Dayton tax dollars being donated to the rich

The Talbott Tower is owned by Allan Rinzler. He’s not exactly hurting for cash- he can afford to donate enough money to have a sports complex named after himself at Wright State. The Talbott tower is one of the higher occupancy towers left in downtown- in fact, I remember Mr. Rinzler telling me it’s one of the only ones to not go into bankruptcy/foreclosure.

And this is probably one of the reasons why:

The corporate headquarters for YMCA of Greater Dayton is moving to an office building across the street in downtown Dayton.

The YMCA is finalizing a lease at the Talbott Tower for 9,000 square feet for its corporate headquarters. The organization’s headquarters are currently in an 8,000-square-foot space in the 111 W. 1st St. building across the street. The deal will keep the group’s 30 employees, with a total payroll of $1.25 million, in downtown. Those employees will continue to support downtown retailers, and pay Dayton income taxes.

“We were presented with a great opportunity and we’re excited to go over to the Talbott Tower,” said Dale Brunner, president and CEO. “We’re excited to sign it and stay part of the downtown area.”

The city of Dayton on Wednesday morning approved a $75,000 neighborhood grant to help the Talbott Tower fund about $150,000 worth of renovations in the new space, in order to keep the YMCA in downtown. That decision reflects the fact that nonprofits are now among the most dynamic office users in downtown, and the most sought after by office tower landlords looking to fill their vacancies.

Bob Grabringer, property manager for the tower, will act as the construction manager and will hire subcontractors with whom he already has a relationship.

Source: Dayton YMCA to move HQ into Talbott Tower – Dayton Business Journal

That’s $75K of your money- enough to pay a cop or two for a year, or mow an awful lot of empty lots- or tear down a few abandoned homes. If you were the owner of the building across the street that the Y was moving away from- you could use that money to try to keep the Y in your building, but that’s not how it works in Dayton. We take care of those who take care of those who run for office.

This isn’t the first time Rinzler has been on the receiving end of a good taxpayerfunded deal- he was one of the partners that owned the old Sears building downtown, along with the Feldmans (our former county administrators family), Mr. Sandy Mendelson, Mr. Jason Liff and Irvin Moskowitz all got a nice bit of action to make sure that the county could put a fountain on a tiny bit of that parcel. Bought for $200K and sold for over $8 million.

There are lots of other developers who have gotten support from the city- and still ended up in bankruptcy. Your tax dollars contributed to the Arcade, the Arcade Tower, the former CitFed, 5/3rd bank and now Premier Health Tower, all of which failed.

Don’t you wonder if all the money that’s been squandered on “economic development” had been spent on cleaning and repairing streets, safety forces, better schools, parks- and getting out of the way of developers- we might never have taken a dive. Or if we hadn’t raised our income tax over that of every other community- since it was collected from non-residents- who have now all voted with theit feet to the mecca of tax-free income (if you are a white collar employee only) at Austin Landing.

Tax dollars that are spent in pursuit of tax dollars are dollars a lot like a certain cartoon character who used to say, “I’ll gladly pay you Tuesday for a hamburger today”- but, Tuesday never seems to come to Dayton.

Dayton makes another mess of “economic development”

Eric Segalewitz isn’t a bad guy. In fact, he’s a good guy, who invested a lot of his money, time and labor buying almost the entire block of houses across from the former DMHA shithole Cliburn Manor. He did this without any assistance from the city, CityWide or anyone else. Most people thought he was crazy- why would you want to invest or live across from a drug infested, crime den public housing project?

He did it- because he had the foresight to know that eventually Miami Valley Hospital and UD would surgically remove the neighborhood cancer- and then his real estate would be valuable.

He’s not the only one who had some vision of profiting from their grand plans. Jimmy Brandeis of Jimmie’s Ladder 11 held out for his sweetheart deal to move Jimmie’s Cornerstone across the street, with a parking lot, a huge patio, and double the space.

Fred Allen, a local slumlord, sold two of his shit-hole houses for $150K each, way above market value.

There are still a few holdouts- the antique store at Oak and Warren, which was at one time owned by South Park Social Capital won’t sell out. Neither will the Krafts who own the last two remaining homes on Warren’s West side.

Some people think Segalewitz is trying to fleece the city for their incompetence. But, if we look at the cast of characters revealed in today’s Dayton Daily news article- it’s the same incompetent crew that’s driven the cart off the road before with impunity:

Aaron Sorrell, Dayton’s director of planning and community development, admitted the city erred but questioned Segalewitz’s legal right to the land.

He said the city has no plan to fork over a big payout for administrative oversight.

“We’re not going to unduly enrich somebody for a mistake,” he said.Segalewitz, 50, who owns the company Upscale Realty, a few years ago applied to purchase a vacant lot next to his home at 32 Alberta St.

Segalewitz applied for the land through Dayton’s Lot Links program, which allows people to buy abandoned, tax-delinquent properties for a relatively small fee.

Segalewitz’s request was approved, and he paid about $650 for the property, which was transferred in March 2012.

The lot belonged to the city of Dayton, which had purchased it from Greater Dayton Premier Management in December 2011, as part of a larger land deal.

