Cleveland City Hall is stepping up to challenge MMPI, the Medical Mart's developers. Yesterday's council hearings laid bare the power shift since the Nov. 3 election: The county's friendly, private negotiations with MMPI aren't driving Med Mart decisions anymore. Tougher, testier stances from Mayor Frank Jackson and city council are.
MMPI says it can't afford to renovate Public Auditorium or buy land west of the Mall, as it planned to this spring. It wants to build the Mart on city-owned Mall C instead.
Meanwhile, the county commissioners, who have led the quest for the Med Mart since 2006, have been rejected by the voters and are heading out the door in December 2010. And the county's decision to wait until the day after the election to give the city the bad news on Public Auditorium backfired, with Jackson feeling left in the dark.
Tim Hagan's renewed warning that MMPI can just walk away if the city drives too hard a bargain has been ignored and ridiculed. The Plain Dealer buried his warning deep inside the Metro section, where lame ducks quack, and cartoonist Jeff Darcy cast him as Grumpy of the Seven Dwarfs. Councilman Joe Cimperman, a possible candidate for county executive, stepped up to say what the commissioners' critics have been saying for years: Med Mart decision-making needs to be more transparent to the taxpayers.
The thing is, though, Hagan has a point. MMPI came to Cleveland to make money, but goodwill between Hagan and Chris Kennedy also played a huge part in getting the company here and keeping them at the negotiating table. City Hall, known for being more demanding of private business than the county, could conceivably push MMPI so hard that they kill the deal.
City officials are insisting that MMPI renegotiate the site sale with them. They insist the city still get paid at least $20 million for the site, even though Public Auditorium won't be sold anymore. And they want MMPI and the county to help fix Public Auditorium, even though they won't use it. That last demand sounds like an example of shooting the messenger: the city seems to think MMPI wounded the auditorium's reputation by saying it needs $92 million in renovations instead of $32 million. But maybe the hall does need that much: MMPI's presentation yesterday on its flaws sounds thorough.
On the other hand, the city does need to defend its interests. Public Auditorium will be less valuable if it's cut off from the convention center. Also, the city is being asked to give up valuable parkland on the lakefront bluff, part of downtown's famous Burnham Plan. (Roldo, who's against the project, asks worthwhile questions today about how the deal will change.)
So the city's demands could prove unreasonable, or a good negotiating stance. We'll see.
Meanwhile, the county is paying MMPI $333,333 a month even though work on the site hasn't started -- payments the county administrator may suspend.
Also, I haven't heard anyone address my biggest concern about the decision to drop Public Auditorium from the Med Mart plan. MMPI said this spring that getting trade shows into Public Hall by next year was key to being the "first mover." It gave Cleveland a competitive advantage over the New York and Nashville medical mart plans, which have to be built from scratch. How much does waiting until 2013 hurt us?
To read my June article about the Medical Mart in Inside Business, click here.
WCPN hosted an hour-long discussion of the Mart yesterday morning with Cimperman and Steve Litt of the PD -- click here to listen. Litt evaluates the new proposal from his architecture-critic's perspective and says a Med Mart on Mall C could be brilliant, or awful. Jay Miller of Crain's Cleveland Business is on the Med Mart story, as always: see his report from the council meeting here. Scene, which just wants the Med Mart to go away, blogs with a clever Darth Vader reference. Brandon Glenn at MedCity News takes a different angle: an update on MMPI's search for Med Mart showroom tenants.
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My concern is this: If the problems with Public Hall are as bad as MMPI alleges, then it's hard to believe they were undetected (or at least highly suspected)prior to negotiating the deal. The only other possible explanation is that MMPI is simply incompetent (unlikely given its success in the market).
If MMPI pulled the bait and switch on Cuyahoga County residents (as seems most likely), then its public officials have not just the right, but the duty to be suspicious of the company.
Those officials also have the duty to demand different (and larger) payment terms of MMPI if MMPI is going to demand use of a different (and more valuable) piece of real estate. Money is fungible, so it's immaterial if the City Council earmarks the extra money to fix Public Hall, or simply designates it for the City's general fund.
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