Update: The PD reports Sabra Pierce Scott pleaded guilty today, admitting she accepted a $2,000 bribe and asked a developer whose description matches Michael Forlani for a job for her son. In exchange she took his VA project under her wing and did everything in her power on council to help get the project completed. She is cooperating with prosecutors.
Cleveland City Hall had been largely unscathed by the Cuyahoga County corruption mess until now.
That changed today when former councilwoman Sabra Pierce Scott was charged with conspiracy to commit bribery by the Feds for allegedly soliciting a $2,000 sum from a businessman to use on her daughter's tuition and soliciting a job for her son at Michael Forlani's companies. (Read the charges here.) All incidents happened from 2005-2007.
Pierce Scott abruptly resigned in 2009, the same year she managed Mayor Frank Jackson's re-election campaign.
The charges surround Pierce Scott's relationship with Forlani, president of Doan Pyramid and an executive of Veteran's Development LLC, the company that in 2006 built the $120 million office tower complex at Louis Stokes Veterans Affairs Medical Center at University Circle that is leased to the Veterans Administration. That project matches the description in the Information as the description of Forlani, who is not named.
The Information filed against Pierce Scott alleges she accepted bribes and worked to push the project at council. A key part of the project coming to fruition was the city of Cleveland approving tax increment financing for the project, something Pierce Scott cheerleaded for in countless meetings. The tax increment financing part is explained after the jump in a 2007 article from Crain's.
Mr. Forlani said he has ventured into the development arena before with smaller projects. But he said his company is a longtime VA contractor and he’s confident about taking on this project.
“Our company is a $180 million company,” he said. “This is work we know how to do.”
When Mr. Forlani laid out his plan before City Council last week, he said he hoped the city would agree to approve the tax increment financing. If it does, taxes on 100% of the increase in the assessed value of the property would be diverted to help cover construction costs.
That’s a hefty tax break, more than the city would grant in a tax abatement, but Mr. Forlani argued that the financing structure of the deal and the nature of the project justify it.
“The market rents wouldn’t support the project without some incentives to reduce the capital cost,” Mr. Forlani said after the City Council hearing. “And if the VA had the money to do the project itself, it would pay no taxes.”
Under a tax increment financing arrangement, the county auditor would bill the project for its full tax payments. However, the bulk of the tax money collected would be diverted to pay off the port authority bonds rather than be sent to the city or to the Cleveland Municipal School District.