The city acquired the side lot and 5 acres across Alberta Street for about $340,000, or its appraised value, city officials said. The two parcels were part of the same deed.

The five acres was the former site of the Cliburn Manor housing projects, which were demolished in 2008. The city wanted the land to support redevelopment efforts near South Park and Miami Valley Hospital.

But when the deed was written to transfer the vacant lot to Upscale Realty, it also unintentionally contained the Cliburn real estate, Sorrell said.“We made a mistake with the deed and inadvertently put both pieces of property on the deed, and not just the one he wanted,” Sorrell said.

The quit claim deed was signed on Feb. 27, 2012, by Assistant City Manager Shelley Dickstein and Assistant City Attorney Jonathan Croft.

Segalewitz said he only learned he owned the deed to the Cliburn property about six weeks ago while preparing to sell his Alberta Street home and the adjoining lot.

Source: City redevelopment tract mistakenly sold

Sorrell was the one who also said “Oops” when Rauch Demolition mistakenly tore down the back part of the historic Cox building at Fourth and Ludlow. He’s also the one who signed off on tearing down the Schwind building for the “Student Suites” deal which isn’t happening due to a deed restriction that was well known.

Shelly Dickstein was the braintrust in charge of the development deal for the Wayne Avenue Kroger where the city jumped through hoops for over 4 years- with no contract in place, which was well documented on this site. The city had no problem paying over $800K for the burned out Ecki building and then demolishing it to make an empty lot, despite the building being an eyesore and owing taxes.

The real question is why does the city insist on buying real estate at all? Why did they spend over $100,000 long ago to buy the lot now known as Garden Station? Why did they buy the building behind it (which I did a FOIA request on – and got no answer). Why did they buy the old Supply One building and 601 E. Third for $450K each?

And the “We’re not going to unduly enrich somebody for a mistake,” line sure is funny. Go back to when a group including the family of the former County Administrator Deb Feldman purchased the Sears building downtown for a mere $200K. When the Riverscape fountain plan was released, the County hadn’t secured the tiny outlot attached to the Sears property. In a battle of testosterone and threats of using eminent domain, the price escalated from the initial offer of $3.2 million to over $8 million for that piece of land. Segalewitz just isn’t related to the right people apparently.

The fact that Segalewitz didn’t get a tax bill for his windfall- is because CityWide and MVH don’t pay taxes- nor does the city. And the city will grant a sweetheart tax break to Oberer/Greater Dayton Construction for building whatever they come up with on the property. Segalewitz is one of the little people- he’s expected to pay taxes unlike the connected few.

It’s time to do a full investigation of city land purchases, real estate investment, and money to CityWide development. A full detailing of the investment in Tech Town and the “Entrepreneurs Center”- and the actual returns might be a good starting point.

While we don’t have money to cut the grass in City parks, but do have the money to buy swath’s of land for our friends is a criminal diversion of tax dollars. Segalewitz is not the bad guy. The bad guys are on our payroll.

 

Why, besides the obvious reasons, is BradyWare moving to Austin Landing

The exodus of professional firms from Downtown Dayton to Austin Landing continues.

From the Dayton Business Journal:

The company currently has 55 employees in its 15,000-square-foot office. The move will be felt downtown — losing income tax and some of its daytime population — and at the Fifth Third building at 1 S. Main St. where BradyWare is among its longtime tenants.

Yet its relocation further solidifies Austin Landing as the new financial hub of the Dayton region, with other top local firms such as Merrill Lynch, Clark Schaefer Hackett and Wells Fargo. The location is said to be advantageous for firms looking to draw clients and employees from the Dayton area, as well as the Cincinnati region.

The city of Dayton will take a big hit in the lost income tax from all of the employees who live outside the city, many of whom stand to get a de facto 2.25 percent raise if they live in a township or city without an income tax. Unless the new office is on the first floor of a building in Austin Landing, employees are not subject to the income tax of the Joint Economic Development District at Austin Landing.

Source: BradyWare confirms plans to move from downtown Dayton to Austin Landing – Dayton Business Journal

However, the inside scoop is that apparently, BradyWare had set a meeting with Dayton Mayor Nan Whaley to discuss staying another five years, but she didn’t show up for the meeting. Of course, part of the problem is that we have a City Manager form of government, and this should have been something the City Manager was doing. Of course, it would have just resulted in one of those tax rebate deals- where in exchange for keeping X jobs in Dayton for X years paying at least X dollars- we’ll throw you back some money. A finger in the proverbial broken dam.

Throw in the cramped parking that costs in the basement of the old Cit Fed/5/3rd tower Arcade garage, and the lack of food options, why pay that Dayton payroll tax?

Note- the 1 Dayton Center/5/3rd building at the corner of 3rd and Main- was built with tax dollars, despite not being pre-leased at the level required, and the building has been a financial flop since day one.

The giant sucking sound of the illegal JEDD at Austin Landing continues as a tax haven for the white-collar “2nd floor” types. Only the “little people” on the ground floors of Austin Landing pay taxes, and it’s costing the City of Dayton dearly.

