Records request reveals plan by Port Authority to keep knowledge from public and press

 

conduit-financing-illustration
Illustration by Clermont County Port Authority of sample “Conduit Financing” to private developers
Port Authority also now “owns” building and holds lease on land

 

Loveland, Ohio – Loveland Magazine made a public records request to the Clermont County Port Authority that reveals an arrangement with Loveland Station developer Jim Cohen, president of CMC Properties to delay public knowledge of a deal that awards CMC an Ohio sales and use tax exemption estimated to be worth $250,000 for the apartment complex he is building in Historic Downtown.

[quote_right]The Port Authority deal also gives the Clermont County development agency a 7-year lease on the 3-acre site, and ownership of the buildings.[/quote_right]The Port Authority deal also gives the Clermont County development agency a 7-year lease on the 3-acre site, and ownership of the buildings.

The City of Loveland paid approximately $2 million for the three acres and sold it to CMC for $180,000 in October of last year. In addition, there has been nearly two million additional public dollars invested in marketing, improving the site, and previous concessions to Cohen.

To make the tax break possible, “The Port Authority now owns the building and leases it to the developer, while the developer leases the land to the Port Authority,” as stated in a County newsletter released on June 30 .

By transferring the buildings and land to the Port Authority, CMC gets a sales and use tax exemption for construction materials or taxable services they purchase to build the 11,870 sq. ft. of retail space and 94 “luxury” apartments. The developer saves an estimated $250,000.

The deal is for 7-years (with early termination clauses), or until the apartments are built and a certificate of occupancy is issued.

hear-no-evil
The Clermont County Port Authority now owns these buildings and holds a lease on the land in Historic Downtown called Loveland Station.

Councilman Mark Fitzgerald said today that he assumed from what he previously heard, that the Port Authority was assisting Cohen with the project, however was unaware of the sales tax exemption or that the Port Authority now owned the buildings and holds a lease on the land.

In the June newsletter, Andy Kuchta, director of the Clermont County Department of Community and Economic Development said Loveland Station faced significant infrastructure costs, which threatened its viability. “The developer approached the Clermont County Port Authority in 2014 for assistance,” according to the newsletter.

Documents received from the public records request reveal that although the deal became public on June 30th of this year in the newsletter announcement, negotiations began at least as far back as July 21, 2014 at a 8 AM meeting at the Main Cup in downtown Milford. At the meeting was Andrew Kuchta, the Secretary and Fiscal Officer of the Port Authority, Jim Cohen, president of CMC Properties, and Chris Hamm, the chairman of the Port Authority. Hamm is CEO of Altimet/Global Scrap Management in Batavia and Milford. Kuchta is also the Director of the Clermont County Community and Economic Development agency

On September 5, 2014, Kuchta emailed Cohen with a summary of the meeting and outlined what they discussed. He also asked Cohen to provide him with, “Timing on when developer is comfortable with this deal becoming public.”

[quote_left]“We have not had any reporters or interested citizens attend a Port meeting this year, but you never know when someone will show up.”[/quote_left]On September 15, 2014, Kuchta emailed Cohen about an upcoming meeting of the Port Authority where they would vote on the tax exemption. In the email, Kuchta said, “We will discuss your project in closed session so there will be no reporters or others in that portion of the meeting. We have not had any reporters or interested citizens attend a Port meeting this year, but you never know when someone will show up.”

On September 17, 2014, the Port Authority met in a closed-door session with Cohen and others. According to minutes of that meeting they then approved a motion offered by Hamm for the Port Authority to pursue the tax exemption.

On October 7, 2014, Loveland City Council approved the development agreement and the transfer of the downtown property to River Trails Flats, LLC (CMC), allowing Loveland Station construction to start.

Before the $250,000 in Ohio sales tax relief, the total public dollars spent on developing Loveland Station was nearing $4 million, including legal fees, environmental studies, installing storm water sewers, staff time, removing the existing unsuitable dirt, supplying new fill dirt to raise the elevation, paving the site and then removing that original parking lot, burying utility lines, and creating a railroad “Quiet Zone” so apartment renters would not hear the approaching trains. Federal and State grants of $500,000 were also used to prepare the site for development.

[quote_right]Before the $250,000 in Ohio sales tax relief, the total public dollars spent on developing Loveland Station was nearing $4 million[/quote_right]During the time that former city manager, Thomas Carroll sought an increase in Loveland’s income tax, he told city council that the Loveland Station project would only generate $25,000 a year into City coffers.

Ohio law allows port authorities to provide the exemption of Ohio sales and use tax for the purchase of construction materials for projects using what is called, “conduit financing.” Because of its tax status, port authorities do not pay Ohio sales and use taxes on projects they control, thus the need to the transfer the land and buildings to the Port Authority.

CMC will build, maintain and operate the buildings. CMC paid the Port Authority a $19,000 lease financing fee and $20,000 for fees and legal counsel payable at closing, but $7,000 will be deferred and paid as rent to the Port Authority.

According to information provided on their web site, the Port Authority has no paid staff or physical office. Projects are managed by the staff of the Clermont County Department of Community & Economic Development. The Port received an initial $20,000 contribution from the County Commissioners in 2012 to fund the operations as the organization was established, and it was anticipated that the Port would be self-sufficient on an ongoing basis through project fees, .

 

 

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5 COMMENTS

  1. Doesn’t pass the smell test either. Of course many were already holding their noses from all the financial shenanigans emanating from city hall.

  2. Sounds fishy. The city gives away almost $4 million and is giving us “Traffic-Jam-City”. And this developer seems sneaky. Is he related to that Evans landscape guy ?
    This eyesore is terrible. It is gonna’ create great traffic problems and our city council just doesn’t seem to care. All for a few extra dollars in tax money ? Should have kept the damn parking lot and put up a few picnic tables and a playground. Should have asked the citizens for a small tax increase to leave the space as it was. No one I know on the Loveland Clermont side wants this damn monstrosity in the middle of our 1 block downtown. Just wait until all 100 apartments and 15 stores are open. Yeah, just try to come across that bridge on a nice sunny 75 degree weekday at 5:30.
    Now all we need is for the city council to bring back that farmers market and stick it right back in that little parking lot. Don’t be surprised to see them at least consider this ….

  3. Maybe I missed it, but how much money will CMC be paying to the Port Authority as their ‘lease’ payment? How much of those lease payments will the Port Authority pay back to the City of Loveland?

    It seems the City of Loveland has shelled out about $4 million, but what is the return on this investment of taxpayer money?

    • EDITOR’S NOTE: The Port Authority pays nothing to Loveland. The money the Port receives from CMC is kept by the Port.

      • So, to whom does Mr. Cohen owe a debt of gratitude for selling him a $2 million parcel of land (bought with your tax dollars and mine, not to mention the additional $2 million spent on land improvements) for $180,000? He is either the luckiest man in the region, or he is a shrewd lobbyist who had some major favors thrown his way, in return for ?

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