd.com/doc/3322049/BrownfieldApplication

• http://www.scribd.com/doc/3322061/CommercialRedeveopment