Unfortunately, the idiots the people of Dayton elected to the City Commission like to accept big donations from developers and their friends – and in the end, all the voters got was the best politicians money could buy, while the developers are laughing all the way to the bank.

Dreams of selling pot brownies out of City Hall’s building

The City of Dayton is the worst real estate speculator in the region. They also aren’t very honest about what “they” own (I say “they” because it’s the taxpayers that foot the bill). Recently there was an article about a building at 15 McDonough St. behind Garden Station that they owned and leased part of to Gosiger. I did a FOIA request on when the city purchased the building, for how much- and to see the copy of the lease with Gosiger and got nothing back. They are selling the building for “$10 to Bacon Street Properties LLC, which lists Gosiger’s headquarters at 108 McDonough St. as its mailing address” yet- somehow, “City Properties Group… (also) is involved in the project.” They are the ones from Louisville that have the old Supply One building next to Garden Station.

A long time ago, a local developer managed to get a printout on greenbar computer paper of the entire listing of city owned properties. With one property per line, the folded stack was several inches high. There was, and is, something fishy about that. But, on to other issues.

You may remember when a local entrepreneur tried to lease the old Chin’s, Elbo’s, Sa Bai from the city to have a Food truck kitchen, teaching facility, rental hall. Tonia Fish was paying rent, and then the city decided to kick her group of small businesses to the curb- which was part of a prior article on Esrati.com:

The Great Thanksgiving Day Food Truck Massacre

It started on Tuesday, when Tonia Fish told me that her temporary lease on the old Chin’s/Elbo’s/Sa-Bai space at 200 S. Jefferson St. may not be renewed. A meeting of some sort had been held in City Hall and the decision was coming. Mayor Leitzell had told me that in the executive session last week, where this matter was being discussed, Nan Whaley wasn’t prepared to vote on it and it was tabled. Had they had another illegal meeting of the commission to discuss this lease? There wasn’t an announced session- and since Executive sessions have to be done either as an emergency and announced- or gone into from a regularly scheduled meeting- what had happened?

via Explaining irrational behavior in Dayton, Ohio – Esrati.

The building sat vacant for over a year. Zero rent. Of course, no one in City Hall is going after Sa-bai for breaking their lease, or back rent.

Instead, we’re giving the space away, again:

Bethany and Aaron Horn, who own Cheeky Meat Pies, have agreed to a five-year lease with the city of Dayton for 200 S. Jefferson St.

The building will feature a breakfast and lunch establishment called Cheeky Cafe and Bakery, as well as a casual dining joint called Weeds Diner, likely featuring “farm fresh” food and alcohol, including craft beers.

“The cafe side will be more comfort food, and the Weeds side will be more seasonal based,” Bethany Horn said about the 5,786-square-foot South Jefferson Street property, located across from the Dayton Convention Center.

Sai-Bai closed in 2013 after accruing more than $60,000 in unpaid rent and taxes, which resulted in the city starting eviction proceedings….

Horn said the cafe should open around May, and the diner hopefully will open by August….

Under the terms of their contract with the city, Horn Food Enterprises will pay no rent through the end of this year, but will be required to pay $14,518 in rent and parking in 2016 (or $2.25 per square foot).

The Horns will pay $15,965 in rent and parking each year for the remainder of their five-year contract (equal to about $2.50 per square foot). They have a trio of renewal options to extend their lease for an additional five years.

Horn Food Enterprises are not being charged rent for the first nine months because the owners will make considerable improvements and renovations to the space, especially the kitchen, which will become the property of the city of Dayton, city officials said.

“If we wanted to make the space reasonably leasable or rentable, those would be expenses we would have to incur,” said Joe Parlette, Dayton’s director of recreation and youth services.

Parlette said the city in the last two years reviewed probably 15 business plans for the site, but the Horns’ proposal won out partly because they had capital and were ready to move forward.

Parlette said the new agreement means all of the city’s leasable space in that area is occupied. The city also owns property that is rented by ThinkTV, Gilly’s and Drake’s Gym.

“Anytime the city can avoid a vacancy downtown is a win for the city and its neighborhoods,” he said. “It will give citizens another unique option to enjoy downtown.”

via Two restaurants to open in downtown property | www.mydaytondailynews.com.

Why the director of Parks and Rec is doing property management is the first question. The second should be is why was the space no longer usable after SaBai left? Maybe because they took everything they put in, including the washroom sinks and left the city with a mess. No one is being held accountable for that.

And, considering Ms. Fish was in, and paying rent of $850 a month for a space that wasn’t “reasonably leasable” – the taxpayers went without 2 years of potential rent and tax revenue because, well, why?

The last laugh may be on the city, when it turns out the real business plan according to confidential sources is that the “Weeds Diner” is planning on selling marijuana edibles as soon as the laws allow it. That should just go over fantastically with the fine folks of Dayton. We already saw how fast Moraine backpedaled on their land lease to potential pot growers.

What we really have is questionable business practices by a government that can’t figure out how to plow snow, sweep streets, or get a cop to a Family Dollar while an assault is taking place in less than 10 minutes. Why our city is so focused on other people’s business instead of running their own is a major question.

When you realize these people at city hall spent at least $4 million to get a Kroger to Wayne Avenue and failed. They also tore down the Schwind, the Dayton Daily News and part of the historic back- for student housing that’s not coming thanks to a HUD deed restriction that they should have known about. The list goes on. Who in City Hall is qualified to review “15 business plans” and make this decision? The same one who spent $450K on 601 E. Third St?

Maybe it’s time to divest the city of all its real estate holdings that aren’t directly used for providing taxpayer services? Or maybe, it’s time for the rest of us to start eating pot brownies so we can be just as high as the fools we have managing our real estate holdings.

UPDATE

5 April 2015. As if I needed more evidence to prove to you that the city is an incompetent property manager, this was in the morning paper.

DAYTON —Hundreds of thousands of dollars in infrastructure and equipment was removed from a vacant industrial building owned by the city of Dayton.

The security officer at the McCall Building, 2333 McCall St., filed a report Friday night on a breaking and entering, according to the Dayton police report.

Wiring, electrical equipment, copper pipes and generator equipment was listed as missing, an estimated $500,000 loss, according to the report.

The building is listed on cityfeet.com, a website that markets available commercial space.

The 348,000 square-foot building, valued at $1.5 million and available for rent at $58,000 per month, is listed as one of Dayton’s economic development sites.

via Thieves strip $500K in material from city-owned building | www.daytondailynews.com.

Another half million that could have been spent providing government services wasted.

Old fashioned entry-level jobs

I was having a discussion today about first jobs, entry-level jobs, and “when I was a youngster” type stories.

Someone mentioned that in Oregon and New Jersey they have people pump gas at gas stations. Why? Back when I was a kid, and gas was well under a buck a gallon, not only would they pump your gas- but they’d check the oil, washer fluid and even your tire pressure. Some of them were high school kids, others- were old guys. Every day in grade school I walked past the Shell station on Lee Rd. four times a day- and I’d wave and say hi to “Smiley”- who had to be a grandpa- and was pumping gas. By the time I was in high school, Smiley was gone- and we were pumping our own gas, albeit without a hold-open lever.

A bunch of brothers named Barrett, used to work at the Sohio station. By the time I came home from the Army, one of them ran it. Besides pumping gas, they worked on cars. Now the corner mechanic is a thing of the past.

A lot of kids got their first jobs as baggers at grocery stores. Sure we still have baggers, but back then, it was different. You might push your own cart out the door- but then you’d leave the cart with your purchases at the corral, and they’d give you a plastic disc with a number on it- that you’d hang on the window- and pull back up- and a youngster would load your bags into your car. Not only did carts never get stolen, they also did bash your car in the lot. And kids had jobs.

We all remember paper routes, well those of us who are pushing the half-century mark. Budding entrepreneurs were given a block or two as their local territory. You’d deliver the papers every day according to different instructions. Some inside the screen door, others in a paper box, some up the stairs- or around back. Once a week you’d go knock on doors and hope to get paid. Checks, cash, and it was almost an honor system since almost all paid the carrier instead of having a subscription. It was a very personal relationship. I’m pretty sure many people “bought” the paper just like many buy Girl Scout cookies- just to keep a kid employed. I had favorites on my route. Some would offer me a cookie almost every time I collected. One old guy was a camera collector- he had hundreds of split 35mm cameras. I’d never heard of or seen one before- and he had them all. It was always fun to have him show me his latest acquisition.

My father always talked about being an usher at a movie theater. He, and his friend Johnny Bowles, used to see all the movies that way. I barely remember that job being around when I was old enough to go to the movies.

Now, kids even have a hard time finding jobs in fast food. There are adults competing for those jobs- even seniors, trying to make it on their meager Social Security checks. I’ve had a bunch of kids come through my office via the Montgomery County YouthWorks program, where our government pays for them to make $8 an hour to job shadow, and intern, despite having limited job skills. Right now I’m graced with two awesome young ladies who are both cheerleaders. Their enthusiasm to learn, to experience, to participate is inspiring. But, the sad thing is we are paying tax dollars to make it possible for them to experience jobs that will require them to go to at least two years of college, which is growing more expensive by the minute.

Not everyone is ready to be a college graduate. Not everyone can afford to be, with the amount of money it now costs to go. It’s time to look for ways to create more entry-level jobs – to stop subsidizing Wall Street and look to invigorate the entry-level job market. How can we reward companies for insourcing and creating entry-level workers?

Maybe it’s time to cut payroll taxes on entry-level workers or offer rebates for job creation, instead of tax breaks for promises of new jobs. We need to make it culturally cool to be the person who hires as many local people as possible, and take the pedestal away from those who outsource, offshore and exploit workers.

It’s time for a new version of old fashioned entry-level jobs. Suggestions?

My relocation incentive package

Dear Economic Development Director, Anytown USA

I’m considering moving, and am interested in seeing what kind of relocation incentive package your community will offer me. I’ve watched municipalities in my current location battle each other for developments and job creation numbers, offering all kinds of corporate welfare to justify their existence. I figure I bring value to whichever community I move to, and would like to see what you can offer.

As a 24 year-old college student, I purchased my first home for $14,500. Before the market crash it was appraised at over $128,000. 23 years, 782% rise. I then went on to purchase and rehab 4 other buildings with similar increases in value. What’s more, I served as neighborhood president, started a neighborhood for-profit development company, and was active in the marketing of the neighborhood- where it is now one of only 3 neighborhoods in the city that actually saw property tax valuations rise during the depression (calling the last economic downturn a recession is flat=out fibbing, it’s one of the reason- you have a job though, so, we’ll keep it between us).

I also started a small business, an ad agency. While my employment numbers over the last 23 years never rose above 7, on average, I employed 3 people. Considering that the SBA figures show the following:

Small businesses make up:

  • 99.7 percent of U.S. employer firms
  • 64 percent of net new private-sector jobs
  • 49.2 percent of private-sector employment
  • 42.9 percent of private-sector payroll
  • 46 percent of private-sector output
  • 43 percent of high-tech employment

You can use my job-creating ability as an indicator of your city’s “small business friendly quotient” which you can then market to other entrepreneurs. While I know you like to hit home runs, singles can win games.

As a community organizer/political activist, I can help advocate for innovative and new-urbanist friendly programs. Do you need an independent gadfly to promote bike share systems, year-round schools, subsidized day-care/pre-K intervention, community recreation programs, veteran owned business initiatives? I’m your guy.

My blog, which I’ve been publishing regularly since 2005 is read by all the people who know people in my city and I’m sure that before long, I’ll have your bosses reading me too. I’ve exposed; pay-to-play politics, congressman’s wives running corporate fronts for donations and doing business with a GSA schedule while her hubby sits on the allocating committee, and broke global news when a 2x Pulitzer winner quit the local paper instead of firing half of his photographers on orders from the editor. Note- I may not treat your deals with kudos, but I’m less likely to bite the hand that feeds me if you offer me a really sweet relo package.

I’m also a perennial candidate. You have nothing to worry about when it comes to me taking office, I never win. People either love me or hate me, and since I refuse to take corporate donations, or sell my soul in exchange for votes, I can help give your local elections some level of legitimacy without actually risking your incumbents’ seats. Instead of plastering the city in lame campaign signs in my last race, I hung 300 basketball nets, 3 new rims and cleared all the courts of weeds, trash, broken glass and debris. Look at my campaigns as future ways to augment your underfunded parks and rec department, while you build spec business parks and “tech incubators” with tax dollars. If you want to talk about the drone industry as the future of your region, count me in, I used to build scale models as a kid, and passed the FAST test in the Army. I’m sure that if you give me enough of an incentive package to relocate to your community- I can get a quad copter and use my SDVOB status (I’m a service disabled veteran- who will own a business in your community) to bid on big government contracts for drone research.

I have no kids, so I’m not worried if you fund your schools adequately, or that they even perform. My city gave General Electric a 30-year hall pass from having to fund our schools, all while GE claims to need highly paid engineers to make up its workforce.

To sum up, I’m looking to locate in a JEDD (Joint Economic Development District) where my blue-collar employees are charged an income tax, but my white-collar employees are not. I’d also like a TIF- Tax Increment Financing, where instead of paying taxes to the municipality, I pay them to myself for “investment.” I’d like a relocation and training incentive, where you pay half the salaries of all my employees for the first 5 years if they previously worked at a higher paying job, but are eligible for “retraining assistance.”  I’d also like it if you paid 100% of any classes my hires take at your very fine taxpayer-subsidized community college, even if it’s funded by taxpayers in an adjoining county.

I’d also like some guaranteed contracts with your local governments, grants from your local taxpayer-funded “venture capital fund” and ED/GE grants for job creation and retention.

I figure with these kinds of “economic development” assistance programs, this community activist can add true value to your community and you can add one more reason to keep you employed in redistributing tax dollars for public service into private pockets.

Bid packages are due the first week in January.

(note, I’m not going anywhere, sorry- I just thought I’d write something humorous for the holidays, sorry all of those that wish I’d go away)

Did something change on the GE deal?

When the school board passed the 30-year tax abatement on the GE Power building under pressure from the “economic development” folks who claimed GE wouldn’t come to Dayton without the tax break, the deal for the building and tax abatement was to an LLC. The tax break was for 30 years- yet, now in today’s paper, the building is owned by UD, and GE only has a 15-year lease.

Employees are moving into the new $51 million GE Aviation electrical power research and design center near the University of Dayton main campus.

The presence of employees in the building at 111 River Park Drive is a milestone in this young joint venture between the company and the university. The intent is to use the building to attract more business to GE Aviation and more students to the university…

Owned by the university, the building — called the Dayton Electric Power Research Lab — “gives us the ability to compete at a higher level in electric power on aviation platforms,” Vic Bonneau, president of GE Electric Power Integrated Systems. said.

GE has a 15-year lease on the building with an option to extend the lease, said Derek Bus-boom, project manager during construction.

via GE moves into $51M aviation research site.

Now it seems that the citizens of Dayton just subsidized a building for a private university, at a huge cost to our schools, which are struggling to pay rising health care costs, rising textbook and technology costs, and serve a student body, most of which can’t afford the luxury of an airplane ticket.

General Electric is still one of the most notorious tax evaders in the United States, and UD doesn’t pay property taxes the same way churches avoid them- 5709.07 Exemption of schools, churches, and colleges.

If the GE lease is only 15 years, shouldn’t the tax abatement only be 15 years and renewable? This is not an educational building anymore than the Dragons’ field is a place that hires Dayton Public School students (one of the promises made in the final deal by then Mayor Richard Clay Dixon, to let the taxpayers pay for a facility owned by the team).

It’s time to re-evaluate what this GE facility should be eligible for in terms of tax breaks, and closely monitor employment and wages paid to see if they match the agreement.

The opportunity costs of subsidizing Midmark’s move

On Wednesday, I went to the city commission meeting to speak against handing over tax dollars to a private corporation. As usual, I was working with somewhat faulty information that I’d received from the “Dayton Daily news” in that the money was being approved by the City Commission, but was actually ED/GE funds which are from the County sales tax collections. Either way, it’s tax dollars collected to provide government services being taken from our pockets and put into the pockets of a private corporation. Here is the basics from the PR run in the DDN:

Midmark Corp. will relocate its corporate headquarters to Dayton by July.

The medical, dental and veterinary health care equipment provider said Thursday it has completed lease negotiations and will move the headquarters, to be renamed Midmark Center, to the 1700 South Patterson Building on the University of Dayton’s River Campus. The building once housed NCR Corp.’s headquarters….

Midmark received $100,000 in economic development funding from the city of Dayton to move the jobs. The estimated payroll of the employees moving to the city is $10.8 million, which will generate about $242,000 a year in taxes for the city, according to the agreement between the city and Midmark.

The new headquarters will take up more than 23,000 square feet on the fourth floor of the 1700 South Patterson Building.

via Midmark base coming to Dayton.

Originally, the city had hoped to put Midmark into one of the empty buildings they built via CityWide Development in “Tech Town”- another squander of tax dollars on subsidies of a few private businesses with money that should have been spent on providing best in class services to all citizens. That deal fell through- but UD stepped up, by offering even cheaper space in the NCR HQ building they got for a song when NCR bailed on Dayton. There are unanswered questions about how much UD pays in property taxes vs what NCR paid in property taxes on this property, but that’s something for a paid reporter to investigate.

There is the interesting sidebar to this story, that Midmark’s CEO & President Anne Eiting Klamar also serves on the UD Board of Trustees, making this yet another sweetheart insiders deal.

But before I share my speech, let’s take economics 101. Opportunity costs are the costs of actions not taken, now, and over time. While the five year payback in “income taxes” received sounds wonderful on the $100,000 “investment”- let’s look at the real costs that have already gone into that process.

We’ve paid a myriad of “economic development” people good money to go out and sell out city primarily by whoring tax incentives and deals, instead of selling on our inherent value that we offer. In turn, the money that we’ve wasted on them, and these deals (most of which had no real penalties or clawback provisions and many went far south of positive for the city) has cut our ability to pay for essential government services- like road paving, leaf collection, safety forces, parks and recreation programs, thus making Dayton a less attractive place to live and less safe of an investment- thereby sending a message that we’re a poverty riddled city, much like the ugly girl offering to pay and let a boy have his way with her so she can go to the prom.

Maybe, if we had invested the hundreds of millions we’ve squandered on these “ED” projects over the last 20 years, which benefited a few, at a cost to the many, NCR wouldn’t have left in the first place?

While Midmark may not have any direct competitors in the region, there is also the undemocratic aspect of giving to one company while not giving to their competition- since there are no open competitions for this money, with a guaranteed equal opportunity for all. Banks can’t lend to homeowners with out following the rules of equal opportunity, but our government seemingly gets to pick and choose who to favor. This should be illegal. It reeks of payola to friends and family and political donors much more than it creates wealth. We know that it doesn’t work, because we’ve been losing payroll and investment in the city for about the same amount of time as we’ve been practicing this voodoo juju in the name of good government.

Here is what I said. I was rudely interrupted by the Clerk of Commission as I was finishing up, because the City Commission isn’t really there to hear or respond to citizens at their “public meeting”- they are there to have the shortest possible meeting, so Nan Whaley can get back to her fund raising. For the record, Joey Williams and Dean Lovelace were not in attendance at the March  20, 2013 meeting where this was given:

People often say government would be improved if it was run like a business, but they never take the time to really discuss in depth what business the government should be in.

Apparently, now, the citizens of Dayton are in the medical cabinetry and furniture business- since our tax dollars are about to be invested in Midmark corporation. The payback is supposed to be increased employment and tax revenue for the city- and while that sounds just fine and dandy, it makes me wonder why we chose Midmark- over, well, anyone else?

You see, the tax dollars that are being handed over to Midmark, came out of the pockets of people who are working two jobs just to make their house payments. And their house, well, it’s worth less now because the house a few doors down went into foreclosure and is now occupied by a bunch of dope using thieves, who keep breaking the law and causing the police to visit, oh, 22 times a year on average.

Now those hard working residents, have to buy security cameras, replace the chainsaws that have been stolen out of their garage (twice) and they have to buy new bikes for their kids, a new lawnmower, you get the picture…

Why do hard working Daytonians pay taxes? To hire police officers to stop thieves? To pick up leaves or sweep streets? Apparently not. We pay taxes to invest in Midmark Corporation!

Not only are we spending money on this Midmark giveaway, we pay our hard earned money to hire a staff of “economic development specialists” who seem to believe that they are worth considerably more than a police officer on the street protecting citizens. What if we took those salaries and instead, made sure that Dayton was a safe place to live, where our investments in things like bicycles, lawnmowers, chainsaws were protected?

Maybe it would be easier to live in Dayton and take care of our property, and someone would want to live near us that didn’t engage in crime on a daily basis? Crimes against us.

You see, the criminals stealing my property, aren’t much different than what you are about to do- you are taking my hard earned tax dollar and handing it over to someone else- someone who may even be a business competitor of mine. You are also robbing me of additional police resources- the stuff that I thought my tax dollars were going to be used for.

This isn’t the first time the City has thought they were in a different business than providing services to their residents- I recall a recent initiative to bring a Kroger to the corner of Wayne and Wyoming. Millions of our tax dollars went to acquire options, and property for a grocery store that never came. Just imagine, instead of spending over a million dollars to own an empty lot, you’d spent it on doing the peoples business- police protection, I still might have my bicycle and my chainsaw and my lawnmower- and I wouldn’t be down here wasting my time trying to get the city to stop engaging in “economic development” and try doing the business of the city- which means making our neighborhoods safe and our city an affordable place to do business.

You could probably even cut your income tax rate- if you stopped doing “business” that isn’t any of your business, nor is it mine.

The way you help Midmark is by not getting distracted from what the business of Dayton is.

If you personally want to help Midmark- take your salaries to  the stockmarket and buy stock in Midmark- but that’s the only acceptable thing you should do for Midmark with my tax dollars.

After I sat down, Mayor Leitzell made the lame response, one that reeks of the weakness of vision of our City- “If we didn’t do it, someone else would.” He told me later, everyone on the commission doesn’t like these deals, but fears not doing it. Of course, if everyone else is doing crack, that’s no excuse to do it too, at least, that’s what my momma taught me (well, almost, since crack didn’t exist when my momma was teaching me the difference between right and wrong).

I have an audio recording that’s 7 minutes long, which starts part way into Mr. Down’s explanation that this is County money, and then my talk.

Play

 

What is needed more? An eye in the sky- or an eye on our commission?

The city charter is very specific- the Dayton City Commission is to meet once a week to conduct the cities business. It’s also specific about missing 5 consecutive meetings and it’s time to replace a commissioner- but as we all know, the only thing that’s sacred in the charter is that you need 500 signatures from registered voters to get on the ballot- and, despite graphology not being admissible in the courts- it is often used to disqualify signatures- despite the ridiculous extra required step of notarizing the petitions swearing that John Doe did in fact sign this petition under penalty of law. But- I digress.

It would seem that our City Commission is meeting in private (still) in the guise of “work sessions” (I guess that means they aren’t really working at the commission meeting- or are those just scripted plays for the public- making them “play sessions”). And while I abhor this practice and was arrested while asking how they get away with breaking the law with these meetings, what’s more important is why the Commission is funneling so much money into a local company?

It seems we’re about to spend $120K for an eye in the sky for 120 hours to surveil our city – from a local company that we’re also considering giving a $20K gift to build out their offices in a building we built with tax dollars and are already renting away for pennies on our dollars. From today’s Dayton Daily news (“n” is  intentionally lower case, as much of it is now a direct feed from the Dayton Development Coalition, the Dayton Business Committee and Nan Whaley’s press releases):

Dayton City Commission is considering a request to hire a local company to provide airborne surveillance for police.

The commission originally was scheduled to vote on the contract today. However, city officials said Tuesday afternoon that a vote is being delayed until commissioners can discuss the proposal in a public work session next Wednesday.

According to an agenda the city released Monday, commissioners are considering a $120,000 contract with Persistent Surveillance Systems for wide-area surveillance for the police department. PSS has operations in Beavercreek, Xenia and at Dayton’s Tech Town business park.

Ross McNutt, PSS president, said Tuesday surveillance services would come from a piloted aircraft flying above the city at about 10,000 feet. PSS provides the plane and the pilot, he said.

The plane will be able to monitor an area as large as Dayton’s entire downtown, McNutt said. Only with reports of crimes or instructions from police would the company’s equipment focus closely on specific areas, he said.

PSS camera systems boast a sensitivity 10 times greater than that of IMAX cameras (8.84 million pixels), McNutt, a retired Air Force lieutenant colonel, said last year.

According to the proposed agreement with the city, PSS would provide 120 hours of airborne surveillance. Services will include installation, data capture, analysis and training for up to four police officers. Up to three analyst workstations will also be installed at Tech Town, as well, according to city documents…

Commissioners also are considering a $20,000 development agreement with PSS to build out and lease space on the second floor of a building at Tech Town.

The company’s lease will be nine months, with a four-year renewal option. The company is expected to invest $12,000 to build out the space, according to city documents.

via Dayton ponders airborne cameras.

The first question to be asked is was this contract competitively bid? The second question is why a manned aircraft when this is what drones do much more effectively and efficiently? A local businessman, Mark Herres, is busy selling solar powered drones with high rez cameras to Northrup Grumman (he was the same business man who was ignored on the Emery/UPS hub deal that went no-bid to IRG) that could do the same thing for more hours, for a lot less money.

The city, under police chief James Newby had a fancy for an eye in the sky around 20 years ago. We bought a hobbyists helicopter and trained at least four officers to fly it. After several years it was grounded, then sold off. Apparently, despite our fantasies of matching Columbus for air power in the fight against crime, putting the helicopter up fast enough to actually be useful during a crime wasn’t happening and the program was shot down. How does 120 hours a year really help? And, with the added need to have trained officers monitoring the video feed- maybe the real answer is to think about increasing the size of the police force instead? That’s what Mike Bloomberg did in NYC and saw drops in crime and in incarceration.

It is true that we have a large community of highly trained intelligence analysts in our community, who are in high demand to read and analyze satellite and drone imagery for the military, but, even with real time intelligence, the ability to thwart crime really comes at the hands of the cops on the street. No amount of video makes up for the ability to respond to a crime with appropriate resources. These “investments” in PSS look more like political favoritism in action. It’s a shame that there doesn’t exist an easy to search database of campaign donors to City Commission candidates. If I was a paid investigative journalist, I’d be scanning the donations to a certain City Commissioner who wants to be Mayor and see what the intelligence turns up.

A better investment than planes with cameras might be to invest in our fiber network and build in high resolution video cameras to be placed in key areas so that we have 24/7/365 visual assets in place. $140K will buy a decent number of high resolution cameras and DVRs that can be monitored from multiple locations- even crowd sourcing, to help cut down on crime.

A forward thinking commission would be willing to investigate other options- and discuss this in the legal weekly meeting of the commission, inviting local experts to share their knowledge. That’s one of the reasons I’m running for Dayton City Commission. Please consider a donation to my campaign.

It’s time to not play favorites with tax dollars anymore

Our country was founded on the principle that “all men are created equal.” Yet our local elected leaders seem to think it’s good government to redistribute our tax dollars from the poor to the wealthy while rearranging the deck chairs on the Titanic.

To summarize, Heidelberg Distributing is moving its HQ and at least 270 good jobs from Dayton to Moraine. The County ED/GE fund is contributing a pittance to this project, $235,000 of your tax dollars to help this happen. That money could have been used to put 3 more police on the street for a year to protect all of us, or as part of turning Dayton (the region) into a gigabit internet community- a project that would make everyone more competitive- not just Heidelberg.

What makes this deal suck even worse is that Heidelberg is already in a business that’s created and protected by  state laws requiring all alcoholic beverages to be sold by middlemen. This isn’t freewheeling capitalism at work, you or I couldn’t become an alcohol distributor if we tried. How would you feel if you were Bonbright distributing company- which is still in Dayton, knowing that part of your taxes are being given away to your arch enemy?

Heidelberg Distributing Co. is breathing new life into the long-shuttered former Cooper Tire & Rubber Co. warehouse at 3601 Dryden Road, investing $21.2 million in renovations and planning to move its north Dayton operations to the mammoth former industrial building in about six months….

Heidelberg officials said the company will borrow a projected $16.8 million, provide $4.2 million in private equity and use a $235,000 ED/GE grant approved by Moraine and Montgomery County officials to pay for the renovations and improvements.

“It is humbling to be working on a $20 million project that will outlive us and which will be here for generations,” said Heidelberg CEO Vail Miller Jr.

via Long-vacant warehouse receives $21M revamp.

I haven’t had the pleasure of knowing Vail Miller Jr., and I appreciate his company’s long commitment to Dayton (the region and the city). The jobs that he provides are crucial to my imbibing friends (I’m a teetotaler). The excuses that were used in luring GE, or for arranging a sweetheart deal to keep NCR here aren’t applicable to retaining Heidelberg here- his is a distribution business, centered in our area to serve our area. There is no way this business could locate in Sidney and still be profitable due to fuel costs alone.

It’s time to stop redistributing tax dollars and only invest our tax dollars in infrastructure and services that are accessible to all and don’t play favorites. It’s time to invest our tax dollars in things that make our area more competitive and attractive to people outside our area, to lure them here, not to pay ransoms to keep them dancing with the ugly girl at the prom.

Dayton (city and region) should have some pride. Mr. Miller should graciously decline the ED/GE money and direct that it be used for something that would help all businesses- like Gigabit Internet which would give the region a competitive advantage, not just save him rounding error on his amazing new facility.